This article is part of the HHCN+ membership
This week, the Centers for Medicare & Medicaid Services promoted new contracts with numerous health insurance plans to reduce the number of advance approvals and to promote the entire previous approval process. However, the nature of contracts, other recent Medicare advantage moves, and the modifiable philosophy of CMS leadership related to MA makes us feel wary of the future, if not pessimistic, at least for home care.
I write about providers that denounce complex and time-consuming pre-authentication processes. And I'm in healthcare that involves reaching the pharmacy counter just to be told that my medication is not ready for days, if the doctor's decision is correct, while my health plan is determined if my health plan is correct. Therefore, news that CMS is trying to limit advance approval is welcome.
But I can praise the intention behind the movement, while criticizing the details. We are pleased that CMS is about to change its pre-authorization status, but the agreement that CMS has come with a health plan is just that – an agreement. They are unable to solidify or regulate any of the promised changes, and are unable to explicitly address home care and post-acute care. Unfortunately, the benefits for home health providers are all about speaking, and there is no substance.
CMS recently announced plans to step up audits of its Medicare Advantage (MA) plan. Again, my reaction is mixed. It supports the need to monitor and improve MA functionality, but is concerned that increased surveillance could further narrow the already thin margins for home health providers.
Dr. Mehmet Oz, administrator of CMS, sorts out his long-standing relationship with the MA sector.
This week's exclusive member-only HHCN+ update will cover increased monitoring of CMS Medicare Advantage and the “commitment” it recruited from the health plan, reducing advance approval. We provide analysis and key points including:
– What Oz's History says about the future of MA
– What does MA Auditing mean to the home care industry and who can be hurt the most
– My views on voluntary agreements with health plans
A leadership approach to CMS' MA
OZ's unique relationship with MA adds a mystery element that predicts how MAs fluctuate and therefore change the home health industry.
In June 2020, former CEOs of Kaiser Permanente, Oz and George Halvorson wrote an article proposing “Ma for everyone,” saying “infinitely better than the flawed ideas of Medicare for everyone.”
The pair sought a healthcare system that provided quality affordable care while creating healthy crisis resilience.
“We were able to achieve these goals by purchasing healthcare coverage to all Americans who are not using Medicaid through the MA program, which is already very well used by a third of Medicare beneficiaries.” “This universal coverage can be funded entirely with financial security using an affordable 20% payroll tax, which is close to the amount that current employers are currently spending to purchase insurance care.
At the time of publication, Oz owned hundreds of thousands of dollars worth of stock in UnitedHealth Group (NYSE: UNH). UnitedHealth accounts for 29% of MA subscribers nationwide.
Almost five years later, OZ's approach to MA appears to have evolved as the Covid-19 pandemic waned from focus. In March, Oz responded to questions from Sen. Elizabeth Warren (D-Massachusetts) and said reducing fraud, waste and abuse in the MA was a more reasonable way to improve American healthcare than cutting Medicaid funds (although, as Leadage pointed out, he also refused to oppose Medicaid cuts).
As such, OZ has become a person who is willing to get caught up in MA from a government and employer-sponsored health system evangelist. In Oz's words, “The new sheriff is in town.”
All of this is that OZ has a strong history as a supporter of MA. Home-based care providers should consider it in their own thoughts as they work to predict or adapt to CMS policy shifts. That said, Oz might have something to prove now. He sells his UnitedHealth shares and is publicly committed to cracking down on fraud, waste and abuse. We may see him very often aiming for specific issues within the MA, but as the increased audit activity suggests, those efforts may not occur favorably for the home therapy sector.
Increased monitoring
CMS' commitment to strengthen auditing of MA plans is consistent with OZ's response to Warren. Under this new plan, CMS will audit all covered MA contracts for each payment year, facilitating audits for payment years from 2018 to 2024. We promise to use “advanced” technology to analyze medical records, find unsupported diagnoses and expand our medical coder staff.
These audits pose potential risks to home care providers.
“Whenever an MA organization reduces revenue, we are looking for ways to reduce spending,” Nicole Fallon, vice president of integrated services at Leadingage, previously told HHCN. “The reality is that MA plans are adapted to the financial environment, so they may try to reduce the number of (optional) the plans offer, reduce the number and magnitude of supplemental profits, and further reduce provider payments, particularly if the audit finds a significant upcode.”
Washington, DC-based Reading is an association of over 5,000 non-profit aging service providers and organizations.
The slim MA rate outcome that I have been looking at most is impact on nonprofit organizations, especially as audits increase.
Non-profit home health providers typically provide care to patients that are not otherwise available due to their low margins. These providers and their patients may be particularly struggling if their fees drop, as MA rates may not cover the cost of a visit and the overhead is much less.
Fallon said the audit could deprive the MA plan of home care, but it is still necessary to maintain the Medicare Trust Fund. Still, she called on CMS to ensure that businesses follow advance approval rules and make similar investments to ensure that Medicare beneficiaries do not receive the care they need.
While Fallon's hopes for increased attention to advance approval have come true, a group of about 50 health insurance plans announced that they have worked with the CMS to pledge to reduce advance approval, I think there is a lot left to be left if the improvements Fallon actually talked about will actually be handed over as a result of this pledge.
Previous approval
Oz's approach to limiting prior approval reminds us of Robert F. Kennedy Jr.'s approach to phasing out synthetic food dyes in a phased manner. The Food and Drug Administration “studyed” food companies to replace synthetic dyes with natural ones.
As someone who is allergic to red dye 40, I'm probably excited that the government is encouraging food companies to reduce these dyes.
The friction for me is that the situation seems very tenuous. Kennedy was never convinced of me that change was broad or lasting when he and the food company said “we don't have an agreement, we have an understanding.”
While some companies, including Kraft Heinz, have taken action, the company says 90% of its US products already have no synthetic dyes (Kraft Mac & Cheese has been dyed with spices containing turmeric for over a decade).
OZ's pre-authorization agreement will hit the same, non-iron flavor.
CMS boasted that Oz had secured a “pork” of “voluntary action” to reduce previous approval. I really hope that health plans that we have agreed to speed up and limit advance approval will remain faithful to their words, but we have no guarantees. We also want to see the level at which CMS updates the public with progress on advance approval. The pledge from the Health Plan includes factors related to increased transparency to consumers, but this could be relatively vacant without government oversight and accountability.
It may also be duplicated. Fallon previously told HHCN that many of the health plans match existing requirements or requirements already planned for implementation.
In addition, they are unable to specifically address the home-based care community.
“We hope that these efforts will be meaningfully expanded to post-acute care settings, particularly in skilled nursing facilities (SNFS) and home healthcare institutions. “Patients leaving hospitals after the acute phase face the highest rate of approval for denial or delays. So far, announcements from insurance companies have not addressed prior approval practices in these settings and do not acknowledge the burden of ongoing concurrent review requirements.”
Between the CMS' plans to strengthen MA audits and the overwhelming pledge to reduce advance approvals, I am concerned about not only addressing the challenges of the home care industry, but actually making promises that they could in fact exacerbate them.
I hope I am too cynical about my follow-through on my health plan pledge and start hearing from home caregivers about improvements related to the challenges of advance approval. And there was a recent moment when I was more hoping for the potential for CMS support in home care.
For example, Oz pays special attention to home and community-based services. He visited America's first All-Inclusive Care Seniors (PACE) program in Lok, San Francisco in May.
“This is another way of thinking about how you can age in America,” Oz said during his visit.
Such visits could indicate an increase in attention to home care, and hopefully expand the steps to protect providers from increased actions to expand the promising model and some of the financial and administrative challenges that have increased with the growth of managed care.
