Things are heating up on Medicare Advantage (MA) at the Medicare Payment Advisory Commission (MedPAC) latest meeting. The January 12 meeting focused on a report providing a status update on the MA program. Board chair Michael Chernew noted in his opening remarks that the commission will be spending a lot of its time on MA issues in the months ahead especially now that MA enrollment is above 52% of all Medicare beneficiaries.

The MA status report highlights trends not only in enrollment, availability of plans and benefits, and market consolidation but also factors impacting plan payments. Of note, 58% of enrollees are enrolled in plans offered by three Medicare Advantage Organizations (MAOs): United Health, Humana and CVS (Aetna). Several commissioners raised concerns about market consolidation, which LeadingAge shares. The heated discussion arose from the analysis and estimates of the impacts of MA plan coding intensity and favorable selection on the Medicare Trust Fund and the MA program payments to plans.

The analysis finds that MA payment rates for 2022-24 are estimated to be 20% above Medicare FFS and is particularly concerning as it impacts the Medicare Trust Fund. There was much discussion among the commissioners on these points. The discussion turned contentious when Commissioner Brian Miller noted he had offered substantial feedback on the report and felt it had all been ignored. He called the report “fundamentally flawed” and indicated he felt the report was bias against plans and challenged MedPAC staff to identify three things that MA plans do well. He also suggested the Chair’s close discussions with CMS leaders had resulted in the report being “hijacked for political gain.”

We expect the MA status report to be finalized later this year, but discussions and research will continue by the commission.