Better Medicare Alliance Submits Comments to CMS Acting Administrator Slavitt

This letter was submitted via electronic mail to


Mr. Andy Slavitt

Acting Administrator

Centers for Medicare & Medicaid Services

U.S. Department of Health and Human Services

7500 Security Boulevard

Baltimore, MD 21244


RE: Advance Notice of Methodological Changes for Calendar Year 2016 for Medicare Advantage Capitation Rates, Part C and Part D Payment Policies & 2016 Call Letter

Dear Acting Administrator Slavitt:

Thank you for the opportunity to provide comments on the Advance Notice of Methodological Changes for Calendar Year (“CY”) 2016 for Medicare Advantage (“MA”) Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter.

The Better Medicare Alliance (BMA) is a leading advocacy organization supporting MA, which we believe provides higher quality, more affordable coverage for Medicare beneficiaries.  We are a diverse group of providers, patients, plans, and employers dedicated to protecting and strengthening MA to ensure America’s seniors have access to affordable, high-quality health care today and for years to come.

We are troubled by CMS’s proposal to apply further cuts to MA in 2016.  The proposed 1 percent cut is a real cut, particularly at a time when medical costs continue to rise and following double digit cuts to the MA program in the past several years. While MA plans have absorbed a portion of the payment cuts and growing medical costs there are limits, however, on how much of the cuts plans can absorb each year.  As a result, MA beneficiaries are feeling the very real impact of MA payments cuts over the past several years.  A new cut in 2016 contributes to that trend and will lead to higher out-of-pocket costs, fewer benefits, and fewer choices.

A recent Milliman study found that benefit levels have decreased every year from 2012-2015 as a result of MA payment cuts.  In fact, there has been a cumulative decline in the “value add” of their coverage of up to $295 since 2012.  Beneficiaries who need the most care have seen their maximum annual out-of-pocket costs soar by up to $761.  Not only are seniors receiving less value, but they are also responsible for more and more out-of-pocket expenses.  The same study found that fewer beneficiaries have access to MA today than before the cuts began being implemented.  The number of counties in the U.S. with no MA plan has increased from 55 in 2012 to 211 in 2015.  These statistics will only get worse if new cuts are implemented.

The reality is that successes in MA providing preventive services, improving chronic disease management, closing gaps in patient care, pioneering value-based contracts, reducing cost sharing, and improving access to wellness, dental, and vision, are threatened by reductions in resources to the program.  The approach and design of MA has delivered real value for seniors.  Studies have shown that patients enrolled in MA plans had a lower incidence of preventable hospitalizations than those enrolled in fee-for-service (FFS) Medicare.[1]  Overall, MA beneficiaries used fewer hospital resources than those in Medicare FFS by averaging a shorter length of stay and a lower total cost per hospitalization.[2]  As for chronic disease, a comparative analysis in 2012 found that people with diabetes in MA chronic condition special-needs plans—particularly nonwhite beneficiaries—had lower rates of hospitalization and readmission than their peers in FFS Medicare.[3]

In addition to expressing our concern about the funding reductions envisioned for MA in 2016, we would also like to comment specifically on CMS’s proposal to fully phase in the risk adjustment model known as the “2014 model.”  While risk adjustment is complicated, at its core it is about ensuring that an appropriate level of resources are dedicated to caring for complex patients, often with multiple chronic conditions.  The “2014 model” fails to appropriately account for the risk associated with caring for individuals with common diseases such as diabetes, myocardial infarction, and depression and moves to devalue care management programs that would effectively detect beneficiaries in the initial stages of these conditions to slow their progression.  We think CMS should not proceed with the full implementation of the new model in 2016 until the impact on some of the most vulnerable populations is understood.

Finally, we believe that MA is demonstrating how the value-based payment models that Secretary Burwell has committed to encourage throughout the system, and CMS acknowledged in the Call Letter can improve patient care.  Sustained improvements in health outcomes, reductions in cost growth, and innovations in service delivery can be realized when payment shifts toward risk-based models, like MA.  We should not reduce resources to a program that is at the vanguard of proving these models in Medicare can work to improve patient outcomes.

In closing, we appreciate the opportunity to submit these comments. We look forward to a continued dialogue with you, and would be happy to answer any questions.


Krista Drobac

Interim Executive Director

1333 New Hampshire Ave., NW

Washington, D.C. 20036

(202) 640-5943



American Medical Group Association (AMGA)

Association for Behavioral Health and Wellness (ABHW)

Healthcare Leadership Council

Healthways Silver Sneakers Fitness

National Hispanic Medical Association (NHMA)



Indiana University Health

The Latino Coalition

National Association of Manufacturers

The National Caucus and Center on Black Aging

Population Health Alliance

U.S. Chamber of Commerce

UnitedHealth Group








[1] Enrollment in Medicare Advantage managed care plans reduces racial/ethnic disparities in primary care quality in some States: Research Activities, December 2011, No. 376. December 2011. Agency for Healthcare Research and Quality, Rockville, MD.…

[2] Bernard Friedman, Ph.D., H. Joanna Jiang, Ph.D., and C. Allison Russo, M.P.H Medicare Hospital Stays: Comparisons between the Fee-for-Service Plan and Alternative Plans, 2006, HCUP Statistical Brief #66, January 2009

[3] Robb Cohen, Jeff LemieuxJeff SchoenbornTeresa Mulligan, “Medicare Advantage Chronic Special Needs Plan Boosted Primary Care, Reduced Hospital Use Among Diabetes Patients,” Health Aff January 2012 vol. 31 no. 1 110-119

Sign Up for Policy Alerts

Sign up to receive exclusive updates on Medicare Advantage policy.