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CMS Administrator Verma Champions MA at AHIP Conference

CMS Administrator Verma Champions MA At AHIP Conference

Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma spoke to attendees at the AHIP Medicare, Medicaid & Duals Conference Tuesday and signaled the administration’s ongoing support for the Medicare Advantage (MA) and Part D programs. She made it clear that the support is very much tied to the private delivery of healthcare and the innovation she believes private plans have brought and will bring over time.

Verma noted that almost 23 million senior and disabled Americans, about 37 percent, will choose Medicare Advantage in 2019. Various estimates have MA penetration reaching 50 percent by 2025 if not sooner. Verma cites the following as reasons for the meteoric rise in MA enrollment, seeing it as “basic economics”:

  • The value for beneficiaries and taxpayers – Plans offer far more benefits in the form of reduced cost-sharing and supplemental benefits than does the traditional Medicare fee-for-service (FFS) program. The MA program also serves as a vital safety net for lower income seniors as there are discrete caps on out of pocket costs not seen in the FFS program. MA premiums are down 6 percent, with standalone Part D premiums down once again as well.
  • The cost to beneficiaries and taxpayers – With the reining in of MA rates nationwide through the Affordable Care Act (ACA), MA plans are now more cost effective than FFS overall. As Verma notes, plans compete with each other on the basis of cost (premiums), additional benefits (leveraging their overall efficiency against FFS to free up dollars for better services) and quality (the best performers keep more money of the total rate to give in the form of even more benefits).
  • A myriad of choices – Verma notes that there are 600 new plan choices alone nationwide. In most areas of the nation, vigorous competition exists.

Verma committed to further modernizing MA and cited the following that will help boost the program’s growth:

  • Removal this year of the stringent “meaningful difference” provision between plan benefit packages. While this originally was put in to reduce member confusion, the provision would impede new benefit models emerging in the future.
  • In 2019, plans now can cover non-traditional services as supplemental benefits, such as in-home visits. While this was introduced late in 2018, some 270 MA plans are already offering such services.
  • Additional innovation from the innovation center as well as with the value-based insurance design pilot (VBID). VBID will be in 50 percent of all states in 2019. A companion provision that allows plans to vary services and benefits within plans based on disease conditions was also introduced this year.

Verma recognized that high drug costs are hurting Medicare’s affordability and increasing its costs. She noted several ways the administration was helping and promised further action:

  • Step therapy for Part B drugs
  • Pursuing greater use of generics and biosimilars
  • A new rule in drug price transparency in TV ads

While not noted, formularies at the indication level rather than drug level can now be practiced in Part D.

While Verma did use part of her speech to attack the concept of Medicare for All as an unaffordable distraction that could sink Medicare for seniors and the disabled, she did conclude by arguing that private sector innovation is the key to moving to a value-based system. She inventoried the gross inefficiencies of the misaligned FFS system (FWA, lack of prior authorization, a cost-based reimbursement system, etc.) that are barriers to innovation. She concluded that MA private plans can help on the innovation front. She put in a strong plug for consumerism, information-sharing controlled by the patient as well as provider incentive programs that reward true outcomes (as opposed to placing yet additional burdens).

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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