The head of the Medicare program detailed concerns about how Medicare Advantage (MA) was spending its dollars but said there are limits to what the Centers for Medicare & Medicaid Services (CMS) can do to rein in the popular program.
CMS Administrator Chiquita Brooks-LaSure detailed what areas of MA she wants to take a longer look at during the Milken Institute’s healthcare summit in Washington, D.C., on Thursday. Her remarks come as criticisms over the MA program have intensified amid complaints surrounding aggressive marketing and higher spending compared to traditional fee-for-service Medicare.
“One thing that we continue to want to focus on is making sure that our dollars are being used well,” she said.
Brooks-LaSure noted that the agency wants to make sure Medicare beneficiaries understand the extra benefits MA plans offer and that those benefits are being used. Open enrollment for 2023 Medicare coverage ended Wednesday.
But the administrator hedged on the issue of whether Medicare is overspending on plans. The Medicare Payment Advisory Commission, which advises Congress on Medicare issues, has raised concerns that plans are trying to game CMS’ risk adjustment practices to make patients appear sicker than they actually are in order to get higher payments.
When asked whether she was concerned about whether plans are overcharging the government, Brooks-LaSure said “looking at Medicare spending is always an issue. I think that it is certainly a priority for us to make sure the trust funds have enough to make sure that Medicare remains the promise that it needs to be.”
She added the concern is making sure MA is meeting its statutory requirements.
“Congress decides exactly the payments,” Brooks-LaSure said. “We do see some differences between fee-for-service and Medicare Advantage.”
When it comes to whether "they’re getting overpaid, that is more about to me what are our statutory requirements,” she added.
CMS did recently issue a request for information on how to improve the MA program. It also sent out guidance in the fall to remind MA plans of their requirements surrounding marketing in response to an uptick in complaints from consumers. The guidance said that starting next year, CMS will approve any MA television spot before it airs and reminded plans they are responsible for the actions of any third parties like brokers or agents.
MA has become an increasingly lucrative market for insurers, as some major plans like Humana worked to expand their benefit offerings for 2023.
Implementing drug price negotiations
Brooks-LaSure also gave an update on the agency’s efforts to implement a key part of the Inflation Reduction Act: drug price negotiation authority for Medicare.
The law that passed earlier this year for the first time will enable Medicare to negotiate for lower prices on a small subset of drugs. It included other key drug price reforms such as a cap on catastrophic Part D drug spending and a $35 monthly cap for insulin costs.
“I get asked a lot of questions as CMS administrator, but prescription drug costs are one the [issues] I hear about the most,” she said. “This legislation is life-changing for people.”
Brooks-LaSure said the agency is currently staffing up to ensure it is ready to install the negotiation authority that takes effect in 2026.
Now, though, the agency is not contracting with other groups such as the Institute for Clinical and Economic Review, which analyzes the effectiveness of drugs to determine a fair price.
“That is not on my radar,” she said.