House committee gives its approval to Medicare Advantage telehealth bill

A bill—The Increasing Telehealth Access in Medicare (ITAM)—aimed at improving access to Medicare Advantage telehealth services received approval from the House Ways and Means Committee on September 13, 2017. The unanimous approval came alongside the committee’s unanimous passage of a bill (H.R. 3726) to simply physician self-referral prohibitions and a bill (H.R. 3729) to continue Medicare add-on payments for ambulance services.

ITAM

The bipartisan bill, Increasing Telehealth Access in Medicare (ITAM) (H.R. 3727), introduced by Representatives Diane Black (R-Tenn) and Mike Thompson (D-Calif), seeks to encourage the use of telehealth by making it a basic benefit—rather than a supplemental service—for Medicare Advantage beneficiaries. Although critics of telehealth warn that the service presents a risk of overutilization in a fee-for-service reimbursement model, proponents of the new ITAM bill note that by pairing telehealth with Medicare advantage, that concern is “flipped on its head.”

Telehealth

A related bill, in the Senate, known as the Furthering Access to Stroke Telemedicine Act (S. 431), would permit any site exclusively administering acute care stroke treatment to be included in the list of eligible Medicare sites for telemedicine services, without regard for the site’s geographic location. In May of 2017, the Senate Finance Committee unanimously passed the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act (S. 870), a bill designed to expand telehealth access for Medicare beneficiaries with chronic conditions while increasing the incentives for accountable care organizations (ACOs) to provide those services.

2018 MA and PDP premium, bid amount, related information released

Important 2018 Medicare Part D prescription drug plan (PDP) and Part C Medicare Advantage (MA) information for MA organizations and PDP sponsors has been announced by CMS. The information includes the average basic premium for a PDP, the Part D national average monthly bid amount, the Part D base beneficiary premium, the income-related monthly adjustment amount (IRMAA) for enrollees in PDPs who have incomes above certain threshold amounts, the Part D regional low-income premium subsidy amounts, the MA regional preferred provider organization (PPO) benchmarks, and the MA employer group waiver plan (EGWP) regional payment rates.

Average basic PDP premium

The average premium for 2018 is based on bids submitted by drug plans for basic drug coverage for the 2018 benefit year and calculated by the independent CMS Office of the Actuary. The average basic premium for a PDP in 2018 is projected to decline to an estimated $33.50 per month. This represents a decrease of approximately $1.20 below the actual average premium of $34.70 in 2017. The decline comes despite the fact that spending for the Part D program continues to increase faster than spending for other parts of Medicare, largely driven by spending on high-cost specialty drugs.

Part D national average monthly bid amount

CMS computes the national average monthly bid amount from the applicable Part D plan bid submissions in order to calculate the base beneficiary premium. The national average monthly bid amount is a weighted average of the standardized bid amounts for each stand-alone PDP and MA prescription drug plan (MA-PD). The calculation does not include bids submitted by Medicare medical saving account plans, MA private fee-for-service plans, specialized MA plans for special needs individuals, Program of All-Inclusive Care of the Elderly (PACE) programs, any “fallback” PDPs, and plans established through reasonable cost reimbursement contracts. The reference month for the 2018 calculation was June 2017. The national average monthly bid amount for 2018 is $57.93.

Part D base beneficiary premium

The base beneficiary premium is equal to the product of the beneficiary premium percentage and the national average monthly bid amount. Part D beneficiary premiums are calculated as the base beneficiary premium adjusted by the following factors: (1) the difference between the plan’s standardized bid amount and the national average monthly bid amount; (2) an increase for any supplemental premium; (3) an increase for any late enrollment penalty; (4) a decrease for MA-PDs that apply MA A/B rebates to buy down the Part D premium; and (5) elimination or decrease with the application of the low-income premium subsidy. The Part D base beneficiary premium for 2018 is $35.02. In practice, actual premiums vary significantly from one Part D plan to another and seldom equal the base beneficiary premium.

Income-related monthly adjustment amount (IRMAA)

If a beneficiary’s “modified adjusted gross income” is greater than the specified threshold amounts ($85,000 in 2018 for a beneficiary filing an individual income tax return or married and filing a separate return, and $170,000 for a beneficiary filing a joint tax return), then the beneficiary is responsible for a larger portion of the total cost of Part D benefit coverage. Therefore, in addition to the normal Part D premium paid to a plan, such beneficiaries must pay an IRMAA to the standard base beneficiary premium of $35.02 for 2018. Beneficiaries do not pay the IRMAA to the Part D plan; instead, IRMAAs are collected by the federal government.

Part D regional low-income premium subsidy amounts

Full low-income subsidy (LIS) individuals are entitled to a premium subsidy equal to 100 percent of the premium subsidy amount. A Part D plan’s premium subsidy amount is the lesser of the plan’s premium for basic coverage or the regional low-income premium subsidy amount (LIPSA). The 2018 regional LIPSAs are available through the CMS website.

MA regional PPO benchmarks

The standardized PPO benchmark for each MA region is a blend of: (1) a statutory component consisting of the weighted average of the county capitation rates across the region for each appropriate level of star rating; and (2) a competitive, or plan-bid, component consisting of the weighted average of all of the standardized A/B bids for regional MA PPO plans in the region. For 2018, the national weights applied to the statutory and plan-bid components are 66.5 percent and 33.5 percent, respectively.

Beginning in 2017, these benchmarks reflect the average bid component of the regional benchmark excluding EGWPs. The statutory and plan-bid components of the MA regional standardized benchmarks for 19 of the 26 MA regions are available from CMS. In the remaining seven MA regions, there are no regional MA plans.

MA regional EGWP payment rates

For detailed descriptions of the payment policy finalized for 2018 MA regional EGWP payment rates see the 2018 Advance Notice and Rate Announcement. The payment rates for Regional EGWPs are in the file Regional Rates and Benchmarks 2018 which can be accessed on the CMS website.

U.S. intervenes in UnitedHealth billing scheme suit

The federal government intervened in a qui tam lawsuit alleging that UnitedHealth Group entities (UnitedHealth) and Medicare Advantage organizations (MAOs) with which it contracted, including HealthCare Partners, deliberately concealed from the Medicare Part C program that they had submitted bills not supported by medical documentation, resulting in inflated risk adjustment payments that were never repaid to CMS. The U.S.’s intervention in this False Claims Act (FCA) (31 U.S.C. § 3729, et seq.), U.S. ex rel. Swoben v. Secure Horizons, is emblematic of its “commitment to ensure the integrity of the Medicare Part C program.” It is expected to file a complaint in another risk-adjustment-related FCA case, U.S. ex rel. Poehling v. UnitedHealth Group. Inc., no later than May 16, 2017.

MAOs must submit diagnosis codes for each enrollee for a particular calendar year to CMS (42 U.S.C. § 1395w-23(a)(3)). CMS uses the codes to create Hierarchical Condition Category (HCC) risk scores to adjust the capitated payment rates it pays to each MAO, increasing payment rates to MAOs with patient populations with more severe illnesses and decreasing payments to MAOs with patient populations with less severe illnesses. MAOs typically submit data to CMS and then perform a retrospective review of medical charts to ensure that the charts support the claims submitted. If an MAO discovers a diagnosis code for a patient that was not already submitted, it may do so at that time. However, MAOs are also required to withdraw previously submitted codes that they determine were not supported by medical documentation.

A former employee of Senior Care Action Network (SCAN) Health Plan and a consultant to the risk adjustment industry filed the qui tam suit and the government filed an intervening complaint, alleging that UnitedHealth, HealthCare Partners, and other defendants knowingly concealed the fact that previously submitted codes were not supported by medical documentation, resulting in higher risk adjustment payments. Specifically, the defendants hired coders to perform retrospective reviews, but knowingly concealed information about previously submitted codes so that the coders would not be able to identify codes that were not supported by medical documentation. In addition, certain employees created spreadsheets that did not permit the entry of previously submitted codes that should be withdrawn, as required by CMS.

MedPAC votes to recommend recalculation of MA benchmarks

The Medicare Payment Advisory Commission (MedPAC) unanimously voted to recommend that the HHS Secretary modify the calculation of Medicare Advantage (MA) benchmarks. The recommended change, discussed at the January 12, 2017, MedPAC meeting, would increase spending between $750 million and $2 billion over one year and between $5 billion to $10 billion over five years. Mark Miller, executive director of MedPAC, suggested, however, that previous coding recommendations from the June 2016 report could offset the increased cost.

CMS sets the MA county benchmark based on the average risk-adjusted per capita Part A and Part B fee-for-service (FFS) spending in the county. While this calculation includes all beneficiaries in Part A or Part B, MA enrollees must be in both Part A and Part B. MedPAC policy analyst Scott Harrison noted that 12 percent of FFS beneficiaries are enrolled in Part A only, and Part A-only beneficiaries spend less than half than what those with Part A and Part B spend on Part A. This, he said results in an underestimate of FFS spending compared to MA spending, which leads, in turn, to an understatement of MA benchmarks.

To make calculations more reflective of MA enrollment, the members voted on a draft recommendation, which they also discussed at the December 2016 meeting, that the HHS Secretary should calculate MA benchmarks using FFS spending data only for beneficiaries enrolled in both Part A and Part B.

CMS already adjusts the rate calculation in Puerto Rico so that it is based on beneficiaries who are enrolled in both Part A and Part B. In the April 2016 Announcement of Calendar Year 2017 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter, CMS stated in response to a comment that it would consider expanding this Part A and Part B adjustment to all counties in the future.

At the same meeting, MedPAC also voted to recommend that the Secretary should require hospitals to add a modifier on claims for all surgical services provided at off-campus, stand-alone emergency department facilities. The modifier would allow Congress and CMS to track the growth of off-campus emergency departments, which are reimbursed at higher rates than urgent care centers.