APG Statement on 2024 Medicare Advantage and Part D Advance Notice

February 8, 2023

Washington, DC – The statement below can be attributed to Susan Dentzer, President and CEO, America’s Physician Groups (APG).

America’s Physician Groups represents more than 360 physician-led groups across the country focused on providing value-based health care – in other words, care that is coordinated, person-centered, and accountable for costs and quality. Our groups provide care for roughly 90 million patients, including nearly 30 percent of all enrollees in Medicare Advantage (MA) plans. The nation’s MA enrollees, in turn, make up nearly one-half of all the 60 million Medicare beneficiaries in the nation.

As such, we are alarmed and concerned by the 2024 Medicare Advantage and Part D Advance Notice that the Centers for Medicare & Medicaid Services (CMS) has released. The agency previously announced multiple goals for Medicare, including that all Medicare beneficiaries be in accountable relationships with their health care providers by 2030, and that the health care system as a whole advance health equity and quality. Yet CMS’s proposed changes in MA would counteract efforts to achieve these very same goals. They would lead to serious harm to patients, especially those that are the most disadvantaged, and have devastating effects on physician practices focused on the care of the nation’s vulnerable older adults and disabled individuals.

Specifically, CMS proposes a major overhaul of the risk adjustment model in MA, which was originally adopted to ensure that MA plans and providers are not disincentivized to care for older, sick individuals. CMS proposes to remove nearly 2,300 diagnostic codes from the MA risk adjustment model, on the ground that they are coded more frequently in MA relative to fee-for-service Medicare. The specific codes to be removed relate to such conditions as major depressive disorder, diabetes with chronic conditions, vascular disease, rheumatoid arthritis, and inflammatory connective tissue disorders such as lupus (which generally affect far more women than men). Many of these conditions are very prevalent among disadvantaged populations.

As a result of these risk-adjustment changes, some of our physician group members have concluded that they will face revenue cuts ranging from more than 10 percent to as much as 20 percent in caring for their Medicare patients enrolled in MA. Multiple consequences could ensue, including inevitable decisions by some of our members to close inner-city and rural clinics, many of them barely financially viable already, that cater to older adults – many of whom have the conditions described above. As a result, hundreds of thousands of vulnerable Medicare Advantage enrollees could lose needed access to care.

We thus call on CMS to undertake these important steps immediately:

  1. Announce that any of these proposed changes will be put on hold for at least a year, and not take effect at least until 2025, to give the broad community of MA providers, plans, and patients time to further understand and provide input on these changes.
  2. Provide far greater transparency to this broad community about how CMS arrived at these proposed changes and how it has calculated the impact across the broad community of MA plans and providers.
  3. Explain its rationale for the specific coding changes, and why the agency believes that denying greater risk-adjustment payments for plans and providers caring for many of the sickest MA beneficiaries will be beneficial for these patients or for the MA program. As noted, risk adjustment was adopted so that plans and providers were not disincentivized to care for the sickest and most vulnerable. The proposed CMS coding changes will mean that plans and providers are not fully compensated for the extensive care provided for these individuals – those suffering from severe chronic conditions, including mental health disorders – and will lose money doing so. The net effect could be to prompt many providers and plans to abandon the MA program.
  4. Explain why it continues to use the illogical rationale that “normal” diagnosis coding occurs in the Medicare fee-for-service environment, and that any deviation from this norm constitutes “abnormal” coding that must be snuffed out. As the chair of MedPAC, Michael Chernew, a noted health economist from Harvard Medical School, has repeatedly said, fee-for-service Medicare is, if anything, “under coded.” Because fee-for-service Medicare is based largely on billing codes, there are minimal incentives in traditional Medicare to code diagnoses at all — so in reality, CMS has no real idea how sick the traditional Medicare population truly is. Eliminating diagnosis codes that are used frequently in MA on the premise that they are not used as frequently in traditional Medicare is thus a supremely irrational move. A rough analogy would be penalizing the Earth for excessive use of oxygen relative to Mars, where very little oxygen exists.
  5. Acknowledge that its proposed actions could thwart the movement to advance health equity and to embrace value-based care arrangements. Many APG members are in “delegated” risk arrangements with MA health plans, in that these physician groups themselves bear the financial risk of caring for MA enrollees. As such, they are fully accountable for the costs and quality of care for MA enrollees, and are thus at the vanguard of the value-based care movement. As noted, CMS has set a goal of having all Medicare beneficiaries in these accountable relationships by 2030. As our groups contemplate the future under CMS’s proposed changes, they believe that these delegated risk contracts and caring for disadvantaged Medicare Advantage enrollees will no longer be viable, and that they will have no choice but to abandon them and return to fee-for-service Medicare payment, which remains largely unaccountable for total costs and quality.

In sum, we believe that CMS is headed down a dangerous and disruptive road that will thwart the Biden administration’s larger goals in health care – most of all, those of advancing health equity and getting all Medicare beneficiaries into accountable relationships with their providers by 2030. The care of millions of older adults and disabled individuals enrolled in MA plans will be at least destabilized, and potentially threatened. Many people could lose access to excellent care from physicians and other clinicians whom they trust, as well as to extra benefits that they have come to expect from MA enrollment. These benefits include not only simple ones such as dental and vision coverage, but also provision of healthful food, transportation, housing subsidies, and other measures that can support disadvantaged populations coping with debilitating chronic conditions.

Vulnerable older adults should not lose this access to care or these vitally important benefits. In the coming days, APG will release more detail on how our members anticipate being affected by CMS’s misguided changes. We as a nation can do better, and we must.
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About America’s Physician Groups
America’s Physician Groups is a national association representing approximately 360 physician groups with approximately 170,000 physicians providing care to nearly 90 million patients. APG’s motto, ‘Taking Responsibility for America’s Health,’ represents our members’ commitment to clinically integrated, coordinated, value-based healthcare in which physician groups are accountable for the costs and quality of patient care. Visit us atwww.apg.org.

Contact: Greg Phillips, APG Director of Communications, 202-770-1901, gphillips@apg.org