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This week, the Centers for Medicare and Medicaid Services touted a new agreement with a slew of health insurance plans to reduce the number of prior authorizations and expedite the prior authorization process overall, which could be an incredibly welcome change for home health care providers. However, the nature of the agreement, some other recent Medicare Advantage (MA) moves and the CMS leadership’s changeable philosophy related to MA all leave me feeling, if not pessimistic, at least wary of what the future holds for at-home care.
I write about providers who denounce the complicated and time-consuming prior authorization process – and I receive health care, which at times has included getting to the pharmacy counter only to be told that my medication may not be ready for days while my health plan decides if my doctor’s decisions were correct. News that CMS is seeking to limit prior authorizations should therefore be welcome news.
But I can applaud the intention behind a move while criticizing the details. I am glad CMS is seeking to change the prior authorization status quo, but the agreement that CMS came to with health plans is just that – an agreement. It fails to solidify or regulate any of the changes it promises, and it fails to explicitly address at-home care and post-acute care. The benefits for home health providers may be all talk and no substance, unfortunately.
CMS has also recently announced plans to ramp up audits of MA plans. Again, my reaction is mixed. While I support the need to monitor and improve the way MA is functioning, I am concerned that increased oversight could further squeeze already-thin margins for home health providers.
Complicating matters, CMS Administrator Dr. Mehmet Oz has long-standing ties to the MA sector, which I fear make it unlikely for him to spur the kinds of changes that the home health industry desperately needs.
In this week’s exclusive members-only HHCN+ Update, I cover CMS’ increased oversight of Medicare Advantage and the “pledge” it solicited from health plans to reduce prior authorizations. I’ll offer analysis and key takeaways, including:
– What Oz’s history says about the future of MA
– What MA audits mean for the at-home care industry, and who they could hurt the most
– My take on what a voluntary agreement with health plans really means
CMS’ leadership’s approach to MA
Oz’s peculiar relationship with MA adds an element of mystery to anticipating how MA will fluctuate and, therefore, change the home health industry.
In June 2020, Oz and George Halvorson, former CEO of Kaiser Permanente, penned an article proposing “MA for all,” saying it would be “infinitely better than the flawed idea of Medicare for all.”
The pair asked for a health care system that provides quality, affordable care while creating resilience for health crises to come.
“We could achieve these goals by buying health care coverage for every American who is not on Medicaid through the MA program, which a third of Medicare beneficiaries already use very successfully,” the article, published on Forbes, read. “We could fund this universal coverage entirely with full financial security by using an affordable 20% payroll tax, which is close to the amount most employers currently spend to buy insured care. Half would be paid by employers, so individual Americans would pay no more than 10% of their income to pay for much better coverage than is currently available to most.”
At the time of the article’s publication, Oz owned hundreds of thousands of dollars worth of stock in UnitedHealth Group (NYSE: UNH). UnitedHealth accounts for 29% of MA enrollees nationwide.
Nearly five years later, and with the COVID-19 pandemic fading from focus, Oz’s approach to MA seems to have evolved. In March, Oz responded to questioning from Sen. Elizabeth Warren (D-Massachusetts), saying that cutting fraud, waste and abuse in MA is a more rational way to improve American health care than cutting funding for Medicaid (though, as LeadingAge pointed out, he also refused to oppose Medicaid cuts).
So Oz has gone from an MA-invested, government- and employer-sponsored health care system evangelist to a person willing to reel in MA. In Oz’s words, a “new sheriff is in town.”
All of this to say, Oz has a strong history as a proponent of MA. Home-based care providers should factor that into their thinking as they work to anticipate or adapt to CMS policy shifts. That said, Oz may now have something to prove. He’s sold his UnitedHealth stock and publicly committed to cracking down on fraud, waste and abuse. We may very well see him take aim at certain issues within MA — but as the increased audit activity suggests, those efforts might not play out favorably for the home-based care sector.
Increased oversight
CMS’ promise to ramp up audits of MA plans does align with Oz’s response to Warren. Under this new plan, CMS will audit all eligible MA contracts each payment year and expedite audits for payment years 2018 through 2024. It promises to use “advanced” technology to analyze medical records and find unsupported diagnoses, and to expand its staff of medical coders.
These audits hold potential dangers for home-based care providers.
“Anytime MA organizations have their revenues reduced, they look for ways to reduce their outlays,” Nicole Fallon, vice president of integrated services and managed care policy at LeadingAge, previously told HHCN. “The reality is that MA plans adjust to the financial environment, so it is possible that plans may scale back the number of [options] they offer, reduce the number and magnitude of supplemental benefits, and seek to reduce provider payments further, especially if the audits find significant upcoding.”
Washington, D.C.-based LeadingAge is an association of more than 5,000 nonprofit aging services providers and organizations.
The consequence of slim MA rates that I have my eye on most – especially as audits increase – is their impact on nonprofit organizations.
Nonprofit home health providers already generally operate with low margins and provide care to patients who may not otherwise get it. With MA rates at times not even covering the cost of the visit, much less any overhead, these providers and their patients may particularly struggle if rates drop any lower.
Fallon said that, while the audits could cause MA plans to deprioritize home-based care, they are still necessary to preserve the Medicare Trust Fund. Still, she called for CMS to make a similar investment in ensuring companies are following prior authorization rules and not keeping Medicare beneficiaries from receiving necessary care.
While Fallon’s wish for increased attention to prior authorizations came true when a group of about 50 health insurance plans announced that they worked with CMS to pledge to reduce prior authorizations, I believe it very much remains to be seen whether the improvements that Fallon spoke about actually come to pass as a result of this pledge.
Prior authorizations
Oz’s approach to limiting prior authorizations reminds me of Health and Human Services Secretary Robert F. Kennedy Jr.’s approach to phasing out synthetic food dyes, in which the Food and Drug Administration “asked” food companies to substitute synthetic dyes with natural ones.
As someone who is allergic to red dye 40, I probably should be thrilled that the government is in any way encouraging food companies to scale back these dyes.
The rub for me is that the situation seems so tenuous. Kennedy in no way convinced me that any change would be widespread or permanent when he said that he and the food companies “don’t have an agreement, we have an understanding.”
Some companies have taken action, including Kraft Heinz, though the company said that 90% of its U.S. products are already free from synthetic dyes (Kraft Mac & Cheese has been dyed using spices, including turmeric, for over a decade).
Oz’s prior authorization agreement smacks of a similar, less-than-ironclad flavor.
CMS boasted that Oz secured a “pledge” for “voluntary actions” to reduce prior authorizations. I truly hope that the health plans that agreed to speed up and limit prior authorizations hold true to their word – but we have no guarantee. I’m also keen to see the level to which CMS updates the public on progress regarding prior authorizations. The pledge from the health plans does include an element related to increasing transparency to consumers, but without government oversight and accountability, this could be a relatively empty promise.
It may also be duplicative. Fallon previously told HHCN that many of the health plans’ promises align with existing requirements or those already planned for implementation.
On top of that, they fail to specifically address the home-based care community.
“We hope these efforts will extend meaningfully to post-acute care settings – particularly skilled nursing facilities (SNFs) and home health agencies – where delays and denials are most frequent and often most harmful,” Fallon said. “Patients leaving the hospital for post-acute care face some of the highest rates of denied or delayed authorizations. So far, the announcements from insurers have not addressed prior authorization practices in these settings, nor have they acknowledged the burden of ongoing concurrent review requirements.”
Between CMS’ plan to ramp up MA audits, which could further erode already-too-thin home health margins, and its underwhelming pledge to reduce prior authorizations, I worry that the agency’s promises not only fall short of addressing the home-based care industry’s challenges but may actually make them worse.
I hope that I’m being too cynical about the health plans’ follow-through on the pledge, and that I start to hear from at-home care providers about improvements related to prior authorization challenges. And there have been recent moments in which I’ve been more hopeful about the potential for CMS support of home-based care.
For instance, Oz has paid special attention to home- and community-based services. He visited America’s first Program of All-Inclusive Care for the Elderly (PACE) program, On Lok in San Francisco, in May.
“It’s a different way of thinking about how you can age in America,” Oz said during the visit, according to LeadingAge.
Such a visit could signal increased attention to in-home care and, hopefully, increased action to expand on promising models as well as steps to protect providers from some of the financial and administrative challenges that have increased with the growth of managed care.
