Michael S. Adelberg (michael.adelberg@faegredrinker.com) is Principal at Faegre Drinker Consulting in Washington, DC, and Kristin B. Rodriguez (kristin.rodriguez@healthplanalliance.org) is Chief Operating Officer at Health Plan Alliance located in Dallas, TX.
Years from now we will remember this time period as the good old days of Medicare Advantage (MA). The program is growing rapidly, nearly 10% annually, and some prognosticators expect enrollment to reach 70% of Medicare beneficiaries by 2040.[1] Despite the rapid growth, member satisfaction is at a record high—94% per a recent survey.[2] Medicare beneficiaries choose managed care plans for the same reason that state governments and employers select managed care for Medicaid and employees respectively—managed care delivers more benefits and services for a fixed cost than unmanaged care. MA plans offer Medicare beneficiaries a compelling value proposition: lower total out-of-pocket costs, catastrophic protection, care coordination, and supplemental benefits unavailable in original Medicare. This value proposition is discussed favorably in Centers for Medicare & Medicaid Services (CMS) information channels: the “Medicare & You” handbook, medicare.gov, and 1-800-MEDICARE. Some consumer advocacy groups have accused CMS of pro-MA bias.[3]
Without question, the Trump administration policies have contributed to the growth of Medicare Advantage. In addition to greater annual payment updates than experienced during the Obama administration (e.g., 4.1% for Plan Year 2022),[4] a short list of Trump administration policy changes that facilitated growth in the MA program include:
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Benefits: CMS loosened longstanding uniformity and primarily health-related supplemental benefit rules[5] (recently codified in regulation)[6] and rolled out, per section 50322 of the Bipartisan Budget Act, additional special supplemental benefit flexibilities, as well as other benefit flexibilities under its multiyear value-based insurance design model.[7]
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Meaningful difference: CMS ended “meaningful difference” reviews, permitting MA plan sponsors to offer more plans within a given market.[8]
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Marketing: CMS loosened its marketing rules in a number of important ways, such as excluding “communications” materials from its marketing review process and permitting providers to support plan marketing in new ways.[9]
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Network adequacy: CMS eased provider network adequacy standards by clarifying network adequacy exceptions and introducing a network adequacy credit for telehealth providers.[10]
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Drugs: CMS introduced prior authorization for Part B drugs,[11] indications-based formulary flexibilities, and other formulary management flexibilities.[12]
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Telehealth: CMS permitted MA plan sponsors to consider telehealth Part B benefit rather than a supplemental benefit, making telehealth more affordable in plan bids.[13] It then introduced several new virtual health services flexibilities in response to the COVID-19 public health emergency.[14] (As the public health emergency had been extended to the end of January, it will fall to the new Biden administration to determine when these flexibilities might sunset.)
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CMS application and contract award: CMS moved provider network submission and network adequacy review for contract applications and, while maintaining the requirement for applicants to obtain a state license by February, without an explicit policy change, extended the window during which applicants can secure a state license from spring into early summer. CMS first removed provider network adequacy reviews from CMS’s 2019 “Part C -Medicare Advantage and 1876 Cost Plan Expansion Application.”[15] The application maintains provider network requirements for Special Needs Plan Models of Care.[16]
