In the first half of 2023, significant updates were made to Medicare Advantage plans. Changes included payment rate adjustments, stricter audits, and streamlining of prior authorizations. The research highlighted differences in expenses and satisfaction between Medicare Advantage and traditional Medicare enrollees. Lawmakers sought more transparency regarding claims denials, while employers increasingly offered Medicare Advantage benefits to retirees. Studies examined hospitalization rates, denial rates, and concerns about affordability. CMS implemented tougher audits, potentially recovering overpayments from previous years.
Here are 10 important updates regarding Medicare Advantage plans in the first half of 2023:
1. Medicare Advantage plan enrollees have lower expenses compared to those in traditional Medicare, but payments are still based on traditional Medicare rates. Researchers from the University of Southern California found that overpayments may be higher than previously estimated due to this discrepancy.
2. Lawmakers have expressed a desire for more transparency regarding claims denials by major Medicare Advantage insurers. The Senate Permanent Subcommittee on Investigations has requested internal documents from CVS Health, Humana, and UnitedHealth Group, seeking information on how these companies decide to approve or deny claims, including their use of artificial intelligence.
3. The Centers for Medicare and Medicaid Services (CMS) introduced a final rule in April to streamline Medicare Advantage and Part D prior authorizations and crack down on misleading marketing practices. The rule imposes new restrictions on prior authorizations and prohibits Medicare Advantage ads that lack a specific plan name or use confusing language and imagery.
4. A study published in Health Affairs revealed that both Medicare Advantage and traditional Medicare enrollees use less post-acute care in areas with higher Medicare Advantage penetration.
5. Despite opposition from payers and some provider groups, CMS is proceeding with changes to Medicare Advantage risk adjustment. The agency plans to phase in the new model over three years, with an average pay increase of 3.32 percent between 2023 and 2024, compared to 1.03 percent in the advance notice.
6. A survey conducted by eHealth showed that both Medicare Advantage and Medicare supplement enrollees reported high levels of satisfaction with their coverage. However, Medicare supplement enrollees expressed concerns about reduced Medicare benefits, while Medicare Advantage enrollees worried more about the affordability of their care.
7. More employers are offering Medicare Advantage benefits to retired employees, but some retirees have concerns about prior authorization requirements and costs. The percentage of employers providing retirees with health benefits through Medicare Advantage plans has increased to 50 percent from 26 percent in 2017, according to KFF. Among employers with over 200 employees, only 13 percent offer retiree health benefits, but Medicare Advantage is gaining popularity among this group.
8. A study published in JAMA Health Forum found that Medicare Advantage beneficiaries are less likely to be hospitalized for ambulatory care-sensitive conditions compared to traditional Medicare beneficiaries. However, the study also revealed that care for these conditions is being shifted to other healthcare settings.
9. According to a February report from Crowe Revenue Cycle Analytics, initial clinical denial rates rose in 2022, with the highest denial rates coming from Medicare Advantage plans.
10. Starting in January, CMS implemented stricter audits of Medicare Advantage plans, potentially holding payers accountable for billions of dollars in overpayments. The final rule, although less stringent than earlier proposals, will only apply to contracts dated from payment year 2018 and onward, rather than reaching back to 2011.
