HJNO Jan/Feb 2025

42 JAN / FEB 2025 I  HEALTHCARE JOURNAL OF NEW ORLEANS  $500 for a CT scan due to the cost at low volumes, that is in the benchmark. If MA sends the patient to a [non-CAH] provider instead for $100, it keeps $400. Suddenly rural patients became the most profitable target you could have because of the high cost of providing care in rural communities.” “This is just pure arbitrage for the MA plans,” said Stroudwater Chair Eric Shell. “That is just dropping to the bottom line of these MA plans and putting dollars over care. If this happens on a nationwide basis, now that MedicareAdvantage plans are 54% of total beneficiaries, this bodes very poorly for rural America and access.” Payments toMAplans increase under the benchmarks if these plans create sufficient friction to prompt sicker enrollees to switch back to traditional Medicare. KFF recently identified challenges for low-income dual- eligible beneficiaries, minorities, people ages 85 and older, and patients with diabe- tes and cancer. The researchers called this “adverse selection into traditional Medicare, which leads to higher Medicare Advantage benchmarks and higher payments to Medi- care Advantage plans.” 19 ADDRESSING MA PROGRAM INTEGRITY Congress established the MAprogram in 2003 with the aspirational goal of improv- ing value through choice and competi- tion. Today, the program continues to grow in popularity by offering zero premiums (beyond Medicare Part B), unique out-of- pocket limits, affordable medications and free vision or dental benefits. 20 In compar- ison, traditional Medicare offers none of these up- front perks and no protection for catastrophic medical expenses without pur- chase of supplemental coverage, which can become expensive for many beneficiaries. 21 As MAexpands and CMS works to nudge all beneficiaries into value-based care arrangements by 2030, even supporters of MA “default enrollment”policies argue that lawmakers need to improve the program’s integrity. 22 MedPAC also found that “Medi- care spends approximately 22% more for MA enrollees than it would spend if those beneficiaries were enrolled in [fee-for- ser- vice] Medicare, a difference that translates into a projected $83 billion in 2024.” 23 Med- PAC expressed concerns that these higher payments increase Part B premiums for tra- ditional Medicare enrollees, while distorting choice and competition in the MAprogram. SEEKING SOLUTIONS Without federal action, experts warn MA plans could trigger the closure of CAHs and other rural hospitals that might oth- erwise thrive, causing these communi- ties to lose access to inpatient beds, local doctor-patient relationships, and highly skilled rural jobs that support their local economies. 24 Proposed rural access solutions include revisiting MArural network adequacy stan- dards, requiring MA plans to make timely payments to CAHs at traditional Medicare rates, and keeping enhanced CAH payments out of the hands of MA companies under a voluntary new payment model. Providers said they are also still waiting for CMS to aggressively enforce new rules on improper MA care denials. REVISITING MA NETWORK ADEQUACY After hearing about care disruptions in rural Louisiana, U.S. Sen. Bill Cassidy cir- culated a discussion draft of legislation that would require MA plans to offer contracts to certain defined essential community pro- viders that are integral to providing care to underserved communities and low-income populations. 25 “I’m glad Dr. Cassidy recognizes the issue,” said Freeman. “This is going to be a long haul. It’s never an easy fight, no mat- ter how straightforward a solution seems.” Pratt said the bill sends a strong mes- sage that lawmakers want to protect rural beneficiaries from harmful local access dis- ruptions. Barr said CMS could also avoid burdensome MA travel requirements by reverting to the MAnetwork adequacy stan- dards in effect before 2020. Bunkie General Hospital CEO Linda Dev- ille said, “If you’re taking Medicare money from patients, then you’ve got to pro- vide care where they reside,” reflecting on Humana MA’s abrupt contract termination with her CAH. REQUIRING MA PAYMENT PARITY FOR CAHS Provider groups have warned that “MA plans are not required to pay rural provid- ers, such as CAHs, at the same cost basis as fee-for-service Medicare; and they are increasingly paying below costs, strain- ing the financial viability of many rural providers.” 26 The Center for Healthcare Quality & Pay- ment Reform (CHQPR) asked Congress to require MAplans to make timely payments to CAHs and other small rural hospitals at Medicare rates. 27 “This is a problem Con- gress can solve without spending a dime of additional money,”wrote CHQPR President Harold D. Miller. “MA plans should spend existing money in the best interest of rural patients.” CREATING A NEW VOLUNTARY CAH PAYMENT SYSTEM Shell argued that Congress should mod- ernize CAH payments “to reflect the new era of MA plans and alternative payment models. Until we move in this direction, the friction between CAHs and payers will con- tinue to grow.” Barr, Shell, and other members of the Coalition for Rural Medicare Equality circu- lated a proposal for a “New Voluntary Pay- ment Option for CAHs and RHCs.” Under the proposals, MA plans would reimburse CAHs at similar rates that they pay non- rural providers. CAHs would separately file cost reports with MedicareAdministra- tive Contractors (MACs) to recover unre- imbursed costs. In exchange for this added stability, CAHs would report quality metrics to CMS. Enhanced CAH payments would not impact MA payment benchmarks or a beneficiary’s coinsurance payments, which, according toMedPAC, equal 20% of charges for CAH outpatient services. 28 “It will cost the MA plan the exact same amount to get that procedure in the rural