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Medicare Advantage Plans Seek Effective Risk, Quality and Care Strategies to Battle Senior Care Challenges

By Jay Baker

To survive and thrive in the era of value-based care, more healthcare professionals are focusing on optimizing care for the baby boomer generation, a population that is driving unsustainably high rates of healthcare spending and a shift away from original Medicare plans toward growing reliance on Medicare Advantage (MA) plans.

Specifically, seniors obtain Medicare benefits from original Medicare or an MA plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO). With the former, the government pays for Medicare benefits. With MA plans, the coverage is offered by private companies approved by Medicare. MA plans provide all Medicare Part A (hospital insurance) and Medicare Part B (medical insurance) coverage.

 Stable and Dynamic

Based on trends of insurers entering and exiting the program, the MA market could best be described as “stable yet dynamic”—roughly the same numbers of plans enter/exit the program each year. Furthermore, data shows that commercial insurers remain interested in competing for MA beneficiaries.

Recent research shows that MA plan successes are having a trickle-down impact on broader health care delivery and payment models. In fact, fee-for-service Medicare spending has trended down in markets with high MA plan participation, which means that doctors and other medical professionals operating in markets with high MA penetration may be adapting their practice patterns to align with MA plan strategies for curbing costs. In turn, this helps to reduce use and costs for all their patients—including those enrolled in traditional Medicare and commercial/employer-sponsored plans.

Ultimately, effective Medicare reform—based on market principles of transparency, accountability, competition, and consumer choice—could inspire significant changes across the broader healthcare market.

Optimizing the Opportunity

The most effective MA plans look at the full spectrum of their membership and apply an end-to-end solution.  When done effectively and efficiently, and combined with payment reform, this approach enhances care coordination using analytics, in-home care, retrospective solutions and care management to substantially improve outcomes.

Value-based contracting generates cost efficiencies and improves clinical outcomes. To achieve sustainability, MA plans and risk-bearing entities must adopt innovative quality and risk adjustment programs to meet growing demand for effective care strategies. For instance, MA plans can gain clinical insight from better clinical data to further enhance member care.

Solutions to curb increasing costs of senior care

Medicare beneficiaries in fee-for-service Medicare are normally required to pay multiple premiums and deductibles and face an array of cost-sharing arrangements for benefits and services from physicians, pharmacies, and hospitals.

In contrast, when a Medicare beneficiary enrolls in a MA plan they benefit from a more comprehensive, integrated health plan that includes richer benefits and solid catastrophic coverage.

Adjustment Model

Risk adjustment is used to calibrate payments to health plans based on the relative health of the at-risk populations. If insurers are limited in the extent to which premiums can vary by health status or other factors that are associated with health spending, risk adjustment can help ensure that health plans are appropriately compensated for the risks they enroll.

Most claims in fee-for-service Medicare are paid using procedure codes, which offer little incentive for providers to record more diagnosis codes than necessary to justify ordering a procedure, while MA plans have a financial incentive: The current risk adjustment model was introduced to ensure that their providers record all possible diagnoses because higher enrollee risk scores result in higher payments to the plan.

Consider two ways to optimize an MA plan:

  • Physician record review (PRR) is a two-stage retrospective chart review process from a certified coder and board-certified physician.
  • Prospective health assessments (PHA) can provide a robust view of patients and their care needs. Providers can also rely on PHAs to lay the groundwork for developing more accurate reporting documentation, improving patient engagement and compliance, enhancing disease management, and reducing utilization.

Providers are empowered to identify gaps in care and manage patients by taking a full-spectrum, end-to-end approach. This improves provider efficiency and patients reap the greatest benefit by being guided toward more preventive care and self-management early in the care process.

Expanded benefits

CMS recently expanded how it defines the “primarily health-related” benefits that private insurers are allowed to include in their MA policies, with insurers including these extras on top of providing the benefits of traditional Medicare, such as healthy food, transportation to doctor’s appointments, home delivery of meals and air conditioners for asthmatics. This is great news for MA beneficiaries because it gives them the kind of supplemental benefits that can empower them to be more self-sufficient and experience improved quality of life.

CREDIT: Jay Baker is Senior Vice President, Quality and Risk Adjustment Solutions, Advantmed, LLC. Advantmed recently developed a white paper that discusses federal policy and the economics of Medicare. Advantmed, LLC is a healthcare solutions company dedicated to partnering with health plans, provider groups and risk-bearing entities to optimize risk adjustment and quality improvement programs. Its integrated and technology-enabled solutions improve health plan financial results and offer insights on health plan members.