Key Official Weighs Two Alternatives to Fee-for-Service Default
Chris Klomp, who serves as director of Medicare and deputy administrator at the Centers for Medicare & Medicaid Services, disclosed to STAT that his team is actively studying the viability of models that would place beneficiaries by default into either a private Medicare Advantage plan or an accountable care organization, such as those operating under the Medicare Shared Savings Program.
In Klomp’s view, both alternatives would be preferable to the current system, which defaults new enrollees into traditional fee-for-service Medicare. Under any new model, beneficiaries would retain the ability to opt out and choose a different coverage arrangement. Klomp also holds the role of senior advisor to Health and Human Services Secretary Robert F. Kennedy, Jr.
More Than Half of Seniors Already Choose Medicare Advantage
At present, original Medicare remains the fallback for seniors who do not actively select a plan. Despite this, more than half of all Medicare-eligible seniors now voluntarily choose a Medicare Advantage plan.
Proposal Echoes Project 2025 Policy Blueprint
The proposal reflects a broader ideological shift and aligns closely with the conservative Project 2025 policy framework, which has already influenced several HHS decisions, including the implementation of Medicaid work requirements.
Project 2025 has been vocal in its support for expanding Medicare Advantage, noting that the program provides beneficiaries with a wide range of competitive health plan choices, richer benefits than traditional Medicare, and has consistently earned high marks for quality of care.
The blueprint is explicit in one of its core directives: “Make Medicare Advantage the default enrollment option.”
Project 2025 Outlines Broader Medicare Transformation
Beyond default enrollment, Project 2025 outlines a broader transformation of the Medicare program. Recommendations include empowering beneficiaries with direct control over their Medicare spending, scaling back regulatory oversight of MA plans, replacing the existing payment formula with a competitive bidding structure, overhauling risk adjustment models, and lifting restrictions on benefits such as prescription drugs, hospice services, and medical savings accounts.
Impact on Rehabilitation Billing
For rehabilitation providers, this shift could create additional administrative challenges.
Rehab services frequently require detailed documentation and prior authorization. With more MA patients, practices may experience:
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- Increased authorization requests
- More frequent documentation reviews
- Higher risk of claim denials
- Slower reimbursement timelines if requirements are not met
Because Medicare Advantage plans are managed by private insurers, they may enforce stricter utilization controls than traditional Medicare.
Cost Concerns Loom Despite Value-Based Framework
The document also advocates for shifting original Medicare toward value-based payment arrangements, though it offers little detail on how that transition would unfold. Medicare Advantage already operates as a value-based system, where reimbursement is decoupled from the sheer volume of services rendered — though studies have consistently shown that the program costs the federal government more per beneficiary than traditional Medicare.
Looking Ahead
The possibility of automatic enrollment reflects a broader shift toward simplifying healthcare access while expanding Medicare Advantage participation.
For providers, the takeaway is clear: the role of Medicare Advantage is growing, and adapting to its requirements is essential. By strengthening billing processes and preparing for increased administrative demands, healthcare organizations can stay ahead of these changes and maintain a strong financial position.
