The New Era of Medicare Advantage: How Health Plans Need to Step Up Their Game

The buzz around the shift of healthcare from volume to value-based care doesn’t look like it’s going to stop anytime soon. Nevertheless, people have been talking about it for a decade now, and I am just beginning to see a significant change in the space.

Right now, healthcare is more than just prescribing medicine or providing care to the patients based on their episodic requirements. It is about how every element that is associated with the field touches the lives of many and affects them for good. Moreover, some of the most affected are senior citizens. Our health underpins our happiness and is the foundation of our economic advancement; however, with the globally aging baby boomers, the challenges with the growing number of diseases need to be addressed.

The modern perspective of care delivery and the rise of Medicare Advantage in the healthcare field

It wouldn’t be wrong to say that the basic structure of healthcare delivery is slowly transforming with the definition of value-based care. This transition has been substantial, especially from the payer and the health plan perspective. In 2017, more than 40% of Aetna’s healthcare spending was centered on a value-based care payment model, and this number is expected to increase to 75% by 2020.

On September 1, 2015, the CMS Innovation Center announced the Medicare Advantage Value-based Insurance Design (VBID) model. The initiative allowed health plans administering Medicare Advantage plans to offer targeted benefits to enrollees who have certain chronic conditions. The main goals were similar to the current major areas of focus:

• To enhance patients’ overall health
• To prevent the avoidable, costly care processes
• To reduce the costs for the Medicare enrollees

The history of MA plans and the background of the Value-based Insurance Design model

Since 2017, the CMS VBID Test model began testing the ability of Medicare Advantage plans to offer a better cost sharing or additional supplemental benefits to the enrollees with selected chronic conditions. CMS tested the VBID model in 7 states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee.

In 2018, CMS updated the model to include Alabama, Michigan, and Texas and also allowed for VBID interventions for dementia and rheumatoid arthritis.

In 2019, CMS updated the model to include organizations in 15 additional states including California, Colorado, Florida, Georgia, Hawaii, Maine, Minnesota, Montana, New Jersey, New Mexico, North Carolina, North Dakota, South Dakota, Virginia, and West Virginia, and focuses on:

1. Chronic conditions other than those previously established by CMS
2. Revising the existing CMS chronic condition category to focus on a subset of the existing chronic condition

A case study to depict a holistic Medicare Advantage care model

Consider an example. Jane Rodriguez is a 67-year-old patient who has been suffering from Type 2 diabetes. She has Medicare Part A and Part B coverage. Additionally, she has an interesting Medicare Advantage Special Needs Plan (SNP) with built-in prescription drug coverage. Her Medicare Part B premium is $134.50, and the premium for her MA-SNP plan is $23.

During one visit, Jane’s doctor advised her to increase her physical activity considering some troubles she had in the past with her drug interactions.

With the additional coverage, she has been able to access a qualified care manager who created specific care plans to suit her medical and social conditions. Along with that, she has also been able to grab some impressive discounts on her medications with experts’ advice on ways to adopt a healthier lifestyle. With the coverage, she has also been able to improve her health over a period of just 2 months.

Why are Medicare Advantage plans so popular among the Medicare population?

Approximately one out of every three people eligible for Medicare chooses to enroll in a Medicare Advantage plan, and for good reason. MA plans have gained much attraction in recent years because of the following reasons:

• MA plans offer additional coverage not covered by traditional Medicare Part A and Part B
• Some of the plans offer no-cost premiums
• MA plans feature out-of-pocket spending limits
• Members of an HMO Medicare Advantage plan will utilize a primary care physician who can coordinate their care
• MA plans offer all medical and hospital benefits including prescription drug coverage in a single plan

Moving from ‘generic care’ to ‘focused senior care’: A step into the future of care delivery

Medicare Advantage plans have long attracted senior citizens, as these plans often include benefits such as vision and dental care coverage. Such benefits are not covered in the traditional Medicare schemes. Since the Affordable Care Act of 2010, the enrollment in Medicare Advantage has increased, and 14 new companies have stepped into the domain of MA plans for 2019.

Source: Kaiser Family Foundation, Centers for Medicare and Medicaid Services

The graph above indicates that the status of senior care in the United States is changing. The focus has been shifting from a ‘reactive care delivery’ to ‘preventive care delivery.’ With the growing changes in the healthcare space, it is important that every member of the patient population moves towards self-management. CMS predicts that 83% of the beneficiaries will have lower premiums in 2019 as compared to the past year.

Stepping into the future of Medicare Advantage plans

Based on the fact sheet released by the CMS a few days back, an exhaustive list of Medicare Advantage health plans innovation will be tested in the Value-based Insurance Design (VBID) model for the CY2020 application period.

The model will be designed in such a way to:

• Reduce the Medicare program expenditures,
• Enhance the quality of care, and
• Improve the coordination and efficiency of the health care service delivery

The changes in the VBID model are aimed at contributing to the modernization of Medicare Advantage by increasing the choice that patients have while choosing their plans, and with that, lowering the cost and improving the quality of care for Medicare beneficiaries.

For the CY2020 VBID application period, eligible Medicare Advantage organizations may apply to test the following interventions:

• Value-based Insurance Design by condition, socioeconomic status, or both
• Medicare Advantage and Part D Rewards and Incentives Programs
• Telehealth Networks
• Wellness and Health Care Planning

The growing trend of ‘step theory’ in the Medicare Advantage plans

One of the most crucial aspects for a payer is to reduce the chances of avoidable expenditures. Step theory could be a major benefit in the cause. It is practice generally used by payers that sometimes requires the patients to try medications that are less costly instead of going for an expensive treatment. It is often called the ‘fail-first’ theory because the patients have to fail to get better with less costly drugs before stepping up for the other options.

Beginning in January 2019, the private Medicare Advantage insurers have been allowed to implement step theory policies for drugs that patients receive from the providers such as infusions. This would imply that a patient’s infusion might not be the payer’s first choice to treat the disease, rather they might require to try a cheaper alternative that might have or have not worked for the patient in the past.

How Medicare Advantage powers value-based initiatives

Medicare Advantage plans have always been at the forefront of driving value-based care in the US healthcare space. Along with the additional Medicare advantages, it provides multiple benefits to patients.

With the new initiatives by CMS, providers would need to focus on driving smarter clinical interventions to succeed in the changing landscape of the MA plans. However, the question still remains: What can providers do to deliver the best results in the field of MA plans?

• Data-driven insights into the patient population

Healthcare organizations should be provided with real-time insights into their patient population. With the right data at their disposal, they would be able to plan better interventions and suggest the right courses of action for their patients.

• Interventions based on socioeconomic and financial conditions

As per the new regulations, healthcare organizations can test non-uniform benefit designs to provide reduced cost-sharing or additional supplemental benefits for the Medicare Advantage enrollees based on their socioeconomic or financial condition. In this way, they would be able to target the right audience considering the non-clinical aspects instead of providing care based on clinical data alone.

• Smarter patient engagement with a strong telehealth network

Healthcare organizations can increase the patients’ access to telehealth services by allowing plans to propose the use of telehealth services instead of promoting in-person visits. Not only is this helpful in reducing the utilization cost in the network, but would also be easier for patients.

• Comprehensive care management across the network

One of the required components for all the Value-based Insurance Design participating MA plans is to ensure a timely, coordinated approach to wellness and health care planning. With an efficient care management approach, providers can offer the best care services to not just the MA enrollees, but also other patients in the network.

The road ahead

The fact that the US healthcare is evolving and the change has been more focused on delivering holistic, centered care to every patient is proof of the growing ‘consumerism’ in the healthcare space. Patients now want more facilities to be included in their care services. The success or failure of any organization or plan is based on the level of satisfaction that they help their patients achieve.

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Join Team Innovaccer this HIMSS 19 at booth #2715 at Orange County Convention Center in Orlando, FL February 11-15, 2019 to hear how you can deliver more patient-centric care and become a part of the leaders of value-based care.