House committee requests justification for Medicare Advantage policy changes

The House Ways and Means committee is concerned that CMS’ proposed changes to encounter data, employer group waiver plans (EGWPs), and risk adjustments are not “appropriately targeted.” The committee requested additional information about these changes from the CMS acting administrator following the 2017 Medicare Advantage and Part D Advance Notice of Payment Policies and Draft Call Letter (see CMS proposes 2017 Medicare Advantage and Part D program changes, Health Law Daily, February 22, 2016). The letter expressed the committee’s appreciation for CMS’ attention to key issues, such as providing better care for those dually eligible for both Medicare and Medicaid.

Encounter data

When CMS first proposed adopting 10 percent of encounter data for risk adjustment, the Government Accountability Office (GAO) and the Medicare Payment Advisory Commission (MedPAC) found that the agency needed to make operational changes in order to use the data effectively. The committee requested a summary of how the policy will impact plans, if available, or at least an explanation of the rationale for the change. It also asked how the agency has responded to GAO and MedPAC concerns, and requested information about how CMS plans to monitor the quality and utility of encounter data.

EGWPs and risk adjustments

MA-based managed care benefits are often provided to retirees by their former employers, but the committee believed that the proposed policy changes for EGWPs should not be finalized as written. The members noted that the changes may hamper employers’ ability to provide retiree benefits, and requested a summary of any analysis CMS has done on the impact of the policy change on plants and beneficiaries. It also wondered what authority CMS is using to propose such payment changes, and asked how CMS plans to handle implementing policy changes for multi-year contracts to avoid disrupting plan stability.

While the committee was pleased with CMS’ efforts to reduce the impact of social determinants on the MA plan star rating system, it believed that plans should be offered a reasonable amount of time to make changes as new risk adjustment policies are implemented. It requested a summary of the agency’s methodology and analysis that resulted in claims that the proposed risk adjustment policy would have a small net negative impact on plans. The committee also asked why the agency did not propose policies for addressing care given to low-income beneficiaries who are not dual eligible but have multiple chronic conditions.