On August 18, CMS took a further step, addressing a concern expressed by insurers that providers and provider-affiliated organizations are steering people eligible for Medicare and/or Medicaid coverage to individual marketplace plans to obtain higher provider payment rates. CMS issued a “request for information,” asking for comments on the extent and nature of this practice and on what can or should be done about it. CMS also sent letters to all Medicare-enrolled dialysis facilities expressing the concerns found in the information request.
CMS is concerned that health care providers are nonetheless steering individuals eligible for Medicare or Medicaid coverage to individual market coverage by paying their premiums or waiving cost-sharing. The payment rates offered by private plans are allegedly sufficiently higher than Medicare or Medicaid rates that providers can cover enrollees premiums and waive cost-sharing obligations and still do better than they could relying on Medicare or Medicaid payment. Insurers believe, however, that the effect of this behavior is to introduce very high-cost enrollees into the individual market risk pool, raising claims costs for insurers and ultimately premium rates for other enrollees. Indeed, United sued a dialysis provider in federal court in early July challenging this practice.