Medicare Advantage Plans: More but Not Less

The regulation, 42 C.F.R. § 422.101, contains requirements for benefits in a Medicare Advantage plan.

Over the last few years, we have had several segments on Monitor Monday exploring whether Medicare Advantage plans are required to follow the Two-Midnight rule. Guests have reported on conversations with the Centers for Medicare & Medicaid Services (CMS) officials in which the CMS official indicated that the agency did not believe that the two-midnight rule applied to Medicare Advantage plans. 

Now, I’ve never been a party to those conversations, and I want to emphasize a really important point.  What the CMS folks say in a phone call isn’t the law. The cornerstone of administrative law is that for a regulation to be valid there must be a notice and comment period. There can’t be a “secret” rule. Private calls between one person and CMS may not be exactly secret, but those calls certainly are not public.  There is no chance that a phone call between an agency employee and an outsider qualifies as public notice and comment.

While I’ve certainly called government officials to help understand a confusing provision, or offer suggestions and changes, and I welcome the fact that government employees are open to public communication, that doesn’t mean that the information they impart during those calls suddenly becomes authoritative or binding. But there is a relevant regulation that did go through notice and comment. 42 C.F.R. § 422.101 contains the requirements for benefits in a Medicare Advantage plan. The regulation begins “except as specified in [two inapplicable regulations], each MA organization must meet the following requirements:

(a)  Provide coverage of, by furnishing, arranging for or making payment for, all services that are covered by Part A and Part B of Medicare…

(b)  Comply with –

(1)  CMS’s national coverage determinations;

(2)  General coverage guidelines included in original Medicare manuals and instructions unless superseded by regulation in the part or related instructions…”

The first question is whether a hospital stay is a service covered by Part A or Part B of Medicare?  Obviously, it is. This regulation therefore requires Medicare Advantage to provide coverage. It goes on to say that the plan must comply with the general coverage guidelines that are included in the original Medicare manuals and instructions unless they’ve been superseded by a regulation that applies to Medicare Advantage plans. I will say with confidence that there is no regulation that says Medicare Advantage plans needn’t follow the two-midnight rule. 42 CFR 422.101 seems straightforward. Under it, I don’t see a cogent argument that Medicare advantage plans can simply make up their own determination for inpatient coverage. 

This conclusion is bolstered by an FAQ submitted by Christine, a Monitor Monday listener. That FAQ explains that MA plans have the discretion to be more generous with benefits than the Medicare program, but MA plans are not allowed to be more restrictive than the Medicare program. You may find that FAQ here.