On Thursday, October 3, 2019, President Trump signed an executive order that aims to expand the Medicare Advantage program. Medicare Part C, commonly known as Medicare Advantage, is administered by private insurers in which CMS pays the health insurer on a fee per beneficiary basis and the insurer in turn pays providers a negotiated rate for the health care services they provide. This program is in contrast to Parts A and B of the traditional Medicare program in which the Federal Government pays providers directly for covered services rendered to beneficiaries on a fee-for-service basis. During a speech at The Villages retirement community in Florida on Thursday, the President explained that his plan will improve Medicare and asserted that it is overall a better option than the “Medicare for all” policies supported by several of the 2020 Democratic presidential candidates.
The executive order, entitled “Protecting and Improving Medicare for our Nation’s Seniors,” calls for the Secretary of HHS to propose new Medicare Advantage benefit structures and plan designs, and to encourage innovations in supplemental benefits and telehealth services. It also directs the Secretary of HHS to create a new payment model that adjusts supplemental Medicare Advantage benefits to enable its beneficiaries to more directly share in the savings from the program, including monetary rebates.
Furthermore, the executive order directs HHS neither to encourage nor promote the traditional Medicare fee-for-service program over Medicare Advantage. The executive order suggests instead to modify Medicare fee-for-service payments “to more closely reflect the prices paid for services in Medicare Advantage and the commercial insurance market.” In addition, the executive order tasks the Secretary of HHS with reducing burdensome regulatory billing requirements, and to conduct a review of differences in reimbursements between physicians and non-physician practitioners to ensure that items and services are appropriately reimbursed for the work performed.
The executive order also aims to: (i) improve access to providers and plans by adjusting network adequacy requirements to factor in market competition and access to telehealth services; (ii) update the approval, coverage, and coding process of innovative products, such as medical devices and advances in telehealth services, so that they can be brought to market faster; (iii) reward care through site neutrality; (iv) provide seniors with better access to quality care and cost data; and (v) combat fraud, waste, and abuse in the Medicare program.
On Friday, October 4, CMS Administrator Seema Verma said that the health care plans that Democratic candidates are proposing “would eviscerate the Medicare program” and “put seniors in a situation where they’re waiting in line for their care.” Instead, Administrator Verma concluded that President Trump’s plan will “strengthen and protect the Medicare program, make it better for seniors.”
*Special thanks to Hayley White, Law Clerk and District of Columbia Bar license pending, for her assistance in preparing this description of the President’s executive order.