Reports and Resources

Error message

Deprecated function: The each() function is deprecated. This message will be suppressed on further calls in _menu_load_objects() (line 569 of /mnt/Target01/338050/722641/

March 4, 2015
Andrew Slavitt
Acting Administrator
Centers for Medicare and Medicaid Services
U.S. Department of Health and Human Services
200 Independence Ave., SW
Washington, D.C. 20201
Re: Advance Notice of Methodological Changes for Calendar Year (CY) 2016 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter
Dear Mr. Slavitt:
The Partnership for the Future of Medicare (PFM) appreciates the opportunity to provide our views regarding the Centers for Medicare and Medicaid Services’ (CMS) anticipated changes to the Medicare Advantage (MA) program per the Advance Notice/Draft Call Letter published February 20, 2015.
PFM is a bi-partisan organization focused on ensuring the long-term security of Medicare by improving the value of beneficiary care while also reducing long-term program cost growth. We represent a diverse group of stakeholders, including the chronically ill, the elderly, disabled, and those living in rural settings, many of whom rely on Medicare. With these goals in mind, PFM formed a set of basic bi-partisan principles, or “guard rails,” for safeguarding and enhancing the Medicare program, including rewarding quality over quantity; encouraging innovative ideas and public-private partnerships; advancing transparency, accountability and data to empower beneficiaries and providers; supporting vulnerable populations like the chronically ill; and strengthening program integrity. Our guard rails aim to move the health care system away from Medicare’s current fee-for-service model to a system that promotes high value of care over volume of services. 
Though CMS’ proposed 2016 payment reductions are smaller than last year’s proposed rate cuts, they continue a pattern of deep cuts that have persisted over many years. Year-over-year cuts to the program will have negative consequences for chronically ill beneficiaries and the sustainability of the MA program, including beneficiary costs and quality of care. Unfortunately, CMS’ proposed 2016 rate cuts contradict the Department of Health and Human Services’ (HHS) commitment in January 2015 to move the health care system away from fee-for-service and toward a model of care that rewards quality over quantity.
According to an analysis in Health Affairs, MA plans and their coordinated care approach have resulted in fewer preventable hospitalizations, better access to primary care and preventive care, and more appropriate utilization of services. These are the kinds of results we should encourage and incentivize, not threaten with more cuts.
The potential for higher premiums and reduced benefits could result in further disruption in the MA market that will likely affect many of the approximately 17 million Medicare beneficiaries enrolled in MA plans. Further cuts to MA hurt seniors through reduced benefits, fewer choices, and increased costs. The proposed cut will likely have the largest impact on the most vulnerable beneficiaries, such as those with special needs and those who utilize services the most. In addition, cuts to MA have the potential to stifle innovation achieved by MA plans in recent years, including new ways to pay for and deliver coordinated care, and to attain better outcomes and value-driven results. Importantly, bi-partisan Congressional support for MA remains strong. In February, 53 Senators signed a letter emphasizing the need to protect the program from further cuts.
While we are encouraged by CMS’ progress in similar initiatives such as Bundled Payments and Patient-Centered Medical Homes, it is important to note that MA plans have been implementing these types of  care-improving and cost-saving models for years and have laid the groundwork for the current demonstrations. MA is a critical program that serves nearly 30 percent of all Medicare beneficiaries and is making important strides in fostering more coordinated, preventive, integrated, and quality care in a variety of settings, including the home. Our fear is that the proposed cuts to MA payment rates could drive more beneficiaries back into the flawed fee-for-service system and be detrimental to existing efforts and progress being made in the program.
We ask that CMS hold 2016 Medicare Advantage payment rates flat in order to safeguard program security, protect beneficiaries’ access to the plans that they like, and ensure that MA continues to serve as an innovative model and valued partner in broader Medicare reform efforts.
Thank you again for this opportunity to provide our comments on proposed changes to MA rates. We look forward to working with you as our organizations continue to encourage efforts to strengthen the financial sustainability and value of care within the Medicare program.


/s/ Douglas Holtz-Eakin, Ph.D.
Co-Chair, Partnership for the Future of Medicare
/s/ Kenneth Thorpe, Ph.D.
Co-Chair, Partnership for the Future of Medicare

Cc:  The Honorable John Boehner
The Honorable Mitch McConnell
The Honorable Nancy Pelosi
The Honorable Harry Reid

Wednesday, March 4, 2015