Latest / Becker’s Healthcare Podcast / Jakob Emerson Speaking Medicare Advantage & Prior Authorization

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Jakob Emerson Speaking Medicare Advantage & Prior Authorization · Becker’s Healthcare Podcast

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  This is Scott Becker with the Becker's Healthcare
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  Podcast.
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  Today for me is a is a is
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  a great day because I get to interview
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  today
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  two of the brightest people that I get
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  to talk to regularly.
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  Today on the Becker's Healthcare Podcast, I get
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  to talk to Jacob Emerson.
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  Jacob follows the payer arena and is literally
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  one of the most gifted people I get
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  to visit with. I also later today get
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  to visit with an extremely gifted person.
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  But that person, he has a huge ego,
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  so I'm not gonna say his name out
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  loud right now. But Jacob is able to
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  keep his ego in check and also super
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  bright, so we'll mention it out loud. Jacob,
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  tell us what's going on in the payer
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  world currently. What are some of the stories
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  that you're watching closely?
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  Yeah. Hey, Scott. I I appreciate the kind
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  words.
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  So I think to start us off,
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  just within this last week,
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  we got CMS's
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  final Medicare Advantage rule for 2027
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  along with their separate final rate announcement for
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  how much, the government is going to be
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  raising how much they pay Medicare Advantage Plans
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  going to, 2027.
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  So some interesting updates there and just also
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  some interesting policy updates and what it means
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  politically and and, you know, contextually for the
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  industry in terms of, how the administration overall
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  is thinking about private Medicare.
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  And then some some updates around prior authorization,
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  you know, everyone's favorite term that causes a
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  lot of headaches for I would honestly argue
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  for both sides for both the insurance companies
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  and providers, but certainly, I think more for
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  the providers.
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  Just some updates there around policy two, both
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  from CMS and then some voluntary
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  promises from the industry, from the insurance industry,
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  and some of the progress that they say
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  they've made on this on this challenge recently.
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  So Medicare Advantage and prior authorization. And and
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  talk about Medicare Advantage rates. I saw it
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  registered. I think they went up 2.48%
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  or something, but tell me what's going on
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  there and what that means. Is the payer
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  industry thrilled with that, not thrilled with that?
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  Where does it look? What what do other
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  people think? Give us some of your thoughts.
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  I mean, I think they're they're thrilled with
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  it compared to what it could have been,
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  which was essentially flat,
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  compared to last year. So so on that
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  front, it's good. But I think also compared
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  to years
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  past or last year,
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  it's it's about half of what they got
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  last year in terms of a dollar amount
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  overall. So, you know, I think happy ish
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  is a good way to say it.
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  I think overall in terms of what the
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  policy, like, the final rule and the the
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  payment rate combined tells
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  us is that, you know, this is gonna
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  be the dominant delivery model for Medicare moving
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  forward. The government is still all in on
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  Medicare Advantage. There's nothing, you know, there's nothing
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  that's changed there. I know there's a lot
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  of rhetoric that goes around in the industry,
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  but, you know, it's full steam ahead with
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  Medicare Advantage.
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  I think that that's really an important point
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  because as much as health systems
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  seem to really not love and as much
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  as physicians are not loving Medicare Advantage,
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  when you look at o b three
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  and you look at what's going on with
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  Medicare Advantage and still at fifty four percent
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  or so, I don't know what the exact
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  number is right now enrolled in Medicare Advantage.
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  Yeah. It it it seems like that is
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  just where we're going whether we like it
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  or not. Yeah. And I mean, one thing,
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  you know, I I,
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  I often talk to doctor Sachin Jain at
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  SCAM Group who used to be at CMS,
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  used to be at some of the big
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  insurers.
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  He's, you know, he's a very smart industry
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  leader and about some of these tensions with
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  MA and health systems,
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  because it's a very real thing. A lot
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  of health systems are not contracting with a
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  lot of the bigger MA plans anymore because
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  of all these issues with them getting paid
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  and things like that.
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  But he always says to me, you know,
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  at the end of the day, Medicare Advantage
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  provides cheaper care
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  in people on low incomes are on these
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  plans,
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  on very fixed incomes as seniors.
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  And, you know, at the end of the
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  day, Medicare doesn't provide hearing,
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  dental, vision benefits.
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  And if you want those benefits when you
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  have original Medicare, you have to pay a
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  lot more for a supplement plan.
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  So, you know, Medicare Advantage does provide better
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  benefits overall even if it's a headache for
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  providers sometimes to get paid,
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  you know, for providing those services. So I
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  think that's No. No. No. He he has
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  a bias because he's also in the managed
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  care Medicare business. Absolutely. And and and and
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  some would argue that the reality is, yes,
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  there's these other benefits, but the track record
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  so far is it's costing Medicare
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  more than traditional Medicare, not less. So you
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  talk about so so this concept, and I
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  I doctor Jane, Sachin Jane, is one of
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  the brightest people I know. He's also one
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  of the most straight shooting people I know.
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  But this concept that there's a cost benefit
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  to the country
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  in Medicare Advantage has not played out yet.
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  Yes. You know, you're absolutely correct. And I
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  think, you know, diving into a little bit
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  around what CMS has just done this past
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  week goes directly to the heart of that,
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  Scott, in terms of, you know, it costs
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  more because there's a lot of,
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  there's a lot of tricky
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  coding that goes on, and I'm putting that's
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  a I think a very polite way to
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  say it. And so overall, to your point
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  originally, you know, the the headline figure is
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  the 2.48%
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  rate increase,
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  which translates to about $13,000,000,000
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  more flowing to these private Medicare insurers for
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  2027.
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  But basically and and that basically when you
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  factor in risk scores over time,
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  the effective increase is actually closer to 5%.
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  So this is it is good news for
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  MA overall, but,
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  you know, they got 47,000
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  comments on on on what was going on
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  here because of, I think, a lot of
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  the politically loaded changes that they made as
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  well. And so one of these is,
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  they're they're gonna be holding firm on a
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  almost 6% coding pattern adjustment, which is the
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  agency's way of saying, we know Medicare Advantage
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  Plans systematically
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  document patients as sicker than those that are
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  in fee for service Medicare.
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  So we're gonna be discounting payments to these
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  insurers
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  accordingly.
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  And, you know, the insurance industry pushed back
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  on this, but it's basically CMS
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  signaling and saying, we're not abandoning scrutiny of
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  upcoding that is making Medicare Advantage more expensive
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  than Medicare
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  even as even as we're increasing pay for
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  next year. And the other thing that they're
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  gonna be doing
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  is they're gonna be keeping in the exclusion
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  of diagnoses that are from unlinked chart reviews
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  and
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  basically that is a direct blow to to
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  the the fraud and the overpayment scrutiny that
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  we're also talking about. So unlinked chart reviews
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  are basically when an MA plan hires coders
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  to go through the patient record and add
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  diagnoses that weren't actually captured
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  when when the doctor or the nurse was
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  in the room with the patient.
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  And, you know, we've seen CMS and the
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  DOJ go after plans for this even just
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  this year with Kaiser, the the biggest example
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  of all to date with that over $500,000,000
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  settlement over over,
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  upcoding, basically.
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  They didn't admit to any wrongdoing, but it's
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  basically
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  CMS making it official that
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  these diagnoses that weren't actually captured in the
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  room, they don't count for risk scores that
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  basically then gives the the plan more money
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  from the federal government.
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  So so, yes, the money's going up, on
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  a percentage basis, on a, well, quantity basis
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  for $13,000,000,000,
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  but there's things being put in place here
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  that make it very clear the federal government
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  knows and is and is, responding
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  to the very real upcoding and overpayment trend
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  that exists in Medicare Advantage.
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  Thank you very, very much.
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  Jacob, talk about the pre authorization
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  war and what's going on there. Yeah. So
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  there's kind of two different things going on
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  here. There's both
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  CMS,
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  parts of a rule that was enacted finalized
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  back in 2024,
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  parts of this rule going into effect now,
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  starting in January year, starting then in March,
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  and going into next year different parts of
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  this rule, all basically requiring payers to,
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  get better about prior auth over plans that
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  CMS controls, Medicare Advantage, Medicaid, CHIP, ACA.
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  Basically, they have to report publicly on all
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  their websites how often they deny prior auth
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  requests, how often appeals are,
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  how denials are overturned by appeal,
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  and then certain rules around how how quickly
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  they,
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  make decisions and new electronic
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  requirements between the provider and the payer. So
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  that's all happening. And then last year as
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  well, payers, all 50
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  big ones got together with CMS and basically
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  announced a pledge
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  that for
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  employer plans, fully insured plans, the commercial stuff
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  that they would also be kind of matching
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  and expanding a little bit on those those
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  rules that CMS put into place. Basically saying
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  that they're gonna streamline and simplify prior auth,
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  for for the vast majority of Americans. So
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  we've got now we're starting to get back
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  some of the data on how is this
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  all shaking out. And
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  on on the commercial side on the pledge,
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  you know, again these are just promises from
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  the insurance industry. So I think huge asterisk
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  there.
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  And then, you know, the results now is
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  also coming from them through through surveys of
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  health plans through AHIP, the the trade group.
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  So, again, you kinda have to take some
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  of this with a grain of salt, I
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  will say. But they've said they've eliminated 11%
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  of prior auth requirements,
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  since last year,
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  which, and 15%
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  across Medicare Advantage Plans. Again, that's according to
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  the industry based off of their own promises
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  to to the government. And then in terms
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  of on the CMS regulations,
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  we these metrics went live across their website,
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  the insurance websites on March 31,
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  but there's already, you know, expert analysis being
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  put out saying that it does it kinda
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  like the price transparency rules that went into
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  effect a few years ago that it doesn't
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  offer a lot of insight to the normal
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  everyday person because you can't actually see the
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  reasons why prior auth requests were denied. You
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  can't break it down by specific
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  service categories.
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  So it's kind of like the the the
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  data is out there, but it's so broad,
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  it's so large
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  that the everyday person
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  can't really use it. Kinda making some of
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  these federal transparency efforts. I don't wanna say
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  useless, but
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  not not usable for you and I at
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  least, to start. We're gonna have to have
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  private companies probably wade through this data and
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  transform it into more
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  usable stuff,
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  for for the everyday American.
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  Well, isn't isn't that the truth of so
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  much of this stuff that actually turning it
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  into practical useful stuff Yeah. Is is very
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  different than the legislative intent Yep. Or the
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  policy that's put forth. I think that just
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  is right on. It seems like it's always
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  CMS says, you know, you've gotta put out
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  your prices. This is simplifying it, but CMS
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  says you gotta put out your prices. The
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  insurers do to, you know, comply with the
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  law,
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  but, you know, those prices are hidden in
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  very complicated spreadsheets that are huge that the
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  normal everyday person does not have the computer
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  power to process.
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  So they've complied,
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  but it doesn't actually matter because you and
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  I cannot then go shop based off of
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  pricing. So
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  it's, yeah, it's another one of those situations
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  where the the the insurance industry has complied.
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  Is it usable? Not really. Right. It sounds
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  all good, but it's not really helpful necessarily.
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  Yeah. But I I think that's right on.
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  Jacob, as always, I I learn more in
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  a quick period of time from talking to
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  you than almost anybody else in the world.
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  Thank you so much for joining us today
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  on the Becker's Healthcare Podcast. Again, we talked
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  about today Jacob Emerson on Medicare Advantage and
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  prior authorizations.
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  Thank you so much for joining us. Thank
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  you, Scott.