Professor Mike Chernew Discusses Medicare Advantage Policy Reforms (March 8th)
(As explained on the podcast home page, this is the fourth of eight interviews concerning federal healthcare policy reform. This discussion is with Harvard economics Professor Michael Chernew and was conducted in late November. As you will hear this podcast like all others is introduced by ProMedica's CEO, Randy Oostra. This series was produced in an effort to interest or persuade federal healthcare officials to pursue substantive healthcare policy reform.)
On background, the rapidly growing Medicare Advantage (MA) program currently provides care to 24 million or 36% of all Medicare beneficiaries at a cost of approximately $275 billion annually. Despite approaching its 4oth year, MA still does not, as initially intended, reduce Medicare spending. Per MedPAC, this year overall MA benchmarks will average 107% of Medicare Fee For Service (FFS) spending. This is due in part to MA’s quality performance program that pays bonuses to plans with a high Star rating and risk adjustment upcoding not fully offset by the program’s coding intensity adjustment factor. More problematic is the fact that a September 2020 CBO budget outlook concluded Medicare’s hospital insurance trust fund will be insolvent as soon as 2024. As MedPAC candidly recognized in its most recent report to the Congress, “unless changes are made . . . the cost of the Medicare program will become unsustainable” necessitating “dramatic changes to the Medicare program.”
During this interview begins with Professor Chernew providing a general overview of the MA program or how generally it can be improved. He moves on to discussing how MA financial benchmarking can be improved, e.g., reform benchmark quartiles, move MA into a value incentive program and reform the MA Stars program, comments on MA coding intensity reform, discusses reforms to MA's Quality Bonus Program (QBP), again, Stars, or via MedPAC's recommended Value Incentive Program (VIP) program, comments on patient reported outcome measures, factoring social economic status in adjusting beneficiary risk and MA performance pay, equalizing MA and Medicare Fee For Service quality performance payments, how, if at all, MA and Fee for Service can compete on a level playing field, MA plans participating in the MACRA Advanced Payment Model (APM) pathway, the MA Value Based Insurance Program (VBID) demonstration and comments on the pending insolvency of Medicare's hospital trust fund.
Michael Chernew is the Leonard D. Schaeffer Professor of Health Care Policy and the Director of the Healthcare Markets and Regulation (HMR) Lab in the Department of Health Care Policy at Harvard Medical School. Profess Chernew is also currently the Chair of the Medicare Payment Advisory Commission (MedPAC) while previously serving as the Vice Chair from 2012-2014 and a Member from 2008-2012. In 2000, 2004 and 2010, he served on technical advisory panels for the Center for Medicare and Medicaid Services (CMS) that reviewed the assumptions used by Medicare actuaries to assess the financial status of Medicare trust funds. He is a member of the Congressional Budget Office’s Panel of Health Advisors and Vice Chair of the Massachusetts Health Connector Board. Dr. Chernew is also a member of the National Academy of Sciences, a research associate at the National Bureau of Economic Research and a senior Visiting Fellow at MITRE. He is currently a co-editor of the American Journal of Managed Care. Dr. Chernew earned his undergraduate degree from the University of Pennsylvania and his PhD in economics from Stanford University. In 1998, he was awarded the John D. Thompson Prize for Young Investigators by the Association of University Programs in Public Health. In 1999, he received the Alice S. Hersh Young Investigator Award from the Association of Health Services Research.
To read this interview's transcript or to post a comment or question, please go to: https://commissiononhealthcare.org/.