Better Medicare Alliance Responds to MedPAC Report to Congress

Washington, D.C.  – Better Medicare Alliance, the nation’s leading research and advocacy organization supporting Medicare Advantage, responded today to MedPAC’s March 2022 report to Congress on Medicare payment policy.

“We appreciate MedPAC’s acknowledgment that ‘beneficiaries should be able to choose among Medicare coverage options,’ and its recognition of Medicare Advantage’s aim ‘to innovate and use care management techniques to deliver more efficient care,’” said Mary Beth Donahue, President and CEO of the Better Medicare Alliance. “Unfortunately, the Commission’s recommendations do not take into consideration the abundant evidence of Medicare Advantage’s better value to the government and beneficiaries. For example, an actuarial analysis from Milliman – released less than six months ago – which showed lower per-beneficiary spending and total program costs in Medicare Advantage than fee-for-service Medicare. In addition, the report does not recognize published data on consumer cost savings in Medicare Advantage as compared to FFS Medicare, which limits the report’s ability to provide a holistic comparison of value between these programs. Medicare Current Beneficiary Survey (MCBS) data shows average consumer savings of $1,640 a year in Medicare Advantage.”

Donahue continued, “The report also discounts the robust set of evidence on Medicare Advantage quality, waving off the rigorous quality standards delineated in the Star Ratings program, even as CMS rightly describes Star Ratings as ‘important tools … [that] deliver meaningful information about the quality of each plan.’ This information tracks closely with separate research on Medicare Advantage quality and outcomes from Avalere Health, which shows a 43% lower rate of avoidable hospitalizations for any condition in Medicare Advantage, compared to FFS Medicare, as well as lower rates of hospital readmissions, and higher rates of preventive care and screenings.”

“Policymakers know the value that Medicare Advantage offers to beneficiaries. That’s why a record-setting 409 combined members of the U.S. House and Senate – a bipartisan supermajority of Congress –  sent letters to CMS declaring support for Medicare Advantage,” concluded Donahue. “We believe these bipartisan leaders will protect the choice of health coverage that 28.5 million of their constituents find in Medicare Advantage.”

For further understanding and analysis of claims found in MedPAC’s report to Congress, Better Medicare Alliance has provided the fact sheet below:

CLAIM: “… private [Medicare Advantage] plans in the aggregate have never produced savings for Medicare”
FACT: An October 2021 actuarial analysis from Milliman finds that the government spends $949.39 per-member-per-month for beneficiaries in fee-for-service (FFS) Medicare, compared to only $942.53 for beneficiaries of a similar health status in Medicare Advantage (MA). The report goes on to add that, even with a more conservative estimate of per-beneficiary spending in FFS Medicare, “MA is still less expensive in total program costs than FFS” adding, “findings suggest that overall MA offers significant value to the federal government.”

CLAIM: “In 2022, [MA] plan payments remain higher than FFS spending levels.”
FACT: Again, Milliman’s October 2021 analysis finds lower per-beneficiary government spending ($942.53 vs. $949.39) for beneficiaries of similar health status in Medicare Advantage than FFS Medicare, as well as lower total program costs. MedPAC’s arguments related to government spending on Medicare Advantage also fail to account for the value that Medicare Advantage provides to consumers. For example, Medicare Advantage beneficiaries report an average of $1,640 less per year in total health expenditures than enrollees in FFS Medicare.

CLAIM: “The current state of quality reporting in MA is such that the Commission can no longer provide an accurate description of the quality of care in MA.”
FACT: Medicare Advantage plans are held to strict quality standards through the Centers for Medicare & Medicaid Services’ (CMS) Star Ratings program, which, CMS explains, provides “meaningful information about the quality of each plan.” For 2022, a record-setting 90% of beneficiaries in Medicare Advantage Prescription Drug (MA-PD) plans are enrolled in 4- or 5-star plans. A CMS fact sheet shows that average Star Ratings for quality measures like “getting needed care,” “customer service,” “rating of health plan,” “getting appointments and care quickly” and “care coordination” reached their highest levels in the last four years. This comports with separate research on Medicare Advantage quality from Avalere Health which found higher rates of preventive care and screenings and lower rates of avoidable hospitalizations, compared to FFS Medicare. Medicare Advantage beneficiaries have also weighed in with their own thoughts on quality, giving the program a 94% satisfaction rate in a December 2021 Morning Consult poll.

CLAIM: “…we have no data about their [MA supplemental benefits’] use nor information about their value.”
FACT: Research from Milliman released earlier this year provides a clear picture of Medicare Advantage supplemental benefit offerings for 2022 and how many benefits are being targeted to chronically ill seniors. The data shows, for example, that more than 1.6 million beneficiaries with congestive heart failure are targeted for receiving extra benefits in 2022, as are more than 1.5 million diabetics. A separate Milliman analysis  found that the additional benefits available in Medicare Advantage, combined with lower cost-sharing compared to FFS Medicare, yield $32.5 billion in total added value each year for beneficiaries. Finally, polling from Morning Consult shows that strong majorities of Medicare Advantage beneficiaries have personally used supplemental benefits such as vision (66%) and dental (52%) coverage. 

CLAIM: “Coding intensity inflates payments to MA plans and undermines the goal of plans competing to improve quality and reduce health care costs.”
FACT: By beneficiaries’ own self-reporting, as captured in CMS Medicare Current Beneficiary Survey (MCBS) data, Medicare Advantage beneficiaries tend to be more medically complex and socially at-risk than their FFS Medicare counterparts. Medicare Advantage beneficiaries are more likely to self-report having three or more chronic conditions, they are more likely to be food insecure, they are more likely to self-report diagnoses of diabetes, COPD, congestive heart failure, or dementia, and more than a quarter of them say they need help with one or more instrumental activities of daily living (IADLs). This is also affirmed in independent research from Avalere Health, which reports that “Medicare Advantage has a higher proportion of patients with clinical and social risk factors shown to affect health outcomes and cost than FFS Medicare.” It is appropriate and unsurprising that Medicare Advantage coding and risk score trends would reflect the truth of this increasingly diverse, at-risk, and medically complex patient population.

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