Regulatory Impact of CMS on Medicare Advantage Insurers
A study from Brown University School of Public Health delves into the regulatory actions by federal entities, especially the Centers for Medicare & Medicaid Services (CMS), focusing on Medicare Advantage insurers. Utilizing records obtained through a Freedom of Information Act request, the research examines enforcement actions from 2010 to 2023, assessing the impact of monetary penalties for regulatory breaches like delays in approving covered care.
The investigation highlights CMS's enforcement strategies, such as contract termination and suspension of enrollment or marketing activities, alongside financial penalties. Financial penalties were the predominant action, making up 87% of the 844 actions over thirteen years. The study found that while fines peaked at about $6.50 per beneficiary in 2019, they were often smaller in other years, prompting questions about their efficacy in altering insurer behavior.
Zihan Chen, the study's lead author, emphasizes the importance of understanding CMS's use of enforcement tools in regulating a significant segment of federal health expenditure. Given that Medicare Advantage plans cover over half of the Medicare population, beneficiary complaints have led to increased scrutiny of CMS oversight.
Research reveals that enforcement often aligns with CMS audit cycles, indicating a tendency for violations to emerge during audits rather than ongoing monitoring. Moreover, enforcement patterns show that plans with lower quality ratings and higher proportions of low-income or minority members faced more suspensions or terminations, impacting vulnerable groups.
Associate professor David Meyers notes that CMS’s reliance on modest financial sanctions might arise from factors like resource constraints and insurer resistance. The study underscores the need for strong enforcement to manage Medicare Advantage program complexities, given its significant effects on healthcare spending and patient care.
Overall, the findings stress the importance of continually evaluating CMS's regulatory approach to ensure equitable and effective oversight of the Medicare Advantage landscape.