On October 3, President Trump signed an Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors (EO), directing the Department of Health and Human Services (HHS) to develop various proposals to “protect and improve the Medicare” program as an alternative to the Medicare for All Act.

The EO aims to:

• Expand Medicare Advantage (MA),
• Encourage innovative plan designs, and
• Reduce regulatory burdens on providers

These policies, if implemented, could have a major impact on Medicare Advantage, Medicare generally, and the health care entities that provide various services and products to the people enrolled in these plans.

Medicare Advantage Policies

An increasing number of seniors eligible for Medicare are enrolling in MA plans operated by private insurers. The Administration already has expanded services offered under MA plans to cover additional supplemental benefits that basic Medicare does not, including, inter alia, limited dental, hearing, and vision coverage; gym memberships; transportation to medical appointments; and home-delivered meals (for more information on recent changes to supplemental benefits, click here).

The EO requires HHS to propose regulation within one year to provide seniors with more choices including by: (i) reducing barriers that limit adoption of Medicare medical savings accounts; and (ii) creating a payment model that adjusts MA supplemental benefits to allow seniors to more directly share in cost savings that MA plans generate, including monetary rebates creating incentives to seek high value care.

HHS also has one year to propose regulation to adjust network adequacy requirements for MA Plans to take into account the competitiveness of a state’s market, including whether those states have certificate of need laws, and consider in network adequacy enhanced access through telehealth services and other technologies.

In addition to premium concerns in MA, HHS must develop a report within 180 days identifying approaches to modify Medicare fee for service (FFS) payments to more closely reflect prices paid in MA and the commercial market. HHS must study: (i) shared savings and competitive bidding; (ii) use of MA-negotiated rates to set FFS Medicare rates; and (iii) novel approaches to information development and sharing that may enable markets to lower cost and improve quality for FFS Medicare beneficiaries.

Encouraging Innovation

The EO also requires HHS to propose regulatory changes to bring innovative products, including medical devices and telehealth services, to the market faster. HHS must devise a way to streamline approval by the FDA and CMS’s coverage and coding processes. The EO directs HHS to adopt regulations and guidance to clarify the application of coverage standards, including the evidentiary standards CMS uses in applying its reasonable-and-necessary standard, the standards for deciding appeals of coverage decisions, and the prioritization and timeline for each National Coverage Determination process in light of changes made to local coverage determination processes.

The EO also aims to encourage innovation by asking HHS to modify the Value-Based Insurance Design (VBID) payment model to remove any disincentives for MA plans to cover items and services that make use of new technologies that are not covered by FFS Medicare. CMS currently is using this model to test various MA service delivery and/or payment approaches.

Quality and Cost Data

The EO directs HHS to propose regulations within one year to provide seniors with more quality care and cost data to provide opportunities to make more informed choices. In addition, HHS is directed to disseminate Medicare claims data to health providers regarding practice patterns that may pose undue risks to patients or about outlier practice patterns. This may subject providers to additional data collection and reporting.

Fraud and Abuse

The EO also generally calls for HHS to propose changes in the Medicare program to reduce fraud, waste, and abuse; reduce burdens on providers and eliminate inefficiencies; propose other improvements to Medicare enrollment processes; and remove barriers to private contracts that allow Medicare beneficiaries to obtain the care of their choice and facilitate the development of market-driven prices.

What’s Next?

It remains to be seen how these policies will be enacted by HHS, but it will be important to watch for these regulations in the next year as they are developed given their broad impact. The EO calls on HHS to make changes in a number of areas requiring many proposed regulations to be developed within the year. Given the continued focus on healthcare heading into an election year, these proposals may generate significant interest and commentary from stakeholders and politicians alike.