Insights^

Good morning and welcome from Washington, DC where Members of Congress return to work this week to face a few weeks of varying agendas depending on whether they sit in the Senate or the House. We hope our readers enjoyed a restful week and are back energized and ready to go!  Your author was able to avoid any travel this past week but unfortunately experienced his first taste of Disney princess fatigue, as I took my young daughter to see the movie Wish.  As the movie has a nice premise of free will and establishing one’s own destiny while not falling victim to a charismatic and selfish leader, I was reminded at times, however, it is good to have a collective group think – and we can only aspire that Congress exhibit this ethos to work together this month to avoid a government shutdown come January 19^th.  Now that the holiday meals have settled, it is time to get to work!  Welcome to the Week Ahead!

The Administration

The Biden administration is moving forward to work with the Senate on its supplemental funding strategy which includes funding for Ukraine, Taiwan, and Israel.  The administration sees this as imperative to remaining a trusted leader on the world stage with America’s allies and must work this week to make it happen.  Timing is of the essence as only a few weeks remain until the end of the legislative calendar for 2023.  The deal will basically hinge on border security measure and asylum policies to address migrant issues at our shared border with Mexico.

It was announced this weekend that President Biden will not be attending the upcoming United Nations Climate Summit known as COP28.  The President attended the summit over past two years, but the ongoing war between Israel and Hamas has taken much of the President’s time, as he continues to pursue a ceasefire and the release of hostages.  John Kerry, President Biden’s special envoy for climate change will attend the summit in his place.

The Senate

Majority Leader Chuck Schumer issued a Dear Colleague letter outlining the Senate’s ambitious agenda for the remainder of the calendar year.  The Senate will aim to tackle a variety of challenging policy areas to include leading with President Biden’s supplemental funding request as early as next week.  Several Senate offices have stated that a deal must be worked out this week to successfully place the request on the Senate floor during the week of December 4^th.  Again, any funding request would most likely be paired with border policy changes.  Senate Democrats realize that some policy changes are required to get a deal completed in time.  In addition to the funding request, the Senate will work with the House on the first set of appropriations bills to keep the government funded past the January 19^th deadline.  The Senate will also look to pass the NDAA, confirm further judicial nominations, and work to overcome the legislative blockade of Senator Tuberville on military promotions.  With all that is happening on the national stage this month, what passes with regards to health care remains to be seen.

The House

As the House shifts focus to holiday parties and fundraisers, there is still plenty of drama remaining in the lower chamber.  With the potential ousting of Rep. George Santos, it will be interesting to see who else retires and how the battle for the House heats up.  Since Speaker Johnson cut a deal on the budget, it is holiday season around Washington D.C.!!! Christmas and holiday parties begin this week with a slew of fundraising before the final quarter of this year’s fundraising cycle. Congress has punted the budget to next year, and the town will feel the pressure start to cook once they get back from break.

The House will need to work with the Senate to come to a consensus before recess on the President’s supplemental request. This will be quite tricky as the House has already passed Israeli aide with a pay-for. The House may adjourn by December 8^th, pending an agreement with the Senate on this request.

With Congress coming back from the Thanksgiving break, we expect a light week in Washington with few hearings and a focus on legislation largely related to issues other than health care. That said, the House Energy and Commerce Committee will hold two separate health-related topics. First, on Wednesday, the E&C Health Subcommittee will hold a hearing titled “Understanding How AI is Changing Health Care,” which is expected to be a broad hearing covering the potential and concerns surrounding AI in health care delivery. On Thursday, the E&C Subcommittee on Oversight and Investigations hearing will hold a hearing titled “Unmasking Challenges CDC Faces in Rebuilding Public Trust Amid Respiratory Illness Season,” where the Subcommittee will hear from Mandy Cohen, M.D., Director, Centers for Disease Control and Prevention and is expected to pursue questioning regarding the origins of COVID-19 and communications during the pandemic.

Also, with the passage of the continuing resolution to fund the government into next year, Congress also extended several health programs and provided protections from potential cuts into January as well. By taking action to prevent pending cuts under the Medicaid Disproportionate Share Hospital (DSH) program, extending the Work Geographic Practice Cost Index floor, and providing an extension of the Teaching Health Center Graduate Medical Education (THC GME), Community Health Centers (CHCs), and National Health Service Corps (NHSC) programs to January 19, Congress effectively punted on addressing larger health-related legislation until at least January—if not later in 2024.

In addition to pushing off the likelihood of any action on legislation targeted at pharmacy benefit managers, mental health or opioids, the extensions of these programs into January also means that Congress is unlikely to take any action to address a scheduled cut of 3.4% in Medicare payments to physicians that is set to take effect on January 1 as well. Readers may recall that in late 2022, Congress passed legislation to provide relief from projected physician payment cuts in 2023 and 2024. While the Senate Finance Committee included a provision to mitigate the cuts in the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act, which it cleared earlier this month, the House seems to have little appetite to provide additional relief to physicians in Medicare and the 3.4% cut is likely to take effect in January.

Create a great week!

Greetings from Washington,  

While temperatures are dropping here in D.C., the Administration and some members of Congress are doing their best to heat it right back up by putting Medicare Advantage (MA) plans on blast. However, the Medicare Payment Advisory Commission (MedPAC) must’ve thought those changes weren’t enough as they thoroughly fanned the flames during their meeting earlier this month. 

MedPAC & MACPAC 

During the second day of its November Meeting, MedPAC held two sessions related to MA. During these sessions, MedPAC staff shared findings that show MA payments being consistently higher than expected because of coding and favorable selection. Specifically, in September, MedPAC estimated that coding differences alone led to more than eight percent higher MA plans than fee-for-service (FFS) plans in 2021, even after accounting for CMS’s 5.9 percent adjustment. In June, MedPAC estimated that favorable selection alone led to eleven percent higher payments than FFS in 2019. MedPAC staff also shared that a large collection of research points to MA plans experiencing favorable selection, both indirectly and directly.  

Furthermore, staff shared updates they made to the analysis from the 2023 MedPAC June Report to Congress. Two of these updates increased the selection effect by less than one percent and one of them decreased the selection effect by two to three percent. The estimated cumulative selection effect in this analysis went from 5.9 percent in 2017 to 12.8 percent in 2021. Based on this analysis, MedPAC staff estimates the combined effects of selection and coding to have caused $50.8 billion in increased payments to MA Plans in 2021. MedPAC plans to continue looking at the effects of selection into MA and will include estimates in the annual March MA status report. When it comes to networks in MA, MedPAC staff has found that choice of provider is important for beneficiaries and that many beneficiaries are willing to trade choice for reduced cost sharing, out-of-pocket spending caps, and additional benefits. When it comes to prior authorization in MA plans, MedPAC has found most MA PA determinations and reconsiderations were eventually approved.  

Commissioners raised many concerns about the Advantage plans including how plans are reimbursed, how the plans use rebates they are issued, and how CMS ensures network directories are accurate. They also expressed concerns about the potential barriers to care and burdens to providers caused by prior authorization requirements. 

Likewise, the November meeting of the Medicaid and CHIP Payment and Access Commission (MACPAC) included a session on the use of State Medicaid agency contracts (SMACs). MACPAC staff concluded that states are using contracted strategies in their SMACs to improve integration with varying frequency. Additionally, they found certain provisions are more widely used while others had relatively limited use. As for next steps, MACPAC will start conducting interviews with state and federal officials and health plans representatives to explore challenges to optimizing SMACs.  

Overall, commissioners were disappointed with the use of SMACs. Chair, Melanie Bella, MBA, underscored a gap exists between what they might see on paper and how these tools are used to ensure everyone who needs it, has access to integrated care. Commissioners expressed a desire to see researchers investigate what prevents states that have D-SNPs and SMACs from effectively using SMACs. MACPAC staff said they could look into this subject.  

On The Hill  

Democratic leaders on the Energy and Commerce Committee have called for increased oversight of the MA program. On the Senate side, Finance Committee Chair Ron Wyden (D-OR) held a hearing on MA marketing and enrollment practices and has commented on the need to address some of those practices.   

CMS Proposed Rule 

The Centers for Medicare and Medicaid Services (CMS) tried to stabilize the climate and keep our lawmakers’ heads cool by publishing a proposed rule to revise the MA program. They outline this ruling in a 2,500-word fact sheet, but we’ll try to give you all an overview in fewer words. Regarding broker/agent compensation, this rule would change the cap so it combines the additional fees at a flat rate (the new cap would be $632/beneficiary instead of $601/beneficiary). The rule would also require plans to provide enrollees with a mid-year notification about supplemental benefits to ensure they are taking advantage of the benefits. CMS also decided to address concerns about the use of prior authorization within MA. To improve the experiences and outcomes for dually eligible individuals the proposed rule would increase the frequency of special enrollment periods for enrollees eligible for both Medicare and Medicaid. And lastly, the ruling would limit out-of-network cost-sharing for dual eligible special needs plans (D-SNP) preferred provider organizations (PPOs) beginning in 2026. 

In accordance with federal law, this proposed rule will be published and subject to a public comment period. To ensure consideration, comments must be submitted by no later than 5 PM on January 5, 2024. 

Between the Administration, Congress, MedPAC, and MACPAC, it seems as though everyone has been trying to cook over the fire that are Medicare Advantage plans. We expect the oversight to continue, and you can be sure we will be watching the thermometer to ensure our clients’ voices are heard in Washington.