Medicare Advantage payment rates for 2017 will rise by 1.35%

Baseline Medicare Advantage payment rates for 2017 will rise by 1.35% on average, an early win for health insurance companies in what is the final Medicare rate battle of the Obama administration.

When factoring in the risk coding tendencies, the average change in Medicare Advantage insurers’ revenue will climb 3.55% next year, according to a CMS release posted late Friday. The proposal is a major shift from last February, when initial benchmark rates were cut by an average of 0.95% before factoring in risk score trends.

In addition to pay bumps, several major policies are embedded within the CMS’ advance rate notice, including changes that will help insurers with many low-income seniors, known as dual-eligibles because they qualify for Medicare and Medicaid. The CMS included changes to the Medicare Advantage risk-adjustment model and quality ratings system that will, in essence, boost taxpayer funding for plans that enroll higher amounts of poor seniors.

The Affordable Care Act phased in cuts to the program’s benchmark rates over six years, and 2017 will be the last year of those payment reductions. Previously, the government heavily overpaid Medicare Advantage plans, and the ACA sought to bring the capitated payments in line with traditional Medicare spending.

Insurers warned those cuts would drastically lower enrollment, but those concerns never came to pass. More than 18 million people, a third of all Medicare beneficiaries, are enrolled in a Medicare Advantage plan as of this month. That’sa sizable increase from the roughly 11 million seniors who had a Medicare Advantage plan before the ACA took effect.

Yet, despite the final ACA-mandated cuts, average payments will remain positive for 2017, according to the CMS. The amounts will vary for each health plan, but many industry observers believe 2017 is “the best rate environment we’ve seen in years,” said John Gorman, a consultant for Medicare Advantage insurers and a former CMS official.

Medicare Advantage plans received roughly $170 billion in 2015. The CMS pays Medicare Advantage insurers a monthly amount for each member, based partly on risk scores. The median monthly capitated payment in 2014 was $754, or about $9,000 per year for the average beneficiary, according to CMS data. Insurers are salivating over the growing membership and revenue base because even a small margin of 2% to 5% reaps billions of dollars in profit for the industry, assuming plans have high quality marks.

The 2017 proposal again makes changes to the program’s risk-adjustment model. Medicare Advantage insurers document the health status of their members by using risk scores that adjust for different demographics and conditions, known as hierarchical condition categories. A higher risk score indicates a person is sicker or has complicated chronic health conditions, which leads to a higher payment.

After New Hampshire victory, Sanders reaffirms single-payer stance

Vermont Sen. Bernie Sanders and his vision of single-payer healthcare won the night in New Hampshire for Democrats. Donald Trump, who has shared less about his healthcare views but once also favored a more centralized insurance system, came in first for the Republican field.

Both were declared winners of the New Hampshire primary by wide margins as soon as the polls closed. Sanders was nearly tied with Hillary Clinton at the Iowa caucuses last week. Trump came in second to Texas Sen. Ted Cruz in Iowa.

Exit polls showed issues like income inequality and the economy as the top concerns for Democratic voters in New Hampshire while terrorism and the economy were top of mind for Republican voters. They also show that the majority of the Medicare-eligible age group, those 65 and older, voted for Clinton.

The expected result is nevertheless a blow to the Clinton campaign. She has pushed back recently on Sanders’ Medicare-for-all plan, saying there is no chance it would pass in Congress and that the nation should instead focus on building on the successes of the Affordable Care Act.

Broward Health under federal and state probes after CEO’s suicide

Broward Health reportedly is under two investigations, one federal, another state, that have come to light after the recent suicide of the system’s CEO.

The FBI is looking into claims of corruption following evidence gathered by a corporate private investigator allegedly hired by Dr. Nabil El Sanadi, according to a not-for-profit investigative journalism organization.

El Sanadi shot himself last month in the lobby bathroom of his Lauderdale-by-the-Sea condo building. But for the past year, investigator Wayne Black said he had been meeting El Sanadi in restaurants and at the hospital executive’s home because El Sanadi feared his office was bugged, according to an e-mail obtained by the Florida Bulldog.

Just hours after El Sanadi’s funeral last week, Black told Broward Health’s general counsel that his evidence had led to the FBI investigation.

Black’s previous investigations resulted in the 2003 conviction of Broward Health Chief Financial Officer Patricia Mahaney for embezzlement, the Sun Sentinel reported.

Broward Health attacked Black in a statement released Tuesday, saying he failed to fulfill his obligations, acted unprofessionally and was belligerent to Broward Health personnel,according to the Sun Sentinel. The system reportedly asked Black to cease all services on behalf of Broward Health in early October.

Neither the FBI nor Broward Health have confirmed that an investigation is ongoing.

But the FBI probe would be one of at least two facing Broward Health.

Florida Bulldog claims Florida’s chief inspector general, who works for Gov. Rick Scott, sent a letter dated the day of El Sanadi’s funeral to Broward Health Chairman David Di Pietro. The letter outlined plans to conduct a review of all contracts the system has entered into since July 1, 2012, the report said.

Di Pietro has called a Feb. 10 special meeting of the hospital district board to discuss the two investigations.

In September, Broward Health agreed to pay $69.5 million to settle allegationsthat it illegally paid nine doctors for referrals.

As part of the deal, the U.S. Justice Department required the system sign agreements to disclose financial arrangements with doctors and vendors, develop a new code of conduct and establish ethics training for personnel.

The Florida Bulldog reports that has led to a “doctors rebellion” at Broward Health, with physicians refusing to sign and the hospital’s board warning those who don’t sign that their privileges may be suspended. Physicians say the agreements are vague and could leave them vulnerable to legal actions.