HHS Suggests More Changes to Medicare and Medicaid Services

The Department of Health and Human Services (HHS) issued an informal proposal that would launch several new pilot programs in the coming months – many of which would increase costs to Medicare beneficiaries and jeopardize the future of the Medicare program, according to a report from STAT News.

The proposed programs and policy changes would affect the Centers for Medicare and Medicaid Innovation (CMMI), which funds the development and testing of new payment and service-delivery models that will help reduce costs and improve the quality of Medicare services. The CMMI has an annual budget of about $1 billion for these types of initiatives, and HHS may be able to use CMMI funds to institute several new programs as part of the Republican “A Better Way” health-care plan.

The informal proposal outlines support for “private contracting,” in which doctors who think Medicare’s prices are too low can contract directly with beneficiaries to charge them higher prices for services. The practice is legal but is rarely used, and doctors who engage in it are barred from accepting certain Medicare payments for two years. However, HHS may be able to use CMMI’s authority to waive this restriction, making it more attractive for doctors to engage in private contracting.

The new proposal also includes language suggesting that HHS wants to encourage Medicare beneficiaries to enroll in private Medicare Advantage plans when they are less expensive than traditional Medicare plans. While Republicans argue that this change would reduce federal spending on Medicare and encourage competition among private insurance plans, Democrats and consumer advocates are wary of the differences between private and traditional Medicare plans that may end up costing patients more money in out-of-network penalties.

Many of the proposed changes would advance the Republicans’ “A Better Way” health-care plan and would negatively affect patients who rely on Medicare and Medicaid services, according to Democrats. “Beginning down this treacherous path is a clear sign that [HHS] Secretary Price is betraying Donald Trump’s campaign promise not to touch Medicare or Medicaid and instead pursue his ideological goals at the expense of vulnerable Americans,” Senator Ron Wyden (OR-D), the top Democrat on the Senate Finance Committee, which has jurisdiction over Medicare, said in statement.

Other experts in Medicare policy are concerned that the informal proposal does not meet CMMI requirements for new models to either save money and maintain the same or better level of care quality, or keep spending neutral and improve quality. “It’s hard for me to see how private contracting or premium support fits that,” said Stacy Sanders, federal policy director at the Medicare Rights Center. “That would obviously be something that CMS would have to prove before they could move forward with a model.”

The proposal is open for comments from hospitals, doctors, and other health-care stakeholders until November 20, 2017.

Source: STAT News, September 21, 2017.