Abe Sutton and MA Reform

From think tanks to federal agencies, health policy in the U.S. is often shaped by voices we don’t always see in the headlines. Abe Sutton, a key figure in the Trump Administration’s Medicare Advantage (MA) reform efforts, is one of them. Let’s take a look at who he is and what he believes to be the key to improving MA.

Sutton currently serves as Director of the Center for Medicare and Medicaid Innovation (CMMI), which is responsible for testing and rolling out new ways to change how care is delivered and how healthcare dollars are spent. He’s also one of several members of the Trump Administration that have previously served at the Paragon Health Institute, a conservative policy think tank.

So, what does this actually mean for healthcare in practice?

Abe Sutton isn’t new to the topics that the Centers for Medicare & Medicaid Services (CMS) governs. Before his current role, he co-authored a piece in Health Affairs on Medicare Advantage (MA), a program that now covers more than half of the eligible Medicare population using what is called risk adjustment. One of his biggest concerns?

Overpayments!

As a quick overview, the government pays MA plans a fixed amount per month per beneficiary to provide benefits to that person. However, the amount per beneficiary is based on something called risk adjustment. The government pays the MA plan more money to cover MA patients who are sicker or have more complex health needs than the national average.

The theory is that sicker patients require more care, and MA plans need additional resources to provide it. However, some have suggested that an issue with this risk adjustment program is that the system relies on formulas, or models, to predict how sick someone might be, increasing costs.

At CMMI, Sutton is helping support the implementation of the current model called V28, the 28th version of MA’s risk adjustment framework that is being phased over three years. This model aims to improve payment accuracy by more accurately reflecting patient health status and resource utilization, ideally, reducing any excess spending that may have previously existed under past models. And this isn’t just about cutting costs; Sutton emphasizes that it’s about greater financial accountability for providers and patient empowerment.

However, the V28 model is facing critiques, one being that it raises documentation standards, requiring greater coding precision, which can pose an added administrative burden for providers. Another critique is the potential for decreased revenue for both providers and health plans, particularly those participating in value-based care arrangements.

The full rollout of V28 is expected by 2026. Between now and then, CMS will be testing, evaluating, and fine-tuning how the model impacts provider payments and plan behavior.