Senator Scott Calls for Obama Administration to Halt Plans to Cut Medicare Advantage

WASHINGTON – U.S. Senator Tim Scott (R-SC) and fellow Senate Republicans earlier this week sent a letter to Centers for Medicare & Medicaid Services (CMS) Acting Administrator Andy Slavitt calling for the Obama Administration to halt its plans to implement policy changes that reduce funding for the Medicare Advantage (MA) program. Approximately 216,000 South Carolinians, or nearly a quarter of the state’s Medicare beneficiaries, utilize Medicare Advantage, which is facing several pending proposed policy changes that would result in cuts to the program next year.

“We are increasingly concerned about the impact of these cumulative actions on the program and the seniors who depend on it for their health care coverage needs,” the Senators wrote.

The Senators noted three areas of concern with proposal, including employer group waivers plans, risk adjustment and encounter data.

“These proposed changes have the potential to create instability in the Medicare Advantage program and undermine health plan choices that are valued by millions of Americans,” the Senators continued. “Recognizing the serious threat these proposals pose to the health coverage of Medicare Advantage enrollees, we strongly recommend that you carefully consider the impact of these changes on Medicare beneficiaries and, instead, adopt policies to strengthen Medicare Advantage.”

In addition to Senator Scott, the letter was signed by: Senate Majority Leader Mitch McConnell (Ky.), Senate Finance Committee Chairman Orrin Hatch (Utah) and Senators Chuck Grassley (Iowa), Mike Crapo (Idaho), Pat Roberts (Kans.), John Cornyn (Tex.), John Thune (S.D.), Richard Burr (N.C.), Johnny Isakson (Ga.), Rob Portman (Ohio), Dan Coats (Ind.) and Dean Heller (Nev.).

The text of the letter is below and a signed copy can be found here.

March 9, 2016

Andy Slavitt
Acting Administrator
Centers for Medicare & Medicaid Services
U.S. Department of Health and Human Services
Hubert H. Humphrey Building, Room 314-G
200 Independence Avenue, SW
Washington, DC 20201

Dear Acting Administrator Slavitt:

We write to express our concerns with a number of proposed policy changes in the 2017 Advance Notice that would reduce funding for the Medicare Advantage program. We have serious concerns about the negative impact these proposals would have on the health care choices and benefits of Medicare Advantage enrollees.

The Medicare Advantage program is a valuable source of high quality, affordable health coverage for more than 17 million seniors and individuals with disabilities, including many who are dually eligible for Medicare and Medicaid and others who have complex medical needs. Many beneficiaries choose to enroll in Medicare Advantage plans because they appreciate the care coordination, disease management programs, preventive care, and other services offered by these plans.

Medicare Advantage remains popular in spite of a number of regulatory and legislative actions, including cuts included in the Patient Protection and Affordable Care Act, which have threatened to undermine the program’s ability to provide seniors the care they expect. We are increasingly concerned about the impact of these cumulative actions on the program and the seniors who depend on it for their health care coverage needs. We are specifically concerned about the following three proposals.

• Employer Group Waiver Plans: Medicare Advantage retiree coverage delivers proven care coordination and disease management activities for 3.2 million retirees nationwide. The proposal to revise the payment and bidding model for Employer Group Waiver Plans would negatively impact the retiree coverage provided to beneficiaries who receive coverage through their employer.We are particularly concerned that CMS is considering moving forward with this policy administratively, even after Congresses controlled by both parties rejected this policy when it was included in the President’s budget request.
• Risk Adjustment: While we appreciate efforts to improve the accuracy of the risk model for dually eligible beneficiaries, the proposed changes to the risk adjustment model could undermine plan efforts to improve beneficiary health through early detection and prevention of chronic conditions. Additionally, we would note that this is the third model update in recent years and the fifth consecutive year for changes in how the scores are calculated. Such frequent changes add unnecessary cost, complexity, and uncertainty to the program.
• Encounter Data: The proposed changes would increase the percentage of risk score calculations that are based on encounter data from 10 percent to 50 percent. This is problematic because the encounter data system currently has numerous unresolved operational and technical issues and fails to capture a reliable, comprehensive picture of beneficiary diagnoses.

These proposed changes have the potential to create instability in the Medicare Advantage program and undermine health plan choices that are valued by millions of Americans. Recognizing the serious threat these proposals pose to the health coverage of Medicare Advantage enrollees, we strongly recommend that you carefully consider the impact of these changes on Medicare beneficiaries and, instead, adopt policies to strengthen Medicare Advantage.

Thank you for considering our views on these critically important issues.