HLC Recommends Adjustments to Proposed Medicare Advantage Rate Cuts to Preserve Quality Patient Care

In Letter to CMS, Health Leaders Also Cite Ramifications of Proposed Changes in Diagnosis Coding That Could Impact Health Outcomes

WASHINGTON – A proposed reduction in federal payments to Medicare Advantage plans will, according to an association of health industry leaders, have varying effects on individual health plans resulting in, for many enrollees, “a detrimental impact on their ability to access affordable and high-quality healthcare.” In a letter to the Centers for Medicare and Medicaid Services, the Healthcare Leadership Council (HLC) urged the agency to update the effective growth rate to appropriately reflect documented increases, including inflation, in Medicare costs.

In the letter, HLC president Mary R. Grealy also raised concerns regarding a proposed reduction in diagnosis codes that are used to identify specific conditions such as chronic diabetes complications, major depressive disorders, vascular disease, rheumatoid arthritis, and inflammatory connective tissue disease.

The proposed changes in payment rates for the 2024 plan year would result in an overall 2.27 percent payment reduction to Medicare Advantage plans at a time in which coverage costs for enrollees are rising.  The letter cited a report from the Avalere research firm noting that this payment reduction could result in an average $540 decrease in benefits for enrollees per year.

“These cuts will disproportionately hurt seniors from low-income, rural and other underserved communities as well as those with serious long-term health conditions such as diabetes or heart disease,” the HLC letter said.

Ms. Grealy pointed out that some Medicare Advantage enrollees, if the cuts go into effect, could be in danger of losing supplemental benefits such as those that address social determinants of health related to food insecurity, social isolation, wellness and transportation needs, as well as vision, dental, hearing and physical activity benefits. These supplemental services have been critical, she wrote, in reducing avoidable hospitalizations and lowering hospital readmission rates.

On the coding issue, Ms. Grealy wrote that the proposed reduction in ICD-10 diagnosis codes “will prevent providers from recognizing asymptomatic diseases, resulting in an unwanted increase in avoidable emergency room visits, hospital admissions, and higher costs.” Physicians, she said, would be likely to face revenue cuts as a result of the proposed change, risking the possible closure of urban and rural clinics serving vulnerable Medicare Advantage enrollees.

The letter also urges CMS, in its implementation of the Inflation Reduction Act, to leave ample time for key stakeholders including pharmacists, healthcare providers and health plans to comply with the law’s provisions, and to use the regulatory formal notice and comment period to enable affected parties to respond to complex prescription drug pricing policy changes and minimize any potential access problems for consumers.



For Immediate Release: March 6, 2023
Contact: Kelly Fernandez, (202) 449-3452