The Trump De-Regulators and Medicare Advantage

Hmm, you’re asking what will the Trump de-regulators do to Medicare Advantage? Given the confusion about ObamaCare non-replacement for three years and the selection of a Medicaid maven for Administrator, we haven’t heard much about Medicare Advantage and Part D. However, Trump said he wants a list of wasteful and unnecessary regulation. Even with that, we may not see a lot of actual regulatory change during 2017 in either of these programs. Changing regulations in a major way takes too much time to propose, review, and finalize anything of substance in a short period. However, there are other actions the new Administrator can take. First and foremost, de-regulators are interested in slowing the process or moderating its effects, so here are some potential actions.

The Centers for Medicare & Medicaid Services (CMS) bureaucracy has grown substantially over the past eight years. CMS reorganizations have added staff and resources that oversee Part C and Part D. Compliance and audit functions have been expanded with more standardized processes focused on limited plan functions that yield actionable findings. These have also resulted in a plethora of enforcement activities and civil money penalties that have increased in the past few years. Decision-making has become increasingly centralized. Contractors supplement general audit reviews where CMS lacks staff. Contractors are also used to perform tasks that focus on very limited activities requiring health plan resources. For example, CMS contracted to compare print directories with online directories. A de-regulator will focus on blunting these activities by reducing budgets, staff attrition, and suspending use of outside contractors.

The next area is sub-regulation. These are manuals and other guidance CMS publishes as needed. For example, while some Health Plan Management System (HPMS) notices are general housekeeping and reminders, others describe new guidance and additional requirements. Clearly, these will stop. To make changes happen via HPMS, health plans can surface their pain points focusing on frequency of reviews, audit burden, and reporting. Trump de-regulators will respond by removing and reducing the intensity of oversight activities or expense-laden functions that add to operational costs. Some likely areas are in marketing and sales, quality reporting, as well as network adequacy reviews that have been a recent focus. We are also likely to see a higher bar for instances where CMS requires health plans to engage independent auditors.

A new Administrator will avoid blunting any cases where health and safety are in question. Oversight of appeals requirements where plans have a demonstrated lack of compliance will remain in place so egregious cases won’t surface. Finally, there is some potential Star Ratings changes could be implemented in the latter half of the year that would allow for better ratings, higher payments, or even treatment of low-performing plans.

Overall, keep a close watch on trends in these and similar areas to ferret out what de-regulators are doing and perhaps even a view of where they will go in the next two years.



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