Nursing home operators can expect to see a lot more regulatory activity in the next few months, with rules and regulations being finalized prior to a potential presidential administration change, with that administration taking office in 2025.
A slew of proposed and finalized rules were issued by the Centers for Medicare and Medicaid Services (CMS) specifically related to Medicare Advantage (MA), and LeadingAge officials shared in a Thursday meeting that most of these could be positive developments for nursing homes. The pending and new rules will help streamline prior authorizations and promote interoperability between providers and insurance plans.
“If the administration changes next year, anything that was approved in the last half of the year is fair game for the new administration to take a step back,” said Nicole Fallon, vice president of integrated services and managed care public policy for LeadingAge. The association hosted this network meeting to run through policies related to MA.
Fallon discussed briefly the 2025 Medicare Advantage (MA) proposed rules on payment and regulatory changes, including expansion and getting some parity on appeal rights for MA enrollees. The agency on Wednesday proposed a payment increase of 3.7% for MA and Part D, or more than $16 billion from 2024 to 2025, but MA plans say it’s more of a net reduction with risk scores not being met.
Members learned about a number of proposals around dual eligible beneficiaries, or those that are eligible for both Medicaid and Medicare, detailed in a previous Skilled Nursing News article.
“We’re supportive of [dual eligibles] getting a more integrated approach to their care … CMS is also looking for more transparency around some of the supplemental benefits that are being offered by the MA plans,” said Fallon.
LeadingAge offered suggestions to CMS in terms of how the agency can approach supplemental benefits in MA plans, specifically studies that compare MA to Medicare fee-for-service (FFS), or traditional Medicare.
“The only information out there comparing Medicare Advantage to fee-for-service is research and studies that are financed by the health plans themselves,” said Fallon. “Of course, those studies tend to say that they’re the best thing since sliced bread, that they do all these great things. We would like something that’s perhaps a little more unbiased.”
MA plans aren’t paying providers enough and the advocacy group has suggested to CMS to change the low payment tied to these plans.
“CMS needs to understand that these are inadequate payments. If they continue to be inadequate, we’re going to have access issues,” said Fallon. “We’re already starting to see this huge threat … around a number of hospitals and systems are starting to push back and say [they’re] not going to contract with any MA plans. Of course, the hospital’s in a slightly different position than we are.”
Prior authorization changes and interoperability
MA regulatory changes published in 2023 and affirmed mid-January focused more on coverage determinations, prior authorizations, the use of algorithms and artificial intelligence (AI) – items that have a direct impact on what nursing home operators do, she said.
Prior authorization changes are set to take effect in 2026, she said.
CMS finalized timelines for prior authorizations, she said, with plans required to turn around expedited or urgent requests within 72 hours and standard service and item requests within seven days.
“That’s one area where we certainly had pushed back and hoped that they would align more closely with some legislation that’s been going around, that would shorten those times even further,” said Fallon. “The final rule didn’t come out that way on the prior authorization piece.”
Another change – CMS will begin to collect data around MA plan prior authorization processes and practices, she said.
“They’re going to require the plans to list all the services and items that require product prior authorization, what percentage of their prior authorization requests are approved or denied, appealed, overturned,” said Fallon. “These are things we’ve been pushing for, because we think it’s the only way we can identify where there are true problems and begin to address them.”
A note for operators – CMS changes to interoperability and prior authorizations isn’t exclusive to MA, Fallon said. It also applies to Medicaid and CHIP programs, Medicaid managed care and some health insurance exchange plans.
MA payment updates and APIs
LeadingAge touched on the advance notice calendar year 2025 Medicare Advantage payment update as well, released by the federal agency on Wednesday. CMS is proposing a 3.7% increase for MA plans, but the plans themselves have said it’s effectively a cut because the increase doesn’t match the increase in risk scores by 3.86%.
“The [MA] plans are framing this as a net reduction, 0.16%,” Fred Bentley told Skilled Nursing News. Bentley serves as managing director for ATI Advisory’s post-acute and long-term care and senior living practice.
“What they’re excluding is the fact that their payments are risk adjusted, or they’re adjusted to reflect the underlying acuity and complexity of their members. What happens is, when plans do that coding, they end up getting higher payments,” said Bentley.
In the grand scheme of things, revenues will likely increase by about 3.7% and isn’t too dissimilar to what leaders have seen of MA plan payment changes in prior years. Generally, it’s a higher net than what the space saw last year, said Bentley.
MA plans will also have to put together an application programming interface (API), Fallon said, which is designed to allow electronic health records to “talk to” the MA plan’s records, making the process more efficient.
These APIs would be put into practice in 2027, she said.
“One of those APIs that the plans in this final rule have to implement is a prior authorization API,” said Fallon. “CMS hopes to achieve greater efficiency in that exchange of information, making it a little bit easier for [SNF operators] to exchange data and documentation that [they] have to provide to the plans for these prior authorizations.”
Other APIs would focus on MA plans exchanging information with patients, plans exchanging information with other plans when a beneficiary changes coverage, she said.
LeadingAge is working behind the scenes with electronic health record vendors in anticipation of API implementation.