Health Policy

MA for Tomorrow: Moving Beyond the Status Quo to Advance Concrete Policy Changes for the Future of Medicare Advantage


Medicare Advantage (MA) has passed the tipping point, delivering coverage and care to more than half of the senior population in the US. The Congressional Budget Office projects more than 60 percent of people 65 years and older will be in the program by 2030. As enrollment soars and interest in value-based health care grows, it is imperative policymakers modernize the program that is expected to cost $7.5 trillion over the next decade.

Rather than taking the standard Washington posture of declaring victory or defending the status quo, our provider-aligned, nonprofit member plans spent nearly two years developing a detailed vision for MA for Tomorrow. The policy proposals being released at a Capitol Hill briefing on June 12 are concrete reforms from executives with decades of experience and a track record of achieving the highest quality ratings in the program.

MA for Tomorrow is built on five pillars: (1) Raising the Bar on Quality; (2) Improving Consumer Navigation; (3) Achieving Risk Adjustment for Care, not Codes; (4) Modernizing Network Composition; and (5) Transforming Benchmarks. Taken together, the policies foster greater competition, reduce provider burden, push quality standards higher, enhance the shopping experience and curb improper payments.

With consistently high-quality ratings, expanded benefits and a proven ability to reach minority populations, the MA public-private partnership is an undeniable success. More than 31 million seniors are enrolled in MA, a growth of over 107 percent since 2014. In the past five years, as seniors voted with their feet, MA grew by 9.1 million enrollees while fee-for-service Medicare shrunk by 5.1 million. 

But even the most successful programs must evolve. To serve current and future retirees, MA must keep pace with medical and technological advances; it must improve the shopping experience to match other retail sectors; it must address loopholes and bad behaviors that dampen competition and choice. While fundamentals of the program remain strong, change is necessary to ensure the MA program of the future is equitable, affordable and focused on health outcomes.

Raising the Bar on Quality to Address the Lake Wobegon of Stars 

MA is the only government program that measures and rewards high-quality care. ACHP is proud to have played a major role in creating the original 5-scale quality ratings program.  While groundbreaking when it was introduced in 2012, the star ratings today resembles Lake Wobegon. Most plans get a trophy in the form of 4 or 5 stars, diluting the distinction of truly superior performance.

Even worse, the most aggressive risk-adjusters have discovered it is easier to code their way to revenue than achieve it through quality, which means that a 3.5-star plan can collect more federal dollars than a 5-star plan, according to data from the independent Medicare Payment Advisory Commission, or MedPAC.

For too long, MA has relied on process measures as a quality indicator rather than health outcomes and patient satisfaction. Created as the initial baby steps in the stars program, process measures focus on simply checking the box. As a result, a system intended to drive meaningful competition and reward the highest quality has been watered down by easy to achieve process measures, resulting in nearly 75 percent of MA consumers in a plan with 4 or more stars.

Raising the quality bar requires using the right survey tools. The predominant means of collecting data to measure quality today do not fully or accurately capture the senior population, often excluding consumers with limited technological access, people of color and consumers with English as a second language. Effectively evaluating quality begins with having tools to collect information accurately and comprehensively, increasing response rates and accounting for cultural, geographic and health equity differences. 

To push performance higher and emphasize health, ACHP and its member companies propose to eliminate 10 outdated process measures that are poorly designed or have clustered rates of performance at the top of the measure. For example, we propose eliminating the price accuracy process measure which evaluates information posted on Medicare Plan Finder. In 2023, the average performance was above 90 percent and the difference between achieving three stars and five-stars on that measure was just six percentage points. This is not a meaningful measure for quality ratings. In contrast, we propose maintaining the breast and colorectal cancer screening measures that drive early detection and treatment, particularly in underserved communities. In place of the topped-out process measures would be quality metrics that focus on patient experience and health outcomes. 

Finally, MA for Tomorrow raises the quality bar by limiting the number of plans that can achieve a 4-star or above rating. The MA quality bonus would remain in place but would be rewarded to a smaller number of high achievers, reducing the amount of quality bonus dollars and saving taxpayer dollars. All told, health plans would have multiple incentives to strive for a higher rating, driving more competition on what really matters and greater value for seniors and taxpayers. 

Improving Consumer Navigation to Protect Seniors

Seniors deserve unbiased, actionable and easy-to-navigate information to make informed decisions about their coverage and care. That can be challenging when the average consumer has 44 health plan options to choose from. Further exacerbating the already complicated enrollment process, the Senate Finance Committee found substantial evidence of misleading marketing by third-party marketing organizations and lead generation firms. The committee documented repeated instances of seniors being presented with false, incorrect and misleading information and then being unknowingly disenrolled from their selected health plan. In one example, a senior was involuntarily disenrolled four times from their chosen health plan within one enrollment period.  

In the 2024 MA and Part D rule, CMS established guardrails on marketing and advertising practices to crack down on the most egregious abuses. CMS must implement these new guardrails with strong enforcement. And further action is needed to directly regulate third-party marketing organizations and lead generation firms which are outside the jurisdiction of CMS. 

To build on the initial CMS actions, MA for Tomorrow establishes a cap on health plan payments to marketing organizations, provides a fast-track review process for 5-star MA plans and strengthens oversight and penalties for misleading and inaccurate marketing. These proposals will streamline and reduce the amount of marketing materials seniors receive and ensure that what they get is easy-to-understand and accurate. Further, health plans will be incentivized to deliver high-quality through a speedier review process that reduces their administrative burden.

For many seniors, brokers offer important assistance in understanding their health plan options and finding the best plan for their individual needs. Today, CMS limits broker commissions to approximately $600 per enrollee. But there are no caps on additional, rather creative, “administrative payments” for services such as marketing, compliance, IT or health risk assessments. Brokers can collect upwards of $1,300 per consumer, creating a misaligned incentive to steer seniors and unnecessarily increase administrative costs. Yet the program offers no such additional payment or incentives for brokers to promote quality or value-based care, a stated priority of policymakers.

MA for Tomorrow standardizes broker compensation and adds incentives for enrolling consumers in top-performing plans. Combined, the two policy reforms deter brokers from steering consumers to health plans that pay the most. Brokers will have appropriate incentives to help consumers identify the right health plan for their individual care and coverage needs. This will also protect the Medicare dollar, reducing administrative costs. 

Using Risk Adjustment for Care, Not Codes

Risk adjustment is designed to provide sufficient resources for health plans and providers to manage care effectively. Too often, however, for-profit MA plans or new entrants seek to maximize risk adjustment to drive financial goals. Coding is king; care becomes the afterthought. Used properly, risk adjustment should provide clinical teams the resources to address the unique clinical and social needs of a beneficiary. High-quality plans meeting consumers’ needs should be rewarded over plans that simply chase risk adjustment revenue. In today’s upside-down world of risk adjustment, however, aggressive coding delivers bigger payments to plans than top quality ratings, as evidenced in MedPAC’s March 2023 data.

The current risk adjustment model is calibrated using fee-for-service claims and does not account for differences in coding patterns between volume-based and value-based care.

MA for Tomorrow recalibrates the risk adjustment model to use MA encounter data, which documents a consumers’ diagnoses, treatments and services. The change would improve payment accuracy and mitigate the effects of overly aggressive coding. CMS has collected MA encounter data for more than a decade and has the authority to use this information to recalibrate its model. 

The Affordable Care Act requires CMS to apply a coding intensity adjustment to account for differential coding practices between traditional fee-for-service Medicare and MA. CMS currently applies a standard adjustment to all MA plans despite the significant variance in coding intensity by plan. As coding practices differ, so should the coding intensity adjustment. MA for Tomorrow applies different levels of coding intensity adjustments, tiering plans based on coding aggressiveness and targeting larger adjustments to plans significantly higher than the industry average. By tiering the coding adjustment, CMS will deter outliers, rein in aggressive coding practices and level the playing field in MA. 

Risk Adjustment Data Validation (RADV) audits serve as an important program integrity tool to recover improper overpayments and act as a deterrent to abuses. These audits are expensive and time consuming for regulators and health plans. Given the federal government’s limited time and resources, the audits must target health plans with a higher likelihood of coding abuses or an established pattern of outlier behavior. Under MA for Tomorrow, RADV audits will be targeted using criteria that focus on health plans with practices that differ widely from the industry average. Establishing clear RADV guidelines creates a more efficient, effective program that curtails bad actors and protects the taxpayer dollar. 

Modernizing Network Composition and Transforming Benchmarks

All consumers deserve access to a network of high-quality providers measured by standards that support competition and recognize care delivery innovation. Network adequacy requirements based on time and distance are simply outdated. A large and growing share of physical and mental care appointments are no longer completed through a traditional “office visit.” Virtual and team-based health care are game changers, allowing clinicians to work to the top of their license, partner with care teams for the patient and address workforce shortages, especially in rural and underserved areas. 

We live in a digital era and consumers expect nothing less than convenient, 24-7 access to health care. The COVID-19 pandemic demonstrated the value of creative ways of delivering care. MA for Tomorrow would establish contemporary network adequacy standards that recognize innovations in care delivery such as remote monitoring and reflect unique needs of populations and communities. Antiquated time and distance standards must be modernized for today’s consumers.

Benchmarks are the cornerstone of MA payments, establishing the maximum per beneficiary monthly payment that may be paid to a health plan to cover basic Medicare benefits. The benchmark methodology is based on average spending in traditional fee-for-service Medicare, adjusted by county. That formula is outdated now that a majority of Medicare eligible seniors are enrolled in MA. With MA enrollment continuing to surge and fee-for-service shrinking, it is time to revisit whether basing MA payment benchmarks solely on fee-for-service accurately forecasts the actual costs of delivering care to seniors in MA. 

MA for Tomorrow transforms benchmarks to reduce reliance on local fee-for-service costs and establish benchmarks that better reflect the changing Medicare enrollment composition and incorporates stronger incentives for delivering high-quality care. The fiscal sustainability of the MA program for seniors and taxpayers necessitates action. 

Ensuring a Better MA for Tomorrow 

ACHP and its nonprofit member companies are committed to engaging constructively with policymakers and other stakeholders on changes to MA that provide superior customer service, protect the taxpayer and Medicare Trust Fund, and improve health for the consumers and communities they serve. Tomorrow’s seniors deserve MA for Tomorrow

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Ceci Connolly is the President and CEO of Alliance of Community Health Plans. Michael Bagel is the Associate Vice President of Public Policy of Alliance of Community Health Plans.