Executive Order to Pave Way for Medicare Changes
President Trump on Oct. 3 announced an executive order that aims to give Medicare recipients more access to innovative and affordable plan options, as well make it easier to find physicians that take new Medicare patients.
The order directs the Department of Health and Human Services to write new regulations and take administrative actions that would encourage Medicare Advantage insurers to offer plan designs with innovative new options like telemedicine services and supplemental benefits that plans do not currently offer.
Under the executive order, HHS has a year to introduce new regulations and guidance and take administrative actions that:
- Encourage Medicare Advantage insurers to design plans that reduce barriers to accessing Medicare Medical Savings Accounts. Currently, few seniors are enrolled in such tax-free savings accounts, which are traditionally tied to a high-deductible Medicare Advantage plan.
- Promote innovations in supplemental benefits and telehealth services in Medicare Advantage plans.
- Create a new payment model that adjusts supplemental Medicare Advantage benefits to allow beneficiaries to share more directly in the savings that those plans generate, including through cash or monetary rebates. This would ostensibly help people seek out "high-value care."
- Ensure that fee-for-service Medicare plans are not advantaged or promoted over Medicare Advantage plans with respect to how they are administered. HHS was ordered to find ways to modify Medicare fee-for-service payments to more closely reflect the prices paid for services in Medicare Advantage as well as the commercial insurance market, and to encourage more competition.
During a press conference, HHS Secretary Alex Azar said the agency would ensure that enrollees are not being specifically steered into fee-for-service plans and that they are given real choices in plans.
One of the downsides of the broad proposal, according to health care analysts, is that it could lead to higher out-of-pocket costs for seniors and expose more Medicare recipients to surprise medical bills. But that has yet to be seen, since no regulations have yet been written.
'Balance billing' concerns
Because the order was written so vaguely, it's not clear at all what the final regulations that HHS creates will be. Some are concerned it may eliminate the practice of "balance billing."
Currently, most physicians who accept Medicare patients accept what Medicare pays them and do not charge patients for the rest of the bill. If they do, they are limited to charging 9.25% above Medicare's regular rates. This amount is what's known as balance billing.
But, most doctors forgo balance billing because of the paperwork involved.
On top of that, doctors must either accept Medicare patients or not accept them. They can't say they will only accept some Medicare patients. It's all or nothing.
Pundits reading into the executive order say the new rules may lift the balance billing cap of 9.25%. Or the regulations may allow doctors to stay in the program for certain patients, but not all.
However, that could leave some patients liable for entire bills, which might lead to confusion among Medicare beneficiaries - and also to surprise bills, which have become a major problem in the U.S. health care system.
Stay tuned as we get more information on this executive order and the eventual proposed regulations.
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