America’s Health Insurance Plans (AHIP) is blasting efforts by the Trump administration to recoup what Medicare managers see as excess risk-adjustment payments to Medicare Advantage plan providers.
The Centers for Medicare and Medicaid Services (CMS), the agency that oversees Medicare, wants to eliminate an adjustment mechanism that that’s supposed to make spending on traditional Medicare coverage and Medicare Advantage plan coverage actuarially equivalent.
CMS has proposed applying the change to Medicare Advantage plan payments made starting in 2012, when CMS first told health insurers about the new risk-adjustment methodology.
AHIP President Matthew Eyles writes in a comment letter than the CMS Medicare Advantage risk-adjustment proposal is “fundamentally unfair and ill-conceived.”
The proposed change ”would undermine stakeholder confidence in the agency’s willingness to comply with the law and to act as a fair partner with the private sector,” Eyles writes. “Private-sector partners must be able to rely on the government’s word and know that the government will adhere to its commitments, whether stemming from statute or otherwise.”
The Medicare Advantage Risk-Adjustment Program
Congress has built many coverage holes into the traditional Medicare program, both to discourage unnecessary use of care and to cut down on direct spending.
Private health insurers and other companies run the traditional fee-for-service Medicare program for CMS, but the traditional fee-for-service program offers standardized benefits, and the administrators stay behind the scenes.
The Medicare Advantage program gives private insurers a chance to offer Medicare plans, under their own brand names, that fill in most of the gaps in traditional Medicare coverage.