H.R. 3467: To amend title XVIII to reform the Medicare Advantage program.

This bill proposes several changes to the Medicare Advantage program under the Social Security Act, specifically affecting how Medicare Advantage plans are operated, funded, and how beneficiaries are enrolled. Here are the main components of the bill:

Reforming Medicare Advantage

Requirement to Use Capitated Payments

The bill mandates that starting from January 1, 2028, Medicare Advantage plans must pay for benefits on a capitated basis, meaning they pay a set amount per enrollee per month, regardless of the number of services used. There are exceptions for certain plans available in previous years and specialized plans for special needs individuals.

Payment Modifications

• Reducing Blended Benchmark: It modifies the calculation of the payment rates for Medicare Advantage plans to include a specific adjustment starting in 2028.
• Risk Adjustment Modifications: From January 1, 2028, risk adjustments for beneficiaries will only consider diagnoses documented through face-to-face or telehealth visits and not through chart reviews or health risk assessments.
• Elimination of Quality Benchmark Increases: The bill specifies that starting from 2028, there will be no increases to quality benchmarks for certain Medicare Advantage plans.
• Stop-Loss Payments: The bill introduces stop-loss payments for plans that incur significantly higher costs than expected, starting in 2028. These payments are based on audited encounter data.

Automatic Enrollment and Plan Change Limitations

Beginning January 1, 2028, the bill requires automatic enrollment of Medicare beneficiaries in the lowest premium Medicare Advantage plan available to them, with the option to opt-out. Additionally, if someone enrolls in an MA plan, they will not be able to switch plans or revert to traditional Medicare for three years, unless they face a hardship event.

Required Inclusion of Hospice Care

Hospice care will be mandatory for inclusion in Medicare Advantage plans starting in plan years beginning on or after January 1, 2028.

Stark Exception for Certain Services

The bill also adds a new exception to Stark Law provisions regarding certain health services provided under Medicare Advantage plans, specifically for durable medical equipment and covered drugs dispensed under part D.

Relevant Companies

• AET (Aetna): A major provider of Medicare Advantage plans, likely to be affected by payment structure changes and automatic enrollment provisions.
• ANTM (Anthem): As a Medicare Advantage provider, the proposed reforms may influence its premium strategies and service offerings.
• CNC (Centene): A significant player in the Medicare Advantage market that may need to adjust its plans in response to new requirements on payments and risk adjustments.
• UNH (UnitedHealth Group): Being one of the largest Medicare Advantage insurers, this bill may necessitate changes in their operations and payment models.