CMS’ Jonathan Blum sets sights on Medicaid, Medicare Advantage reform


The Centers for Medicare and Medicaid Services is sharpening its focus, and has recently taken several steps to make state Medicaid programs stronger, increase its oversight of Medicaid Advantage programs and boost health equity efforts.

Jonathan Blum, the agency’s principal deputy administrator and chief operating officer, discussed these priorities with Modern Healthcare while he was in Chicago this week for the 2023 Healthcare Information and Management Systems Society conference.

Here’s what to know.

Redeterminations will strengthen Medicaid

The pause by states on removing individuals from Medicaid during the COVID-19 pandemic in exchange for increased federal funding will make the public benefits program stronger, Blum said. States have invested in technology and fine-tuned their existing eligibility systems, as they resume eligibility checks for the first time in two-and-a-half years.

“The process has forced states to build better structures that will last much longer than this process,” he said. “Eligibility processes have always been a huge challenge for states. We will have stronger Medicaid programs once we finish.”

At the federal level, CMS fine-tuned to automatically populate a user’s information from their Medicaid file to an exchange application. By better connecting technology systems between Medicaid and exchange plans, Blum said he hopes to avoid consumer gaps in coverage.

States should follow Illinois’ lead

More states should follow Illinois’ lead and pursue amendments that allow public schools to bill Medicaid for health services, Blum said.

CMS this week approved a state plan amendment to award Illinois additional Medicaid funding to pay for behavioral health, physical therapy, preventive care and other health services for all students enrolled in Medicaid or the Children’s Health Insurance Program, not just those with an Individualized Education Program . CMS has granted similar amendments to 11 other states’ Medicaid programs.

The state plan amendment also strengthens ties between the Medicaid program and schools as redeterminations resume, Blum said.

“Schools have much more accurate address, location data than insurance companies,” he said. “It will help with other political goals we have. It’s a really cool development.”

CMS is ready to crack down with ‘corrective action’

CMS will also be watching for outliers among states that process Medicaid eligibility applications too quickly or slowly, as well as where there are large numbers of individuals who do not qualify for other coverage, where consumers report long call center wait times and more. In those cases, the agency can, and will, pause states’ ability to remove individuals from Medicaid until they refine their processes, Blum said.

“Our teams are poised and ready to use that authority if necessary,” he said.

More oversight is coming

One of CMS’ primary goals is to tinker with its program integrity processes to reflect the reality that the majority of individuals are enrolled in managed care arrangements, either through Medicaid or Medicare Advantage plans. “Our oversight needs to be shifting towards managed care when historically we’ve been doing that through a traditional, fee-for-service system,” Blum said.

That’s the perspective that led CMS to finalize the Medicare Advantage risk-adjustment data validation rule, which allows the agency to recoup previous overpayments to insurers. It’s what also led CMS to revamp its Medicare Advantage risk-adjustment program, although the changes will be phased in over three years.

“We don’t disagree,” Blum said, in response to criticism that CMS’ final Medicare Advantage rules do not go far enough in curbing insurers’ excessive profits. “But we also understand changes need to be carefully calibrated so plans can adjust, so we don’t disrupt premiums and cut benefits rapidly.”

Revamped star ratings will boost health equity

CMS retooled the Medicare Advantage star ratings program to incentivize insurers to bridge health equity gaps. The agency removed the “reward factor” that gave insurers a bigger bonus if they consistently performed well over time. In its place, CMS this month finalized a plan to establish a health equity index to incentivize plans to build better access to services in healthcare deserts, and offer policies in disadvantaged areas in an effort to improve population health.

“I would challenge anyone to provide definitive evidence that more enrollment in managed care organizations, more enrollment in the Medicare Advantage program, drives better savings, better outcomes and better quality of care,” Blum said. “It may happen at an individual level, but I would challenge anyone to provide definitive evidence that it happens at the full, population level.”


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