Patients drawn to Medicare Advantage benefits, but higher costs, data issues remain
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Sources of Healio | Nephrology News & Issues have made it clear that the explosive growth in the number of patients with end-stage kidney disease that join Medicare Advantage plans has overwhelmed everyone — payers and providers alike.
Photo courtesy of Eugene Lin, MD, MS, FASN.
“Medicare Advantage is probably flying under the radar with respect to kidney disease, but in my opinion, it [is] probably the most impactful policy that [is] going to affect, and is affecting, kidney disease,” Eugene Lin, MD, MS, FASN, an assistant professor of medicine at the Keck School of Medicine at the University of Southern California, and an associate editor for Healio | Nephrology News & Issues, said. “ ... It [is] critically important that both providers and patients are educated and understand what Medicare Advantage is.”
Lin listed the pros and cons for patients with ESKD interested in moving from traditional Medicare to a Medicare Advantage (MA) plan: improved access to some types of health care; lower cost for drugs and increased health benefits, such as vision and dental coverage — all without requiring Medigap coverage.
But patients may also have access issues to specialists due to narrow networks, and MA plans can require prior authorizations, which help control costs. “MA plans can dilute the efficacy of value-based care,” Lin said. “Many of CMS’ payment models focus exclusively on [fee-for-service] FFS Medicare.”
Plan growth
While MA plans have been available since 2003 with the passage of the Medicare Prescription Drug, Improvement and Modernization Act, only patients diagnosed with ESKD and already in an MA plan could participate. Congress approved the 21st Century Cures Act in 2021, which focused on streamlined FDA approval of drugs/devices, authorized new NIH funding and targeted development of drugs for rare diseases. It also included a provision that allowed patients to enroll in a MA plan regardless of when they were diagnosed with ESKD.
That has led to a steady increase in patients switching from traditional Medicare plans to MA plans. “Results suggest that increases in MA enrollment among Medicare beneficiaries with [end-stage renal disease] ESRD were substantial the first year after the 21st Century Cures Act, particularly among Black, Hispanic and dual-eligible individuals,” Kevin H. Nguyen, PhD, of the department of health, law, policy and management at Boston University School of Public Health, and colleagues wrote in the Journal of the American Medical Association. In the review of 575,797 Medicare beneficiaries diagnosed with ESKD in 2020 or 2021, “the proportion of beneficiaries enrolled in MA increased from 24.8% (December 2020) to 37.4% (December 2021), a relative change of 50.8%.”
Nationwide, the authors wrote, there was a 51% increase in MA enrollment among beneficiaries with ESKD, “exceeding CMS projections of approximately 30% in 2021,” the authors wrote. “Our study builds on these estimates by showing that there were disproportionately higher enrollment increases in MA among ESRD beneficiaries who were Black, were Hispanic and had low income,” they wrote.
Cost to Medicare
Patients enrolled in traditional Medicare plans are encouraged to buy supplemental Medigap plans to cover medical bills as Medicare only pays 80% of charges by dialysis providers. “In [traditional] Medicare, dialysis is extraordinarily expensive, and patients are obligated to pay out of pocket 20% of that expense,” Lin said. “That all adds up, and Medicare Advantage plans, for a lot of patients, can be better from a financial perspective.”
However, those added benefits offered by MA plans are costly to the Medicare program. In a March 2024 report to Congress by the Medicare Payment Advisory Commission, the commissioners wrote: “Medicare spends an estimated 22% more for MA enrollees than it would spend if those beneficiaries were enrolled in FFS Medicare, a difference that translates into a projected $83 billion in 2024.
“The commission acknowledges that a portion of these increased payments to MA plans are used to provide more generous supplemental benefits and better financial protection for MA enrollees. Nevertheless, the commission is concerned that the relatively higher payments to MA plans are subsidized by the taxpayers and beneficiaries who fund the program.”
Despite those higher payouts by Medicare, “currently there is no reliable information about the extent to which beneficiaries use these benefits,” the commissioners wrote.
The report calls for Congress to overhaul the MA program, noting “beneficiaries lack meaningful quality information when choosing among MA plans” and “Medicare is paying more for MA than for comparable beneficiaries in FFS Medicare ... the disparity between MA and FFS payment disadvantages beneficiaries who — for medical reasons or personal preferences — do not want to enroll in MA plans that use tools like provider networks or utilization management policies and instead want to remain in FFS (which includes care provided through alternative payment models).” The commissioners also cited “the lack of information about the use and value of many MA supplemental benefits,” preventing “meaningful oversight of the program such that we cannot ensure that enrollees are getting value from those benefits.”
The American Society of Nephrology has also expressed concerns about the lack of data from MA plans, particularly for use by the U.S. Renal Data System (USRDS) for analysis in its annual reports. Missing MA data “could undermine the rich kidney data sets flowing to and from USRDS,” Deidra C. Crews, MD, ScM, FASN, ASN president, wrote in a letter in May to CMS Administrator Chiquita Brooks-LaSure. “ASN understands that MA data is now flowing to USRDS, but it is our understanding that data now has a [3]-year delay reaching USRDS, which negatively impacts research and policy planning.
“ASN strongly urges the [HHS] to expand the purview of the USRDS contract to include data collected on patients enrolled in MA, ensuring timely access to robust data for the USRDS,” Crews wrote.
Crews said ASN is also concerned about how MA plans report the outcomes of prior authorizations.
“Although CMS has proposed several regulatory changes to address concerns about the use of prior authorization by MA plans, ASN remains deeply concerned that some MA plans have implanted prior authorization requirements for receiving dialysis services,” Crews wrote. “Currently, MA insurers are not required to report prior authorization requests, denials and appeals by types of service, for specific plan within a contract, or reasons for authorization denials.
“The lack of transparency and consistency in prior authorization process due to uncollected data can exacerbate the burden on ESRD patients and their caregivers, who already navigate a complex health care system while managing a complex chronic condition.” Crews wrote.
In a summary of its 2023 annual data report, the USRDS acknowledged the difficulty of using data from MA plans. “ ... MA data lag FFS claims data by an additional year because of additional required processing time. Thus, it is only this year that data are available to begin to show (very) short-term trends (2019-2020) in the MA population,” the USRDS wrote.
Costs and dialysis providers
In an article authored by Lin and colleagues in Health Affairs, the researchers reviewed payments made by MA plans to dialysis providers, concluding that for an in-network hemodialysis treatment, “MA paid a significantly higher markup to large dialysis organizations (131% of the fee-for-service Medicare price) than to regional chains (120% of the fee-for-service Medicare price), independently owned facilities (112% of the fee-for-service Medicare price), and hospital-based facilities (98% of the fee-for-service Medicare price) (P < .0001 for all comparisons with large dialysis organizations),” they wrote.
“For three large insurers representing 48% of the 2016-[2017] MA market, we found that MA plans paid 27% more than fee-for-service Medicare. Larger dialysis center chains commanded higher markups,” the authors wrote. “Virtually all facilities of the two largest chains were in network, suggesting that they leverage their market power into all-or-nothing negotiations with plans.”
The findings by Lin and colleagues also showed that the largest dialysis organizations showed that dialysis treatments were performed in-network, but these also negotiated higher markups than other facilities. “We observed little to no regional variation in large dialysis organization markups, even in areas where the organizations had less market power and irrespective of the county’s median income level,” Lin and colleagues wrote. “This finding is consistent with the hypothesis that the large dialysis organizations negotiate with MA plans on a national ‘all-or-nothing’ basis, requiring MA plans to include all of an organization’s facilities in an MA plan network, even in highly competitive markets.
“Prohibiting all-or-nothing contracting could alleviate these concerns and has precedent,” the authors wrote. “Our study found that the largest MA plans pay large markups for dialysis, especially to large dialysis organizations. Inflated dialysis payments also could increase patients’ out-of-pocket spending for dialysis,” they concluded.
Lin told Healio | Nephrology News & Issues that the contracts between large dialysis chains and MA plans make it hard for small and independent dialysis providers to compete. “The difficulty is if you are a small in-network provider for an MA plan. It is plausible to me that some of these providers are getting paid less than FFS. That is because there is no regulatory floor on the price. However, in this world, most providers should decide to go [out of network] because they will get the FFS price going out of network. Even though they are out of network, the MA plan is still obligated to pay 80% of the FFS price,” he said.
In another study done by Jeffrey Marr, MA, and colleagues at the department of health policy and management at the Johns Hopkins Bloomberg School of Public Health, research showed that “MA enrollees with ESKD were more likely than [traditional Medicare] enrollees in the same ZIP code to use the dialysis facilities owned by the two largest chains, travel further for care, and receive care at lower quality facilities.
“While the magnitude of differences in facility distance and quality was modest, the direction of these results underscores the importance of monitoring dialysis network adequacy as ESKD MA enrollment continues to grow,” the researchers wrote.
Lin said more research needs to be done on whether MA plans offer long-term benefits to patients with ESKD. “MA plans will soon be the plurality payer for dialysis,” he said during a recent presentation at the National Kidney Foundation Spring Clinical Meetings. “Patients and providers need to understand the pros/cons of MA. More research needs to be conducted to understand the impact of MA on the ESRD population as well as on ESRD policies.”
- References:
- Crews D. CMS-4207-NC Medicare Program; Request for information on Medicare Advantage data. Letter to Chiquita Brooks-LaSure, Administrator, CMS. American Society of Nephrology. May 29, 2024.
- Lin E, et al. Health Affairs. 2024;doi:10.1377/hlthaff.2021.02009.
- March 2024 Report to the Congress: Medicare payment policy. https://www.medpac.gov/document/march-2024-report-to-the-congress-medicare-payment-policy/. Published March 15, 2024. Accessed Aug. 26, 2024.
- Marr J, et al. Health Serv Res. 2023; doi:10.1111/1475-6773.14153.
- Nguyen KH, et al. JAMA. 2023;doi:10.1001/jama.2023.1426.
- United States Renal Data System. 2023 USRDS Annual Data Report: Epidemiology of kidney disease in the United States. NIH, National Institute of Diabetes and Digestive and Kidney Diseases, Bethesda, MD, 2023. https://usrds-adr.niddk.nih.gov/2023/introduction. Accessed Aug. 27, 2024.
- For more information:
- Eugene Lin, MD, MS, FASN, can be reached at eugene.lin@med.usc.edu.
- Diedra C. Crews, MD, ScM, FASN, can be reached at dwhite@asn-online.org.
- Kevin H. Nguyen, PhD, can be reached at nguyen@bu.edu.
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