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tv   Federal Officials Testify on Medicare Advantage Program  CSPAN  July 1, 2022 2:14am-4:28am EDT

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>> next the subcommittee on
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oversight. the government accountability office and the medicare advisory team that's why. this is two hours 20 minutes. -- two hours and 20 minutes. >> today the committee has a new hearing protecting american seniors from medic -- with medicare advantage plan. receiving the medicare advantage plan.
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due to covid 19 medical emergency, witnesses can participate in today's hearing or online video. member staff and members of the press are not required to wear a mask. if you are participating remotely, your microphone is on mute. once you unmute your microphone, anything said will be subject in the committee room and also subject to be picked up by the livestream and c-span. because members are participating from different locations at today's hearing, today's members, will be in order. a little bit today because some
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of our members are going to go a little bit out of order because of their schedule in their district. the record can be sent to the emails we pride -- we applied to staff. ensuring that our seniors, one -- one of the most will population -- that was the intent of medicare advantage. we are conducting this regular to determine if it is fulfilling this task. nearly 64 million americans are
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enrolled in medicare. enrollment in these -- today nearly 27 million americans are enrolled in this plan. 350 billion dollars annually and it is expected to grow. growth of the medicare advantage plan, it is important to the u.s. people and also the u.s. congress to see how these plans work with policies being delivered to beneficiaries. and added to american tax papers. reports whether the watchdog agency represent today -- indicate folks are not always receiving that care.
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the hhs office of the director general indicated they are facing serious -- 18 present or denied care that they need. another 13% -- private authorization for certain health services. organizations have raised concern that they are now being required -- to include coverage.
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another patient with endometrial cancer was denied. those denials were ultimately reversed or repealed, seniors with serious health issue should not be forced to spend precious time and energy --. plans private authorizations were resort -- were reversed. 75% were -- individuals
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disenrolled from their advantage plans and switched to original medicare at twice the normal rate. this suggests when care is most critical, many advanced -- might not be delivered. why the finish -- why the beneficiaries are just enrolling, hopefully we will have answers to that soon as well. it is not just access that is a concern under these plans but also the quality of the care itself.
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for example, studies indicated they are are concerning disparities in the quality of care. individuals on medicare advantage plan will experience. the quality of that care has been historically inadequate or difficult to substantiate. we needed good information for good oversight and what steps are necessary to ensure the plans are providing high-quality health care to seniors.
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want to amplify, medicare advantage is an important tool for health procedures and we wanted to succeed. we are going to extend it to conduct the oversight necessary to make sure they provide the services they need in constant for way so that seniors are protected and caps on protected -- that seniors are protected. >> we welcome the opportunity to review the medicare advantage program so this program can -- this program can continue to cover medicare beneficiaries. my mother reported to me she loves her medicare advantage program. and i am glad she is not in her
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last year of life because she has continued to enroll. medicare advantage is a private plan supplement to medicare service program. medicare plays medicare advantage program. this is based on their comprehensive health care at any age. 39% of them are enrolled in an advantage plan. medicare part b premium and they may pay a -- they may pay an additional amount. some medicare advantage plans have premium dollars. care and coordination, these
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plans offer supplemental and fitness benefits. in 2022 average medicare enrollment is nearly $2000 extra annually then medicare service cannot access without providing additional medicare services. care can improve health care for seniors while individually targeted programs such as transportation to primary care and nursing visits. in 2000 advantage. there are now 28 million people enrolled. that means about 45% of all medicare beneficiaries are enrolled in medicare advantage
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plans. if this trend continues, 51 percent of eligible medicare beneficiaries can be traced to this critical feature to distinguish the program. medicare patients are able to enjoy a wide range of supplemental benefits in exchange for utilization and network control. the medicare advantage program was built with foundational tools to night only provide care at lower cost. the medicare plan uses the bidding system to reduce plans at lower costs.
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we can ensure the most cost effective is provided. this can help reduce inappropriate service use. creates a built in incentives to coordinate to help beneficiaries control costs. the volume system in which an unlimited amount of services can provide a good deal of service for taxpayers. including the witnesses here today. medicaid services oversee the medicare advantage programs. they include recommendations for cms to describe methodologies or
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operations. specifically clear guidelines to medicare advantage insurers. to speak to the work the agency is doing to improve this program. as medicare advantage takes on an even larger presence, the medicare advantage hospital transponder will continue to be important to how well the current methodology payment advantage is working to enhance efficiency and keep costs in medicare spending down. with our witnesses here today so that constituents can continue affordable health coverage choices and benefits. thank you. i yield back. >> we are here today the
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medicare program. the program offers seniors flexibility in the way they received this medical care, it is important to remain financially viable. i am deeply concerned with seniors facing large disparities for accessing medical care. beneficiaries at this treatment and delayed care and proper claim denial from prior authorizations for beneficiaries receiving the care they need. while those plants appear to be acting responsibly, some are not.
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more importantly jeopardizing the health care of seniors. it is also important to determine whether medicare advantage -- has consistently found it has cost more than other care. plans, particularly the larger one are not necessarily providing your health care services to beneficiaries. we built plans to receive more money from the federal government including the
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underlying medical needs to ensure health risk assessments to claim individuals on those plans have additional health conditions diagnosed. the plan to client beneficiaries are at risk of it -- at risk of help. seniors that receive these new diagnoses from insurance, needs did not always receive health care services for those dying houses. this is called quoting intensity . rather to receive care. and what can be done to put a stop to it.
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portions of their funding to provide additional care there have not many accounts of insuring these funds are being paid. we must vent -- we must better understand their benefiting seniors and not the insurers.
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many of us have been trying to expand services for seniors and looking out for seniors. some of you are on the task force. it is constantly bringing to light the attention of what we need to do to protect seniors. i yield back. >> the chair recognizes the ranking member. >> medicare advantage is the successful program. according to an e health poll, 88% -- 86% would recommend it to
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family and friends. 51% enroll were more satisfied. medicare advantage is popular because of -- because these plans allow -- many of these plans are only available through insurance. we know many patients continue to switch over. the growth of zero premium and the peace of mind of a cap on financial liability contract to the outdated pressure which can be confusing and more expensive. on average, patients report
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spending nearly $2000 last on their out-of-pocket costs on premiums. for seniors on a fixed income especially pinched from inflation and surging energy costs, these savings make a huge difference in their lives. in 2022 average care had access to more than double the plans in 2000 17 and the largest in more than a decade. improvements can be made. to conduct oversight of the medicare advantage program and providing at acute -- adequate care. your medicare advantage plans for people to choose enrollment.
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i have heard about counties move -- counties losing their medicare advantage plans. so they can stay enrolled in medicare advantage. rather than limit senior choices, we can take this opportunity to think creatively, improve care, lower costs, especially in the rule parts of the country. i remain extremely concerned that would ban medicare plans. we should be exploring solutions to improve medicare advantage plans, not dismantle it. like the private sector, and solutions, our members are
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working on some monitor. better pay for ensuring patients and their doctors can ensure treatment. proper oversight should inform this policy work. genuine effort to make a successful program stronger. integrity should be used to enhance programs today and in the future. that won't meet the needs of seniors that enjoy a quality of life. reflects a pattern from the biden administration and oversight of power government and mandatory spending program. the federal agency that administered the federal program and the operations of this
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program. the opportunity for conducting oversight to strengthen medicare advantage. i look forward to today's witnesses and hearing how we can string medicaid advantage to service beneficiaries. and q, and i yield back. >> we are going to continue to work on the investigation on this and i expect that we will be interfacing with cms directly. i thank you for your comments. there was an opening statement is made part of the record, without objection, so ordered. i order to do the witnesses, the assistant inspector general, office of evaluation and inspection, office of inspector
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general department of health and human services, ms. leslie gordon. acting health care of the gao, the medicare payment advisory commission. i want to thank you all of you for appearing before the subcommittee. we are holding an investigative hearing. we have a practice of taking testimony under oath. does anyone object? feature identifies that under the rules of the house and the committee, you are entitled to be accompanied by counsel. does any of our witnesses request counsel today? the witnesses responded no. if you could please raise your right hand so that you may be sworn in, do you swear that the testimony you give is the truth, the whole truth?
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-- is the truth, the whole truth, and nothing but the truth? they have said yes. the chair will recognize each witness for five minutes to provide an opening statement and i would like to remind all of you that there is a timer on your screen that will count down your remaining time. i would like to recognize miss blitz first. you are recognized. >> good remaining -- good morning. i am pleased to join you to discuss two critical issues in medicare advantage. one is ensuring that enrollees have access to the medical care that they need. the other is protecting american taxpayers from overpayment medicare advantage plans. a more than 26 million
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beneficiaries are enrolled in medicare advantage in 2021. that is a lot of lives rely on these organizations to authorize and pay for the care that they need. that number continues to grow. in a recent evaluation, we found that medicare advantage organizations sometimes delayed or denied and role -- enrollees access to medicare coverage. these services likely would have been approved by original medicare. for many of these denials in our review, medicare advantage plans used internal criteria that they are not required -- as are not required by medicare. medicare advantage plan denied a request for a ct scan that was medically necessary to rule out a life-threatening aneurysm. the denial was because the
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beneficiary did not have an x-ray. medicare has no such requirements. medicare advantage plans, internal criteria, supposed to be no more restrictive than original medicare. the guidance on this is not detailed enough for us to tell whether it would consider certain denials to be inappropriate. oig recommends that there be new guidance on the appropriate use of criteria and the use of the criteria as in an audit of medicare advantage plans. another risk is that plans make patients up here to get extra payments. one way they may do this is through court reviews with review beneficiaries medical documentation to identify and add diagnoses included on the service record.
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medicare paid an estimated 6.7 $1 million on diagnoses arising only from chart reviews. . another way is through hard risk assessments -- health risk assessments. it is supposed to improve care coordination. some organizations contact with vendors to visit beneficiary homes to conduct these assessments. oig found that medicare paid $2.6 billion in 2017 for diagnoses arising from only from health risk assessments. these 3.5 minute -- 3.5 one million beneficiaries had no other records for tests or supplies for the diagnoses from these assessments. we are concerned when we see chart reviews as the sole source
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of diagnoses that led to extra payment. these diagnoses were inaccurate, medicare advantage may have received inappropriate overpayments. -- if these diagnoses are accurate, they did not need the care that they needed to treat these obvious conditions. we ask for targeted oversight of medicare advantage organizations that are outliers in using these tools. that they reassess whether to allow certain chart reviews and help assessments to be sole sources of extra payments. the cms requires organizations to improve the care coordination for those who receive health risk assessments. we appreciate and share your interest in ensuring that medicare enrollees get the medical care that they need and that payments to medicare
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advantage organizations are appropriate. thank you and i will be happy to answer any questions. >> miss gordon, you are recognized for five minutes. >> thank you. distinguished members of the subcommittee. i am happy to be with you today to discuss the medicare advantage program. i summarize recommendations in three areas related to the medicare advantage program. we are invalidating counter data and strengthening audits that identify -- we are invalidating counter data and strengthening audits that identify misused data. it often requires high costs and
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specialized care. high rates of disenrollment for medicare advantage joints traditional medicare may indicate issues with the quality of care such as potential limitations, accessing specialized care. in 21, we reported that medicare advantage beneficiaries in the last year of life, disenrolled at more than twice the rate of other medicare beneficiaries in both 20 and 2017. we recommended reviews of the medicare advantage disenrollment by beneficiaries in the last year of life and also found higher disenrollment rates in the last year of life under certain medicare advantage contracts for 2019 through 2021. these findings underscore the value of continued monitoring and according to cms, annually.
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second, invalidating the counter data. the data is services provided to the beneficiaries to obtain clinical diagnoses. it adjusts payments to show projected health costs. in 2014 we recommended that cms complete six actions necessary to validate counter data for completeness in accuracy before using counter data to adjust risk payments. cms is using the data to adjust payments and has not implemented all steps necessary to validate the data. they are not completed a medical record reviews to help ensure the accuracy of encounter data without such reviews, they cannot determine whether the diagnoses that are used to risk adjust payments are supported by beneficiary medical records and
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the soundness of adjustments made to billions of dollars in payments remain unsubstantiated. the third area come oversight. strengthening audits to identify improper payments. in 2016 on several factors that hampered our risk adjustment data validation through the audit program and the recovery of proper payments. we made two recommendations related to improving the audits and processing fees. we found that the contract level of the audits were subject to years long delays. we recommended cms take several actions to improve the timeliness of the audit processes. the agency has completed some of these actions, but has not yet issued final findings or
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payments are in 2011 through 2014. they have established specific time frames that allow the agency to complete the national audits on an annual basis which is used to estimate a proper payment for the year. improper payments were estimated to be about 10%. untill cms improves the timeliness of the audits, the agency may miss out on recovering hundreds of millions of dollars in proper payments. the wife we are time. and the ability to contribute to the hearing. this concludes my prepared statement. i would be pleased to respond to any comments you may have. >> i am pleased to recognize dr. matthews. >> good morning. i appreciate the opportunity to discuss our perspectives on the
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medicare program. by many measures, we have been successful. the majority of eligible medicare beneficiaries will be enrolled in ma. as left beneficiaries -- it left beneficiaries a fee for service and perfects them from -- protects them from catastrophic costs. the average beneficiary has 30 plans to choose from. rebates which fund extra benefits are at record high levels. there is a downside to this robust growth. the average plan. in 2022 -- the average plan. was 25% of fee per service spending. given medicare's financial
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problems, because a program cannot continue to overpay plans and it should benefit from the efficiency plans can achieve. i will discuss three problems with the program. two of these fixes would reduce payments to plans, this could be done without materially affecting beneficiaries access to ma plans and the benefits that they provide. i will start with coding intensity. ma summits diagnostic codes to medicare it adds to a risk score. a higher risk score adds money to the plan. counter records can improve -- and have chart reviews. these may include conditions not
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under active treatment, incurring no cost to the plan. it would boost medicare's payments. coding intensity is 9.5% higher than fee for service, resulting in total billion dollars in excess spending in 2020. we recommend changing the medicare's risk adjustment model to exclude diagnoses collecting from risk assessments and recovering all excess payments to ma plans. our discuss the ma quality bonus program which is supposed to reward plans for providing high-quality care to their enrollees. plans with a qualifying star rating receive bonus payments which the total between 11 and $4 billion in 2022. the q vp fundamentally flawed. it is inadequate for informing
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beneficiaries about the quality of their coverage choices nor can policymakers use to inform changes to an bi-or traditional medicare based on quality. we recommend that the congress replace the uvp with a new system without would remedy its flaws and would be financed through a payment withhold similar to what-based purchasing programs in fee-for-service medicare. plans are required to submit encounter data to medicare. records similar to claims under fee for service. these records are needed to conduct oversight activities. to determine if any differences in service between ma and fee-for-service reflect an appropriate utilization management techniques or the inappropriate denial of covered care. after a decade, this data is not complete enough for the purposes. they have recommended that medicare evaluate the completeness of encounter data,
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set goals for plans to submit complete data, and penalize plans failed to do so. they can deliver care, the current incentives for ma plans are not adequately aligned with the medicare program and the beneficiaries and effects players fund it. reforms are needed to prevent greatest and medicare's finances. i am happy to answer any questions from the committee. >> it is time for members to ask questions of the panel. i want to or might -- i want to remind to mute and unmute to avoid background noise. as organizations have examined
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medicare advantage over the year and written reports recommending ways the programs could be improved. i thought to kick off the question it we may want to ask each of you what you think the most important recommendations of your organization has made that would help improve the quality of care being provided to america's seniors and the cost. i want to go down the line starting with oig. let us start with you. what would you say is the top one or two recommendations that your office has made to help improve the quality and profitability of medicare advantage? >> with respect to the denials of care, our top recommendation is that cms up to and clarify guidance about how medicare advantage organizations can use
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-- update and clarify guidance about how medicare budget organizations can use this. services that met medicare coverage rules. with respect to court reviews and health risk assessments, driving risk adjustment payments, we recommend that cms reassess whether to even allow unlinked chart reviews and in home health risk assessments to be sold sources of diagnosis for these payments. >> thank you. ms. gordon, same question? >> representing the government watchdog in partnering with oversight, we recommend that actions be taken to ensure that there is accuracy of the encounter data without complete accurate, valid encounter data, our adjustment payments cannot be substantiated and we cannot
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know that we are paying appropriately. in addition, the encounter data is necessary for oversight of quality of care and that beneficiaries are receiving the care that is intended. i would emphasize the need for timeliness around the contract level around the audits which is the cms oversight tool to assess and plan for improper payments. thank you. >> dr. matthews, same question. >> first and foremost, the most important thing to do would be to address the excess payments that result from coding intensity. these practices on the parts of plans continue and contribute to excess payments at a rate of increase of over one percentage point per year. the problem is it is will continue to grow.
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we need to completely overhaul the quality bonus program. medicare beneficiaries who are trying to make fundamental decisions to remain in fee-for-service or choose a medicare advantage plan or to choose among medicare advantage plans in their local area, has information on meaningful quality measures and outcomes as of the basics for doing so. lastly, a recommendation i did not discuss here today, we would recommend that the medicare program change its way of calculating benchmarks so that medicare can benefit from some of the efficiencies that ma plans have demonstrated they can achieve in the form of their bids which total 85% of the fee-for-service medicare. >> i have one last question. you can supplement your answer later. do you think that congress needs
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to take additional steps to course correct on medicare advantage? >> yes. >> yes. >> yes. >> if you can supplement this, what congress can do that will be great, and now the terrible you'll back and i will recognize the ranking member of the full committee for five minutes.
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>> i believe that she is muted. >> i think the you are muted. kathy? ok, we cannot hear you. we cannot hear you. >> i can go ahead and go if she needs time. >> yes, thank you i'll recognize you. >> he asked each of you -- things that congress should do the course correct and each of you said yes. i have no problem. -- oh --
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>> he is asking questions now and we will go to you. >> she asked if there was a needed a course correction and i look forward to seeing those answers as well. as a part of that, are you recommending that we get rid of medicare advantage? yes or no? >> are the witnesses -- >> no. >> no. >> absolutely not. >> i assumed that and we can always do things better and we appreciate your input on that. in regard to the soul source for diagnosis being the tort review or the health risk assessment, i would agree with that. i think that is a good suggestion. i look forward to your input on
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that. that being said, i hope you would not give it of the health risk and assessment done at home. i think that may be helpful for many of our seniors to help people see what their environment is and where they are coming from. i do agree it should not be the sole source for diagnosis. what else do you think we can do in that regard to make that better and how do you follow-up with your recommendations to cms? >> thank you. i completely agree. we are recommending that cms reconsider allowing in home health risk assessment via -- be a sole-source risk adjustment payment. eddie home health -- in home health assessment can be helpful in health outcome. we have recommended that cms
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require medicare advantage organizations implement best practices for coordinating the care of beneficiaries who receive health risk assessments. by now, cms recommends but does not require best practices. based on our finding that they .5 million beneficiaries have some risk assessment with no evidence of -- based on our findings, three point 5 million beneficiaries have some risk assessment with no evidence of care. >> the question is what are you doing to see that cms moves forward? what is your organization doing to follow up with cms to make sure that they are recommending -- using the recommendations that you made or doing better than what you recommended? >> we are following up with cms. they didn't agree with our recommendations from our most --
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they didn't agree with our recommendations from our most recent report. we follow-up with him on a regular basis. with respect to home risk assessments, they did not agree with the recommendations. including the one i mentioned about requiring best practices for care coordination. we believe it is needed, we continue to follow up, we continue to press for them to reconsider and push for change. >> i appreciate that. we take a look at that and that is why i asked you to send our recommendations as what we can do and that is one of them. you expressed some frustration as well and i think you made recommendations but they had not followed through on things going back as far as 2011.
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is that accurate? >> we have a number of long-standing recommendations, encounter data, and validation goes back to our recommendation in 2014. in terms of actual reporting out on the audit of reporting proper payments at the contract level, they have not reported from 2011-2014. >> i am concerned that the most recent study shows that there were 27 million medicare advantage beneficiaries but the sample size was only 250. i hope we would have a bigger studies we can make a better policy. with that, i yelled back. -- yield back. >> thank you.
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what are the promises -- one of the promises is that we can save taxpayer dollars by using private plans to give efficiencies. that has not translated into medicare savings. i would like to better understand why the government pays a for services provided for medicare advantage plans than it would for the fee-for-service program and why are payments to medicare advantage higher than medicare programs? >> thank you. the key reason that medicare is spending more for medicare enrollees in a medicare advantage is under fee-for-service is because medicare payment are in part regulated on the basis of fee-for-service benchmarks.
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some of those benchmarks pursuant to provisions of the affordable care act are set at levels inaccessible a fee for service and there are policy rationales for doing that. particularly to induce plans to enter into markets with low fee-for-service spending or they may have difficulty -- where they may have difficulty competing. given the benchmarks that are higher than fee-for-service and the mechanism whereby a plan that is below fee for service is received for a rebate to use extra benefits, medicare is not able to fully benefit from the fact as i mentioned previously, medicare advantage plans in the market are getting far below fee for service. >> what can be done? to better align to the medicare program with the quality of
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care? if they are getting a lot better care and invite more services, maybe it is justified? is there some way that we can better align the cost? i want to make sure we are getting the plan for the book. >> there are two components to that question. i mentioned a change to the way that they medicare calculates benchmarks. we would recommend bringing down benchmarks in a way that allows the program to achieve the benefits of plant efficiencies in high for fee-for-service spending areas. ma are bidding far below fee for service. the second thing is going back to the encounter data.
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as i mentioned, we have concluded that we cannot make definitive determinations about the quality of care provided under the auspices of ma relative to a for service or how the quality varies among plans and one of the reasons we cannot do that is the encounter data is insufficiently complete for us to be able to reliably calculate things like patient mortality, avoidable hospital admissions, avoidable er use and until we have robust data that would allow us to calculate those things, independent of the plants themselves, we are hamstrung in terms of our ability to tie medicare payments to outcomes under the medicare advantage program. >> let me say, obviously this is complicated. i know you suggested we need to follow up from this year and i
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think that is clear from what dr. matthew said. we had to dig into this more. let me ask one more question. in september of last year, we found 162 programs offering ma, many had unjustified payments and i'm one a plan drove up to 40% of unjustified payments. even though it only enrolled 22%. quickly, only 30 seconds, what did these findings suggest about the composition of the market for this plans and how widespread some of the issues around plan adequacy and integrity it may be? -- integrity it may be? >> relatively small number of companies were driving a disproportionate share of risk adjustment payments coming solely from chart reviews or health risk assessments. we recommended that cms take a targeted approach to its
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oversight of those companies on these issues. >> thank you so much. it is a very important hearing. >> thank you so much. i will try to recognize ms. rogers for five minutes. >> thank you, sorry about that. i appreciate everyone joining us today. the overwhelming majority of medicare advantage beneficiaries are satisfied with medicare advantage wedges evidenced by the state of growth programs and the medicare advantage satisfaction surveys. as a program is incredibly popular, we recognize there is room for improvement within the medicare advantage program and within that faint, there are efforts by members of this committee to address the areas of improvement. ms. gordon, he conducted a survey of medicare advantage and the results were released in
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june. the survey showed that nine out of 10 medicare advantage enrollees expressed satisfaction with their medicare advantage plan. it also indicates that beneficiaries prefer medicare advantage to their supplemental or a medic cap -- or cap plans. they thought it was too costly and 25% chose medicare advantage over mediagap plans did not -- as medagap plans did not offer your coverage. >> beneficiaries disenrolled during the past year, we looked at disenrollment of all medicare advantage beneficiaries to join traditional medicare. we have not yet examined the differential and cost associated
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with supplemental care. we do recognize and support the fact that medicare advantage offers competitive options for beneficiaries and they have a an opportunity to disenrolled for any reason. not just for a bad reason, it is for a preference of purposes. thank you. >> i think it is important to distinguish one talking about medicare advantage plans the difference between managed care plans and the fee for service plans. there are many benefits to managed care plans including the additional supplemental benefits. low monthly premiums and tailored special need plants that are available to beneficiaries. we discussed the trade-offs between enrolling in a managed care plan versus the fee for service plan?
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>> thank you. there are opportunities for better care coordination and there are opportunities for additional plans offering additional services. the care coordination is essential in terms of the special needs plans, they are dedicated to people with particular special needs who have specialized care needs and can use for the coordination to address their needs. >> the better health care alliance issued a data brief in april, noting that medicare advantage are performed fee for service on cost projections for a low income and diverse populations. can you talk about why medicare advantage provides better cost protection than a fee for service and how do you use features that are unique
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factoring -- and factor into saving costs? >> i would happy -- i would be happy to respond to that in writing. >> we continue to think through how to improve medicare advantage and really understand the factors between a medicare advantage, managed care, and getting a hold picture here. do very much. i yield back. >> we recognize mr. schreier for five minutes. >> as a medicare advantage program is increasingly popular with seniors because it has offered more choices and feels more like traditional health insurance. plans can have coordinated care and give additional benefits we have already heard about.
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we do need to ensure that these things are working -- plans are working -- in a timely fashion. we need to focus on authorization to ensure that -- it has become a major frustration for both patients and providers and it can delay or prevent needed care as it is heard. the american medical association has found that by authorization and so burdensome that clinics require significant additional staffing in order to handle the report and follow-up. these resources could be used elsewhere. according to the ama, 34% of physicians reported that the issues have led to adverse care of a patient in their care.
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[indiscernible] >> we are concerned about whether [indiscernible] these beneficiaries are receiving all of the care that they need and in these cases. in general, a medicare advantage organizations are supposed to offer the same coverage and access to services that you would get under traditional medicare.
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medicare advantage plans are allowed to use internal clinical criteria that go beyond medicare coverage rules and we can tell whether the situations that we found that were cases to be considered appropriate or inappropriate use of the criteria. what we can say is that there were denials using criteria that are not included in original medicare coverage requirements. coverage looked different in those cases than it would under original medicare. >> [indiscernible] i wanted to note that i am a sponsor of -- [indiscernible]
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recommending real time, as a doctor, providers want to provide the best care for their patients. i get the oversight. [indiscernible] dr. matthew's perspective, the need for guarding against unnecessary services and expenditures while ensuring that prior authorization is not preventing --
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>> i am happy to try and answer the question. it was a little bit garbled but i will do my best. we have recognized the value of appropriate use of prior authorization as a way to control costs. we are unable to given the current state of medicare advantage data to assess whether it is being used in an appropriate way that does not compromise beneficiary outcomes versus an inappropriate way along the lines of what my colleagues have demonstrated that may negatively affect beneficiary outcomes and quality of care. >> i know you are out inspecting some modifiers and that is an important thing to do. the chair recognizes mr. burgess for five minutes.
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>> i thank you for being here, extremely important. i would associate myself with the comments of ranking member griffith. i am a medicare advantage patient and it is always good to know that you have a year left if you are covered by medicare advantage. look, they brought out the issue of timely access to care act and our use of the electronic medical records to help facilitate the prior authorization process. i guess the question is for the inspector. do you see that as being a helpful adjunct to getting
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patient the coverage that they need when they need it? >> thank you. yes, we saw in some of the cases in our evaluation that prior authorization requests were denied because the medicare advantage plan requested either unnecessary documentation of -- [inaudible]
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the idea of taking a risk-based approach of the provider level is an interesting one. it is not one to have city directly yet. we are looking into it. >> some states are doing this, i know texas is doing it at a state level. this is after the state legislation had a last legislative session. the idea that we could facilitate care and actually make it less burdensome on patients and providers if we were to be forward-looking with the results of this data.
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i would ask you to respond to that. >> certainly, streamlining the process, avoiding unnecessary requirements around prior authorization, unnecessary paperwork, burdens, getting to a more appropriate response as quickly as possible are absolutely goals that we share. >> in the future, there are ways that if you have a practice that is consistent in their accurate data, could we perhaps forgo the prior authorization step for the physician or clinic? it has always been one of accurate requests. >> i think i certainly find that to be an important option for
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policymakers to consider. as an oversight entity would take a look at how the program is operating and running effectively. that certainly seems like a promising option to consider. >> bearing that in mind, you stated in your testimony that the framework has numerous evidences of inappropriate delays. could you have an idea as to what the cost of this delayed care might be? not just the cost of the medical care itself. the cost as far as what the impact on the patient may be, with a deed -- with the delight of the care? >> we are concerned about the costs.
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we looked at the case file from september 2019 for care that had been denied in june of 2019. we could see what had happened in that three month window but we cannot see beyond that to know ultimately what the costs were financially and otherwise to the patients whose care was delayed or over died -- or denied. >> i would be an important cause of -- concept. one that we should know. >> the chair recognizes ms. rice for five minutes. >> the department of health and human services and found that in several instances it was not possible to determine whether a prior authorization denial met medicare coverage rules was appropriate because the guidance on internal clinical criteria was not sufficiently detailed.
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how widespread was this issue in the prior authorization denials you studied? >> this issue came up in the subset of prior authorization denials that we determined were for care or services that met medicare coverage requirements. it was the 13% out of the larger total. it was a very prominent issue among those 13%. it was the most common issue in the denial for services that did meet the coverage requirements. >> has a report gives the example of a medically necessary computerized scan being denied because it required a beneficiary to have an x-ray before being approved for a ct scan. the report states that this additional step could be considered appropriate because current guidance allows
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additional evidence-based clinical criteria as long as it does not contradict medicare's own rules. it recommends that cms issue more detailed guidance to provide greater clarity on the appropriate loose -- use on the criteria. cms has it that they concur with the recommendation and plan to issue guidance. how detailed should new guidance be to remove existing ambiguity from this process? >> on behalf of medpac, we have not weighed in on a level of detail with respect to regulatory guidance that governs the prior authorization process and i would have to defer to my colleagues at the office of the inspector general. >> you have an opinion? >> no.
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>> issue a new guidance, that would go back to miss blitz. in issuing new guidance, what factors should we wait to ensure that it strikes a balance that would allow appropriate and safe patient care without being unnecessarily restrictive? >> thank you. the determining of where to draw the line is something that we leave to the program essentials who are running the program as well as the policymakers in congress. what we tried to do is take a look at the criteria and see if it is being followed. in this case, we could not tell. it will be pointed out was that the outcome was in some instances, patients in medicare advantage for denied care that would have been covered if the same patient had been in original medicare.
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whether or not that is an acceptable outcome is we have to defer to policymakers and that is why we left it to cmf to set where the line is actually drawn. we think it does need to be a much clearer line. >> it is clear that there is a lot on the the federal agencies that needs to be done for clarification purposes. physician administered injections for pain management are among the most routinely denied services because they are subject to extra scrutiny. why is that? why are injections subject to heightened scrutiny? >> they have been a -- there has been a history involving injections for pain management treatment. it is possible that would be a rationale that medicare advantage plans may want to apply extra scrutiny to those services.
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>> are there steps that cms to ensure that patients do not experience delight caused by unnecessary friction in the program -- delays caused by the unnecessary friction in the program? >> with respect to prior authorization, we discussed this in detail in a different context in 2011 when we looked at prior authorization for high-tech imaging services. we did not discuss gold recording per se, we did say that any such prior authorization requirement should be focused on outlier clinicians and to the extent that the majority of clinicians were following program rules, any such additional requirement such as prior authorization should be focused on the outliers. >> i yield back. >> i speak -- i yield to mr.
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palmer for five minutes. >> i want to follow up on the payments. it is something i have worked on quite a bit in previous congress . director gordon, there was an article on medicare that said the improper payments according to the gao resonated with 48 billion dollars and accounted for over a quarter of all improper payments made governmentwide in 2019. what percentage of the medicare and proper payments come from medicare fee for service? >> the improper payment range and the fee for service is just around six or 7% in 2021. as a proper payment rate is
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estimated to be about 10%. >> however medicare advantage? -- how about a medicare advantage? >> about $23 billion or 10%. >> 10%. >> when i was working on this on the oversight committee, the standing committee that does oversight and government. one of the things we found was a failure to document eligibility, there was one of the areas i thought was particularly important was the antiquated data systems in the federal government. hasn't the gao looked into that? is that a problem that is persistent with the federal government and with the states? >> the ability to collect and have complete data is something
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we have been speaking about here today. it is a long-standing and it needs further attention in order to ensure that we have eight for both risk adjusting and for evaluating the quality of care. we are looking at the data systems across the federal government and it is an area of concern for mating agencies. -- many agencies. >> in order to reduce or eliminate improper payments, this is something that is bipartisan because as a democrat congress in 2011 and 2012 past two bills doing -- dealing with the elimination of improper payments. we have never followed up on that. the gao put out 89 recommendations to address some of these issues.
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we cannot go into all 89 recommendations. for specific to what we are dealing with with medicare, are there what or two things you could recommend that this committee follow up on? >> when he to follow up on the timeliness of the audits, to identify and recover improper payments, there must be an ability to conduct annual audits and proper payments and recover proper payments for fee for services that they have gotten quite efficient do that. there is a new benchmark for medicare advantage estimations of improper payments and that is why the rate has gone up about 10%. more tension in the program, specifically, as we also have seen increased enrollment in the medicare advantage plan. evidenced the areas to focus on. i also have recommendations related to proper payments and
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part d. >> the first bill i introduced was the postponing implementation of icu10 which took the number of diagnostic codes from 28,000 to 16,000. has that increased the diagnosed -- decreased diagnostics helped? >> we have an open recommendation that we evaluate the documentation requirements in medicare and medicaid to see that they are all appropriate and necessary for ensuring the quality of care and services provided or needed. >> thank you for holding this hearing and i yield back. >> the chair recognizes miss sheik al ski for five minutes. -- the chair recognizes the next speaker for five minutes.
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>> request for unanimous consent is handled at the conclusion of the hearing. >> the headline of the article is beat cancer, your medicare advantage plan may be billing for it. it moves on to say, quote, firms are mining patient record for irrelevant conditions to increase profits. the justice department and i wanted to refer now to dr. matthews. as you mentioned before, one of the tactics of the tactics that medicare advantage plans can use to increase their profits is
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called coding intensity. you also mentioned that in march of this year, medpac released a report that sounded -- said that coded intensity accounted for $12 billion and had additional payments to medicare advantage plans and actually understand is that these are payments that would not have been -- and not have occurred had these enrollees been in traditional medicare. here is my question for you. how widespread is this problem of coding intensity? >> thank you. you are correct. we did quantify the excess payments that result from coding
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intensity relative to fee for service at about $12 billion. i would like to clarify that this is a net of the current 5.9% payment adjustment that the medicare program makes. as a 12 billion is just for the residual remains. i would like to say that to the extent that diagnoses are in collected -- are being collected in tort reviews, i want to be clear that they are not asserting that these diagnoses are improper or erroneous or otherwise falsified. this could be things that very well have been in a beneficiary's past. as the article indicates, the individual has recovered from a condition and the conditions are no longer contributing to the cause of the care that the
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beneficiary is is receiving. and therefore should not be used for purposes of risk adjustment in a way that boosts payments to plans for conditions that are no longer incurring costs. and so we've made a recommendation to cms that diagnoses collected from health risk assessments should not be used for risk adjustment. as one of my other colleagues or witnesses on this panel have indicated to the extent health risk assessments serve a useful purpose to medicare advantage plans for purposes of managing the conditions of their enrollees, that is a fine thing. all well and good. but those diagnoses should not be used for purposes of risk adjustment. >> i thank you for that. i also wanted to ask you and/or
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dr. list to say, so, what can we actually do do about this and does cms need more scrutiny in this in this area. dr, bliss, why don't you start. >> thank you. so cms does have the authority to make the changes that we've recommended and improvements. i think drawing attention to the importance of the issues and doing oversight like this is important to helping build momentum for those changes. >> i have a couple more seconds. dr. matthews, do you want to add to that? >> i would concur with miss bliss. we believe that cms currently has the statutory authority to make the changes that med pack has recommended with respect to coding intensity, used two years worth of data for risk adjustment, eliminate diagnoses obtained exclusively from health risk assessments, and to the extent it is necessary, cms should take more than the
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necessary statutory minimum in recovering overpayments from plans. >> thank you so much. and i yield back. >> i thank the gentle lady. the chair does not see any republicans on screen who have not asked questions. and the only democrat that i see is representative o'halloran. representative o'halloran, are you prepared to? oh wait, here, here's mr. ruiz who is a member of the subcommittee. are you prepared to ask questions? you need to unmute. ok. you're recognized for five minutes. >> thank you. one second. let me pull up my notes here. medicare advantage is very popular in my district. more than half of the seniors i represent have medicare advantage plans as opposed to traditional fee for service. that's almost 85,000 seniors and
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medicare advantage disproportionately serves low income and minority seniors. in fact, over half of all medicare advantage beneficiaries live on annual incomes of less than $24,500 and approximately 33% enrollees identified as a racial or ethnic minority compared to 16% in traditional medicare. while black asian and hispanic americans sign up for ma programs at higher race and white enrollees enrollees from these backgrounds also tend to be in plans with lower quality ratings. as a member who represents tens of thousands of seniors enrolled in plans and as a doctor who has spent his entire career fighting for health equity, it is of paramount importance to me that the program is serving our seniors in the way that it is intended. i am disturbed by some of the findings in the hhs office of inspector general report released in april that found
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gaps in data for determining whether ma programs are properly serving americans from communities of color. seniors should not have greater or less access to treatments and services depending on whether they are enrolled in traditional medicare or medicare advantage. and we must get to the bottom of whether disparities exist across ma programs. so, miss gordon, your office has written extensively about the need for high quality verified data, detailed enrollees interactions with their providers. how has the absence of quality data about enrollees encounters with their providers affected cms' ability to document disparities in the ma program? >> without complete and accurate encounter data, it as dr. matthews has also testified, it is very difficult to assess exactly what services medicare advantage beneficiaries are receiving and whether they are quality of care that our beneficiaries are expecting. >> can't measure, you can't
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necessarily fix it. so i think that -- or at least fix it the right way. so what kind of data should cms collect to determine whether beneficiaries of color face barriers to carry in ma programs and how would that data better allow cms to address disparities in the ma program? >> cms needs to be holding the medicare advantage organizations accountable for completing all data elements that would be useful for both tracking the services provided as well as their underlying beneficiary characteristics and conditions. so demographics of course, but also the services provided and the diagnoses. >> great. i also think that disparities -- major breakdown in disparities is income and and where you live in the spectrum of the united states. so in other words rural locations too face great disparities.
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i was also concerned to learn that oig found that 13% of ma's plans, prior authorization denials that oig examined medicare advantage coverage rules and would have been approved under traditional medicare. well, i know that the report didn't include the use of medicare part b step therapy specifically likely due to the timing of the change in policy in late 2018. i would be curious to learn if there are similar improper denials as found in prior authorizations. for a number of years i have championed the safe step act with my colleague which would place guardrails on step therapy protocols in order to ensure that decisions about treatments are made by patients and their doctors, not insurance companies. it is unacceptable for step therapy and prior authorization protocols to be used to deny care to seniors that they are supposed to receive, especially if if they've already failed a certain treatment uh in the step therapy protocols. so miss bliss, given the significant access barrier step therapy can cause i would like
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to understand how you are thinking about this type of utilization management tool. how does step therapy affect quality, and what oversight processes are in place to ensure ma beneficiaries have the same access as ffc beneficiaries? >> thank you. as you noted in step therapy for part party covered drugs was not included in this review so i can't speak specifically to how well it's actually working but i think that you're right that some of the same incentives and concerns about potential delays or denials of access to medically necessary treatments could certainly apply. so we'd be happy to think about potentially conducting new work that might look specifically into step therapy. and we'd be happy to follow up with your staff to talk more about your specific concerns and think through, you know, how we
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might address those. >> thank you. i yield back. >> i thank the gentlemen. mr. joyce, you're recognized for five minutes. mr. joyce, do we have you? >> thank you chair again for holding this hearing and thank you ranking member griffith as well. last year, over 28 million medicare beneficiaries were enrolled in a medicare advantage plan which represents nearly 45% of all medicare patients. in my home district in pennsylvania 13, this percentage is even higher, approximately 50% in several of my counties. public-private partnership is very popular with patients and offers substantial benefits when compared to traditional fee for service medicare and can lead to better patient outcomes. for example, fewer emergency
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room visits, ma beneficiaries experienced 33% fewer emergency room than medicare fee for service beneficiaries or access to primary care as nearly 12% more office visits for dual eligible beneficiaries in ma compared to dual eligible medicare fee for service beneficiaries, and most important to me as a physician, better outcomes for beneficiaries with chronic disease. ma beneficiaries with complex diabetes experienced a 52% lower rate of any complications and a 73% lower rate of serious complications compared to medicare fee for service. now, with all that being said, there is room for improvement and one of the key areas we can work on is cutting the red tape and eliminating unnecessary delays in care through the prior authorization process. i'm a proud cosponsor of
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hr-3173, the improving senior's timely access to care act, and would echo my colleague's words in support of this legislation. another issue that is increasing provider burden is step therapy. healthcare providers prescribe the medication that they know is best for their patients. but step therapy, also known as fail first, is used by health plan to determine coverage and requires that patients fail on an insured preferred medication before the therapy prescribed by their health care provider can be covered. this can cause unnecessary delay in care that a physician knows will result in a better outcome if the first medicine was available to the patient. notably, medicare fee for service does not use step therapy protocols and covers products under part b if they are reasonable and necessary. mrs. bliss, given the significant access barriers step
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therapy can cause, i would like to understand what oversight processes are currently in place to ensure ma beneficiaries have the same access as fee for service beneficiaries, and how you consider patient access in evaluating similar utilization management tools. >> thank you. well, step therapy was not part of this particular evaluation. we are looking at prior authorization for other types of services, so i can't speak to it specifically. but certainly it's very similar in that it's a utilization management technique intended to control costs that potentially could be used appropriate in certain circumstances, but also comes with risks of inappropriately limiting access to care and worsening beneficiary health outcomes. >> that worsening of beneficiary
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health outcomes to us as a group is severely concerning to each and every one of us. now i'd like to with my remaining time address prior authorization. we have heard from long care, acute care hospitals of instances in which an ma plans delay in approving prior authorization requests from medically necessary care have resulted unfortunately in patient deaths. is administration tracking these occurrences, mrs. bliss? >> so, i don't have information specific to patient deaths or the health outcomes for the patients in our sample beyond the denial. but i can say that denials for post-acute care were a prominent type of denial in our evaluation. >> and would you agree that monitoring for occurrences like patient death should be important? >> yes, monitoring for patient deaths should be very important. >> thank you. i think that the importance of
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having this hearing illuminates how these discussions and oversight need to be a part of the solution. again, i thank chair to get and ranking member griffith for holding this important hearing and i yield the remainder of my time. >> i thank the gentleman. now pleased to recognize the vice chair of the subcommittee mr. peters for five minutes. >> thank you very much, madam chair. i'm just struck by one thing which has been very interesting. again, the government has failed to appreciate the foundational role of good data decision making. it's really hard for us in any context. i said this with respect to covid, to make good decisions about what to do when we don't know what's going on and that's data. so i'm interested in any anything we can do to bolster the efforts of these agencies to understand this and as well as the public and congress. the medicare advantage program is intended to cover the same services that beneficiaries receive under traditional medicare.
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and while there's been significant movement of beneficiaries to medicare advantage, as we've heard, nearly 50% of all beneficiaries choosing ma over traditional medicare. the rate of disenrollment for medicare advantage plans in the past year of life is double that of traditional medicare and the churn has come in significant cost the medicare program and for that reason, among others, it's important to get a sense for why that is. miss gordon, in your testimony, you discuss findings around beneficiaries this rolling for medicare advantage. plans to join traditional fee for service medicare. why might some beneficiaries make this decision? and can you elaborate on what these disenrollment numbers suggest about the quality or adequacy of certain plans for older seniors, if we can draw that conclusion? >> some disenrollment is to be expected. there's competition, patients change their mind about what they need and they disenroll.
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it's important to monitor for higher levels of disenrollment because it could indicate that beneficiaries are having difficulty accessing providers or specialized care. and we heard from some stakeholders when we were doing this work that that folks did in fact articulate a disenrollment need because they could not access specialized care. >> in your testimony you say that disenrollments from ma plans in the beneficiary's last year life cost the program 422 million in 2016, 19 million in 2017. more than if they stated medicare advantage plans. why, what's the basis for making that conclusion? why is that the case? >> we compared what would have been spent had the beneficiary stayed in their medicare advantage plan to what they actually received in what was paid under their fee for service benefits after they disenrolled for that year. so in 2016, that amount was about $422 million.
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and in and in 2017 it was $490 million, i believe. and this accounts -- if they had stayed in medicare advantage plans, the medical plan would have covered all of those services for the lower amount. >> i do see that in may of 2022, cms acted in response to those recommendations began reviewing this enrollment patterns for beneficiaries in the last year of life. if that review corroborates the finding that beneficiaries in the last year, black tend to disenroll it just. unfortunately, high numbers. what changes could cms put in place, maybe you addressed this already, but to better ensure that beneficiaries are receiving the care that they need at all stages of their lives? >> the high proportions of disenrollment are a red flag and it just requires additional scrutiny in the way that cms is responsible for overseeing what medicare advantage plans
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provide. they can make changes to the star rating which would alert beneficiaries when they're making decisions around which plans to choose. cms can can increase its oversight. it can issue warning letters and even findings. they have the ability to look and assess at the benefits package that are being offered and the network adequacy and all those are steps that cms could take. >> ok. obviously as our seniors age, they're more likely to need more frequent and more sophisticated care. so we want the programs to make sure that they're welcome to address the medical needs so that participants aren't looking around for care at the time when they need it the most. i appreciate very much the chance to hear about this and the hearing. and i yield back. >> thank you. mr. tonko, you're recognized for five minutes. >> madam chair, can you hear me? thank you. thank you, madam chair. i appreciate you holding this
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hearing today to examine what can be done to strengthen program integrity in the medicare advantage program. this is a very important issue in my district which has a higher than average enrollment in medicare advantage. most beneficiaries i speak with are very happy with their locally based ma plans. however, the witnesses today have described how some other unscrupulous plans have put profits over patients and overcharged the government. in an effort to be good stewards of taxpayer dollars, we should always be willing to examine how we can make certain our medicare dollars are being spent wisely and efficiently to help all seniors in need.
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we've heard today about how so-called coding intensity can affect the risk scores, and thus the amount of money ma plans receive from medicare. ma plans have several tools available to them to facilitate the collection of the diagnosis codes used for these risk adjustment purposes, tools that are not available in the traditional medicare program. i wanted to particularly discuss one of these tools, health risk assessments, and how ma plans use these assessments to increase payments. so miss bliss, oig used to reports in recent years that focused on ma plans use of health risk assessments to drive billions of dollars in additional payments to the plans. specifically 80% of the $2.6 billion were generated solely using in home health risk assessments. can you explain what health risk assessments are and what purpose they are supposed to serve? >> sure. health risk assessments are when health care professionals collect information from beneficiaries about their health status, their health risks, and their daily activities. the intent is to improve care coordination and help outcomes for those patients. health risk assessments can
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occur in a medical setting like in your physician's office as part of a regular visit. but they also can occur in beneficiary's homes and sometimes medicare advantage organizations contract with vendors to go to beneficiary's homes and conduct those assessments. the concern that we have, particularly with the in home health risksments, is when we see those assessments generating diagnoses for often very serious conditions that lead to extra payments to the medicare advantage plan. but we don't see records of any other services or follow up care being provided to that patient to treat that condition. >> so, why might the use of in home health risk assessments be a cause for concern when it comes to the quality of care received by ma enroll? >> well, when we see that there are serious diagnoses added through one of these
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assessments, but then there's no evidence that any care services were provided to treat that condition, we're worried about whether that information even made it back to the beneficiaries, regular doctors to take into account, or was that diagnosis really supported, or was it not supported, in which case it may have led to an improper overpayment to that plan? >> are there safeguards that can be put in place to address some of the potentially improper uses of in home health risk assessments? >> absolutey. and we've recommended two really important safeguards. one is to require medicare advantage organizations to implement best practices for care coordination for beneficiaries who receive health risk assessment. the other is for cms to reconsider whether to even allow in home health risk assessments to be the sole source of
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diagnoses for risk adjustment payments. >> dr. matthews, med pack has also studied the effects of tools such as health risksments on payments to ma plans. would you say that the misuse of high risk assessments to drive up payments is used broadly or just by a few particular ma or g issues? >> like my colleague at the office of inspector general, we have estimated that the use of health risk assessments and chart reviews where those are the exclusive sources of diagnoses that are not validated by encounter records reflecting actual service use. we estimate that those two vehicles account for about two-thirds of the overpayments that stem from coding intensity. >> ok, well with that madam chair, i've exhausted my time and i yield back and thank you again.
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>> thank you so much. chair now recognizes ms. custer for five minutes. >> thank you so much, madam chair. i appreciate this hearing and your time. like so many americans, people in my home state of new hampshire rely upon medicare to access high quality health care when they need it. after paying into the system throughout their professional careers, medicare is a program they know they can count on to connect them with providers and cover necessary services to stay healthy as they age. we're seeing dramatic shifts with the way beneficiaries want to receive this care with enrollment in medicare advantage more than doubling over the past 10 years, as we've discussed. now is the time to ensure that medicare advantage programs can continue the tradition of medicare seeking to provide affordable, accessible care and improve clinical outcomes, recognizing that medicare advantage plans use prior authorization as a tool for both maintaining clinical standards of practice and containing costs
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to stay within their benchmark rate. many of the concerns raised here today relate to how prior authorization can become a barrier to care, burdening an already strained workforce with administrative procedures and preventing patients from receiving necessary care. miss bliss, your testimony addressing how medicare advantage organizations delayed or denied beneficiaries access to medical services, even in cases where the care was medically necessary. studies find there's often confusion on who's responsible for handling appeals. how can medicare advantage plans better support beneficiaries seeking to appeal a prior authorization decision in order to receive care? >> thank you. that's an important question. and we have found previously that beneficiaries and providers
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appeal only about 1% of medicare advantage denials of prior authorization and payment denials as well. and so that's just a tiny fraction of the denials actually get appealed. think typically a beneficiary would work with their provider to go through that process, but we have heard and are concerned about both the delays and care and the administrative burden for all involved in trying to correct inappropriate denials. >> thank you. now, reports have found that many prior authorization denials are eventually overturned and the april oig report found medicare advantage plans approved the vast majority of prior authorization requests. with the goal of facilitating access to care, what are the reasons that a medicare advantage organization would reverse an initial denial decision, and what steps can be taken to reduce prior authorization for services that are routinely approved?
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and that's for you, miss bliss. >> thank you. yes, there are a number of reasons that a medicare advantage organization might initially deny and then later overturn its own denial, which we found happened about 75% of the time. it could be that the initial submission for the request did not include all the information that the medicare advantage plan would need to approve the request. and so it may have been initially an appropriate denial based on the information that the medicare advantage company received. but it's also possible in some cases that that initial denial was incorrect, should have been approved, and that the medicare advantage organization ultimately upon appeal realized its error. but since only 1% of denials get appealed, then errors that are made at that initial denial that aren't repealed may go uncorrected. >> well, it may result in delays
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from lengthy and complex prior authorization and appeals process, and may impact clinical outcomes. that's my biggest concern. this is leading to provider strain. i've been talking in recent weeks with providers who are dealing with burnout. they're just so tired of all this paperwork and red tape. so, i'm wondering if we can consider or require electronic submission that would eliminate burdensome paperwork and simplify the process. in 2022, can't we at least consider electronic prior of the authorization? >> yes, certainly that's an important consideration. anything that can both reduce the burden for all parties involved in requesting and considering prior authorization, and hopefully can improve the accuracy of the determinations that are made.
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we found some cases where prior authorization was denied because someone had overlooked a document that was in the record. >> well, thank you. i think fax machines are outdated and i would certainly support electronic transfer of records. and with that i yield back. thank you so much, madam chair. >> thank you so much. chair now recognizes that ever-patient mr. o'halloran for five minutes. >> thank you, madam chair and ranking member for this hearing today. i want to express my extreme disappointment that cms is not here today. it is important to hear from them as we seek to improve access to care in rural, tribal, and underserved communities and throughout this entire system. i have sat here in amazement that we're talking about issues that had been unresolved from the goa from 2011, 2014, 2016,
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on and on and on. and the only conclusion i can come to is either the agency is understaffed, it doesn't have the technology to address the issue, it's overwhelmed, that congress has not been paying enough attention to its ability to make sure that we are saving the taxpayers money by actually reforming the process and seeking the savings from, whether it's fraud or other issues, to go back into this system so that we can have a system that actually works. and so, i'm very disheartened from what i've seen today. and i think the medicare advantage process is a good advantage but they're obviously this room for a lot of improvement, both in the medicare advantage system and cms. more than 60,000 seniors are enrolled in medicare advantage in arizona's first congressional
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district, representing nearly 37% of eligible seniors. across the state of arizona, more than 47% of seniors are on medicare advantage. and according to data from the hhs inspector general, nearly 51% of seniors nationwide are going to be on medicare advantage by 2030. this is why it is important to this committee to spend time getting it right. seniors in rural, tribal, and underserved communities throughout arizona lack easy access to their doctor in the first place or their health care provider. if you travel throughout northern arizona, you will see how far it is for many to see even their primary care doctor. and my frustration, as i'm on medicare advantage, i'm on medicare, and just as ms. custer just indicated, you know, there's so much paperwork and so
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much too many problems. we have to eliminate this process and get it to the point where it actually works for the people that are being provided health care and have to go through this terrible system as far as paperwork goes, and even getting ahold of somebody to talk to. cms quality bonus program was designated to incentivize plans to create higher quality, more accessible care for seniors. however, the program seems to be in need of some improvement. a lot of improvement, i feel, particularly to ensure that seniors in rural, tribal, and underserved communities can access their providers, the few that there are. we need to improve transparency to data to ensure what seniors can have as meaningful way to evaluate which healthcare plan is right for them and their needs, and which one is working. without this transparency and data necessary to make decisions, consumers, particularly those who are historically underserved, will continue to be unable to access care that is necessary for their
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medical needs. having a lack of access to data is not a new issue. in 2014, gao raised the concern that cms may not be collecting the data that is needed to best access the quality of medicare advantage plans. i coming from the business environment, i just don't understand how you do things without data. make decisions without data. it is critical that cms be appropriately prepared to give consumers notice of quality of their plans so that seniors, particularly those in rural need specialty care, can make an informed decision. miss gordon, how would you would collect a more robust data, allow cms and the public to better gauge whether seniors in rural and tribal communities are getting the care they need from ma programs and the ability of cms to respond to an ever-changing environment?
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>> it's cms' responsibility to require the medicare advantage organizations and their plans to submit fully complete, accurate encounter data. it's also their responsibility to review those data and to ensure that they are validated. the data are needed as you suggest in order to be able to monitor that services are appropriately provided, that they are the quality that are expected and meet coverage requirements, and that they are equitably distributed and that all beneficiaries are able to access those cares. so, it is essential that cms require the medicare advantage plans and organizations to submit complete and accurate encounter data as well as follow up to ensure that that is happening. >> thank you. madam chair, i yield and we have a lot of work to do. >> i thank the gentleman.
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we now have mr. bhushan, i understand in the committee room visiting us as a guest to this subcommittee, and we'd like to welcome you. you're recognized for five minutes. >> thank you, chairwoman and ranking member griffith. i appreciate the subcommittee is holding this hearing and it's timely and i'm grateful for the opportunity to participate. most of us, members, witnesses, and the medicare advantage or organizations whose actions we've been discussing, share a desire to see the medicare advantage program succeed. with so many millions of people enrolling in medicare advantage and the number of growing exponentially each year, it has never been more important for us to ensure this program works for patients. we know and have heard repeatedly here today that medicare advantage means a lot to a lot of seniors. it offers them options to decide what kind of health insurance they need when they reach age 65. unlike traditional fee for service, medicare ma plans with
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$0 premiums are often available and 90% of plans include additional benefits like vision, dental, or hearing. we must continue to support the availability of plans like these for seniors who prefer them. but just because the program is the best option for seniors doesn't mean it's flawless. we've heard quite a bit of evidence today that there is room for improvement. i appreciate that every one of the witnesses who came here today has provided concrete ideas for how to improve the program. as you all likely know, i have a few ideas myself about how to improve the ma patient experience when it comes to utilization of services, particularly the prior authorization process. the improving senior's timely access to care act, hr-3173, has been mentioned a few times today already. it's a bill i've led for several years alongside my colleagues, . our goal with this bill is to facilitate the adoption of an electronic prior authorization
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process that is far quicker and more efficient than what doctors and patients currently endure. it also requires, as hhs, to require to establish a process to facilitate real-time decisions for items and services that are routinely approved. it also has ma plans reporting their use of prior authorization and the rate of approvals or denials, and also encourages plans to use evidence-based guidelines in their prior authorization process. the result will be less administrative burden for providers and more information in the hands of patients. it will allow more patients to receive care when they need it, reducing the likelihood of additional, often more severe complications. in the long term, i believe it would also result in a cost savings for the health care system at large by identifying problems earlier and getting them treated before their patients have more
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complications. as was previously mentioned, an ama survey in 2020 of 1000 doctors revealed that about 34% of them said that prior authorization has led to serious adverse events for a patient in their care due to delays in the prior authorization process. most members of this subcommittee are co-sponsors already of hr-3173 and i appreciate that. miss bliss, the investigation report that oig released in april discusses 33 denials of prior authorization requests. i know there were requests that were analyzed came from all the largest mao's. was the sample also representative of the medicare advantage program in terms of where the providers were geographically located or what the requests were for? >> thank you for that question. so, we sampled from all of the denials issued by 15 of the largest medicare advantage
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organizations, by enrollment, which accounted for about 80% of all medicare advantage enrollees. and so our results are projectable to the totality of denials across all 15 of those large medicare advantage organizations. >> ok, great. so i guess the answer would be yes, it does take into account geographical locations and what the requests were for. so dr. matthews, your recommendations include a mechanism for direct submission of provider claims to medicare contractors. as med pack considered whether that mechanism could be one that that operated electronically in real time? >> yes, sir, we have. the basis for that recommendation comes from discussions with stakeholders who are currently submitting medicare advantage encounter records directly to plans, and sometimes the records are rejected by the plan without
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explanation, or there is variation among the plans that a provider works with with respect to content and format of the encounter records, and some providers that we've talked with said there are other ways of submitting this information directly to cms the way they currently submit things like med power records for all of their patients, whether it's fee for service or medicare advantage. and so we think there are ways that these encounter records on behalf of ma enrollees can be submitted with less administrative burden and more timely than perhaps they are being submitted now. >> thank you. in 2022, we should be going to an electronic process for a lot of these things including prior authorization. >> i yield back. >> i'm now very pleased to welcome mr. bill arrakis to the committee and recognize you for five minutes.
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>> thank you. thank you, madam chair. thank you for holding this hearing. i think we all share the goals to ensure our medicare patients have the highest quality care at the lowest cost to the taxpayer. which is why medicare advantage is so important and so popular, including in my district, we have over 59%, that's above the average nationwide, of seniors that utilize this program. studies have shown that medicare advantage maintains lower per beneficiary government spending and greater value for the taxpayers' dollars, including almost $2000 per year on expenditures. the researchers explained the federal government pays less and gets more for its dollar in medicare advantage compared to traditional medicare part a and b. this also means extra benefits like transportation and dental and vision plans that seniors enjoy.
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in fact, despite inflation and costs rising for americans around the country, average premiums for ma actually fell to their lowest levels in 15 years to just $19 per month. so i believe it's important to discuss how we can improve the program further, it's important to remember the value these programs provide towards better patient outcomes while saving money in the long run. so my first question is for miss bliss. in producing this report, do you evaluate a comparison between medicare fee for service versus medicare advantage overall patients outcomes, in your analysis? >> ok. >> one issue of importance and
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this discussion is risk adjustment. risk adjustment ensures that there are adequate resources to treat beneficiaries who may need more complex and costly care, and thus it's important to accurately identify potential illness for at risk patients early in order to improve health outcomes. you know that. which is what this is all about. i know there are some concerns about the accuracy of risk adjustment reporting, but it's also possible this is due to actual patient needs that may not have been found or reported by providers to cms. miss gordon, can you explain further how your report discusses the need for cms to improve its validation methods for risk adjustment purposes? miis gordon, please. >> yes. complete and accurate encounter
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data are needed to ensure that medicare advantage plans payments are risk adjusted based on the clinical diagnoses and treatments needed by beneficiaries. >> one more question. miss gordon earlier, you stated that the improper payment rates for medicare advantage are around 10%. is that correct? but is this taking into account underpayments? can you clarify what is the net and proper payment for fee for service and what's the net rate for medicare advantage? >> so, the 10% is the net rate in both overpayments and underpayments. and we can get back to you on the exact amount. >> please do.
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i appreciate very much. thanks for allowing me to wave on madam chair. >> thank you. good to see you. and i just want to thank all of the witnesses for participating in this today. a lot of good information today. this is really in the grand bipartisan, this subcommittee, and you can be assured that we're going to be following up with the agency. i'd like to remind members that pursuant to committee rules, they all have 10 business days to submit additional questions . and i would ask those respond quickly to any. we also have had one unanimous consent request for an article
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from the washington advantage practices published june 5, 2022. and without objection that is entered into the record. thank you. committee adjourned. [captions copyright national cable satellite corp. 2022] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit]
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