| |  | The Lead Brief | If the Trump administration doesn’t roll back part of its proposed Medicare Advantage payment reforms, the industry warns that it would result in reduced payments to insurers by an average of $324 each year for each beneficiary compared to the current system. The projected reduction primarily comes from proposed changes to recalibrate how the Centers for Medicare and Medicaid Services adjusts payments based on how sick enrollees are. There are more than 35 million people enrolled in Medicare Advantage plans — putting the overall potential reduction in payments in the billions of dollars. → The data comes from a new report commissioned by Better Medicare Alliance, an insurer-backed group that lobbies for Medicare Advantage policies, and shared first with Health Brief. Insurers are trying to drive home the point that they’ll be forced to raise out-of-pocket maximums, cut benefits or exit markets entirely, leaving older Americans with higher costs or fewer options. And the subtext is that this would all happen when open enrollment begins in October — right before the midterm elections. The new report found that key battleground states, including Florida and Georgia, could experience the most dramatic cuts. Why it matters: The analysis, which comes from consulting firm BRG, will be a crucial part of the industry’s lobbying efforts as it pushes CMS for a payment boost and rollbacks to proposals to change how they calculate payments. The analysis doesn’t factor in the part of the administration’s proposal that would only include higher Medicare Advantage payments for conditions identified through chart reviews if the patients actually received care for those conditions, eliminating so-called “unlinked” chart reviews. READ MORE FROM WPI: WP Intelligence lead health analyst Rebecca Adams has written about the proposed changes to Medicare Advantage, including how major insurer UnitedHealth Group supports that part of the CMS proposal. The Trump administration has until April 6 to release its final Medicare Advantage payment updates, giving advocates plenty of runway. Patient groups, such as Families USA, have pushed back on insurers’ claims and argue the system is in need of reform. The analysis from BRG also looked at the impact of the effective growth rate, CMS’s yearly calculation of cost growth in traditional Medicare that drives Medicare Advantage payment benchmarks. CMS said it used an effective growth rate of 4.97 percent to come up with its proposed payment rate that’s ultimately flat compared to last year. Analysts had expected a higher number, in part due to the rise in health care spending. The analysis from BRG found that for every 1 percentage point swing in that growth rate, plan payments change by about $12 per member per month, or $144 per year. Critics argue that private plans are already overpaid for administering Medicare, urging the administration to move forward with the rates and reforms they’ve proposed. “The evidence shows that despite the overheated rhetoric of organized interest groups, further reforms will not lead to the demise of MA [Medicare Advantage] plans,” Mark Miller, the executive vice president of health care at Arnold Ventures, wrote to CMS in the organization’s comment letter about the proposed rates. Miller adds: “Since payment reductions in 2010 — that were criticized at the time as potentially catastrophic — MA enrollment has more than doubled, beneficiaries have greater choice in plans, rebates to plans that fund extra benefits and lower premiums and cost sharing reached historic highs, and plans are bidding more efficiently for contracts with the federal government.” → However, policy changes and a dip to insurers’ earnings have increasingly caused plans to leave unprofitable markets. This has resulted in Medicare Advantage beneficiaries having to find other options. Recent research published in JAMA showed that there has been an uptick in these “forced disenrollments” over the past couple of years. While President Donald Trump lambasted private insurers in Tuesday’s record-long State of the Union address to Congress in relation to the enhanced Affordable Care Act premium subsidies, the industry viewed a shout-out about protecting Medicare as a positive sign of things to come. “Under this administration,” Trump said during the speech, “we will always protect Social Security and Medicare.” Mary Beth Donohue, who leads the Better Medicare Alliance, said the finalized update from CMS should demonstrate Trump’s “commitment by ensuring payment policies that preserve stability and affordability for seniors.” Insurers have argued that CMS may be underestimating medical cost trends. If that’s the case, plans would face financial pressure equivalent to a payment cut, even if the update appears positive on paper. The proposed payment rate is “simply not enough to offset the unrelenting growth in U.S. medical spending,” said David Merritt, the senior vice president of external affairs at the Blue Cross Blue Shield Association. “The costs of covering an MA beneficiary are grounded in real, measurable cost trends that continue to climb,” he added, pointing to rising hospital spending and drug costs. | 
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