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Tag: Medicare Advantage

MedPAC Got It Wrong (pt 3)

By GEORGE HALVORSON

This is the third part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage. Part 1 is here. Part 2 is here. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt

Risk status and RAF

What is on the MedPac radar screen and what keeps their attention and what actually takes up several long portions of the annual report this year is the other factor that changes the payment levels to the plans — the risk status of their enrollees.

The capitation levels that are paid to the plans are affected very directly by the health status levels of the actual enrollees.

Risk levels for the members set and change the payment levels for the plans. The very first capitation programs didn’t factor in relative risk status for the members, and it was possible for some care sites to make major profits on capitation just by enrolling healthier than average people and by being paid an average cost level for each area for the people they enrolled.

That initial payment process has evolved very intentionally into having diagnosis-based cost factors that attempt to link the health status of the members and a fair payment level for the plans. The plans identify for the risk filing process the diagnosis levels for the members and their payment levels as plans are directly affected by the risk levels they report for their members.

People have had some concern about whether some parts of that coding process have been done badly, incorrectly or with purely avaricious intent.

There have been significant levels of concern expressed about whether the plans might be able and willing to produce and present inaccurate and distorted information in the process. That alarm was triggered in part by the fact that some of the plans made getting that information into their annual filings a high priority and some were more successful than others in that process.

It is good to have accurate diagnosis information.

We actually should as a nation and a health care macro system want to see an expansion of our data base and our medical records on basic levels of diagnostic information.

As a nation and as a macro care system we should definitely want to have full diagnosis information for each patient. Care can be better when caregivers have the right diagnosis for all of their patients.

How CMS  has changed Risk Adjustment

CMS just did a brilliant thing and completely eliminated the filing system and process for risk coding and data.

The CMS Hierarchical Conditions Categories Risk Adjustment Model was just killed. CMS just took the system that has created the vast majority of concerns and churn about the issues of coding intensity and shut it down.

It no longer is a factor for any risk scores. CMS will still look at the relative risk levels of patients but will get that information completely from patient encounter filings and direct patient information and not from any plan filings or reports.

An entire industry of organizations working to enhance risk scores just became obsolete and irrelevant.

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MedPAC Got It Wrong (pt 2)

By GEORGE HALVORSON

This is the second part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage.Part 1 is here. The final part will be published on THCB later this week. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt

We clearly do have significant levels of quality data about the MA plans because we have extensive levels of quality programs and recognitions that exist in MA . Those programs get better every year — and MedPac should be reporting and even celebrating each year how many additional plans are achieving high scores in those areas as part of their report.

MedPac should be describing and celebrating progress that is being made in that five-star space and the members of the Commission don’t seem to know that information exists.

In fact, they sink lower than that pure denial in their report this year. They actually say in this year’s report that they have deep concerns about the quality of care for MA and they say clearly that they have no useful data to use for thinking about how MA is doing relative to quality issues.

Saying that there is no quality data about the plans is another MedPac falsehood (MPF) and, as they so often are, that particular falsehood is disproved quickly and easily by their own documents. In the final section of this year’s report where they were asked by Congress to do a report on the quality of care in the Special Needs Plans. The MedPac writers achieve that explicit goal in large part by using the easily available HEDIS quality data for those patients and for the other patients in the plans and by comparing both sets of numbers to relevant populations.

So this year’s report has that set of NCQA quality data for the MA plans included in it. MedPac is using it now even though they say no data exists and that means that’s another falsehood to say it doesn’t exist.

We know what the quality data of the five-star program is and we know what the HEDIS Scores are for the MA plans, and we also know how much MA costs us in every county because the bids give us that information.

We know that the plans bid below the average county fee-for-service Medicare costs in every county and we know what the total costs are by person for each county.

We need to know what the real costs are and we need to look at how we get the very best use of the Medicare dollar. MedPac should make it a priority to figure out how to get the best use of the Medicare dollar using both bids, capitation, and various kinds of ACO-related payment processes. ACOs all create better care than traditional fee-for-service Medicare, and the people who are critical of ACOs for not saving enough money should rethink their priorities. They should be happy with any use of the Medicare dollar that gives more for the member and patient

If an ACO that has team care and patient centered data flows just breaks even on costs relative to fee-for-service Medicare, that should be celebrated and supported as being a much better use of the Medicare dollar.

We should make patients our top priority. ACOs make patients their priority. MA Plans clearly set up benefits and care practices around the patient’s the top priority. Only fee-for-service Medicare completely lets the patient down by being rigid on benefits, rigid on service, and making costs a higher priority than people’s lives and doing that badly and inefficiently. We should be working through MedPac each year to see which approach to buying care actually gives us the very best use of our Medicare dollar.

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MedPAC Got It Wrong (pt 1)

By GEORGE HALVORSON

This is the first part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage. The rest will be published on THCB later this week. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt

MedPac just did their annual report on Medicare Advantage (MA) and they were extremely wrong on several key points.

The MedPac staff has a long tradition of being critical of MA, and they also, unfortunately, have a long tradition of being inaccurate, misleading, and consistently negative on some key points for no explicable or easily understood reason.

They achieved a new low this year by spending more than 20 pages of the report warning us all in detail about the upcoming cash flow distortions and coding abuses that they say are coming from a risk adjustment model and system that actually no longer exists in 2022 as a functioning system for our Medicare program — and they are also continued their distortion about Medicare overpayment of the plans by running an artificial cost number that functions only to deceive and not to inform and by using what is essentially a fake news number several times in the report.

Coding and Risk Adjustment

CMS has now officially canceled and retired the CMS Hierarchical Conditions Categories Risk Adjustment Model that has been used for almost two decades to calculate risk for plans. It is dead and completely gone for 2022 — and MedPac explained bitterly for more than 20 pages why it was a damaging approach and they somehow did not mention that it was now gone.

CMS has some very good thinking people who brilliantly took that whole set of coding linked issues off the table by making the system that was being potentially abused simply disappear.

MedPac wrote more than 20 pages in this year’s official report about MA complaining about that exact process and system and they didn’t mention that it was gone or explain why it was important to not have that data flow create the risk level information that we will now be using to get diagnostic information into the system.

The new approach for determining patient risk levels is fraud proof. There is no way to put wrong data into the information flow that they are now going to use to see and determine which patients are diabetic and which have heart disease or who has drug abuse issues for the risk discernment processes.

The impact on low income Medicare patients & union members

MedPac also had a major content deficit in their report and managed to leave the most important aspects of the work being done now by the plans to help offset some of the damage done to too many Americans who have been damaged by social determinants of health issues for far too long in their lives. MedPac also completely failed to report and discuss the important reality of the fact that we have now reached the point where two-thirds of our lowest income Medicare beneficiaries are all voluntarily in the MA plans.

They also left out of their report the fact that a significant number of union trust funds and a significant number of employer retirement programs that had made significant promises of retirement health care benefits to their retirees over the past decades are actually having those commitments kept, met, and even enhanced with the relatively new employer-sponsored MA plans that work directly with employer settings.

Five million people who might have had their retirement health care programs bankrupt, underfunded, or at serious risk have found a very strong safety net in the MA program — and MedPac does not think that development was important to understand and probably celebrate.

Anyone looking at the future politics and funding of the MA program will find both that overwhelming support for MA from our lowest income people and from our most well-connected employer retirement funds to be good and important to understand.

MedPac missed every bit of that agenda and set of accomplishments in this year’s report.

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Matthew’s health care tidbits: #Does Medicare Advantage Save the Taxpayer Money?

Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

For my health care tidbits this week, the controversy about Medicare Advantage is getting louder and louder. There’s no question that it results in lower out of pocket payments for its members than traditional FFS Medicare. Medicare Advantage members use fewer services, and their care appears to be better “managed” –then again FFS Medicare’s “members” are barely managed at all. 

But the big question is, Does Medicare Advantage save the government money? Critics (notably ex CMS veterans Berwick & Gilfillan) claim that risk adjustment games played by the private plans who run Medicare Advantage have cost up to $200bn over 10 years. Medpac (the independent body that advises Congress) estimates that “Medicare spends 4 percent more for MA enrollees than it would have spent if those enrollees remained in FFS Medicare” and go on to say “In aggregate, for the entire duration of their Medicare participation, private plans have never produced savings for Medicare”. However data from the Medicare Trustees and other research from ACHP & the trade group Better Medicare Alliance suggests that Medpac’s analysis is incorrect and that Medicare Advantage saves the government about 9% per enrollee.

THCB ran a long piece (pt 1pt 2) about Medicare Advantage from former Kaiser Permanente CEO George Halvorson earlier this year, and a related one from current Permanente Federation CEO Richard Isaacs. But it’s much more nuanced than that. J Michael McWilliams has long piece on Health Affairs Forefront trying to capture the various strands of the argument. His conclusion? “The substantial subsidies MA receives are largely responsible for the extra benefits and have more than offset savings from any efficiencies, posing a net cost to Medicare and complicating assessments of MA’s added value.”

Meanwhile CMS has just changed the most controversial aspect of risk adjustment (which is the most controversial part of Medicare Advantage) by banning the plans from doing it, and only allowing providers to be involved.

Whether any of this is going to change CMS regulations or wider government policy regarding MA payments is less certain. CMS is currently dealing with its replacement for the even more controversial Direct Contracting (now called ACO REACH). But Medicare Advantage is the most profitable part of private health insurance and has many knock on effects for care services and technology. So I’ll be watching this space and you should too!

Medicare Advantage Poses Challenges to Health Care Cost-Effectiveness and Equity

BY NIRBAN SINGH AND AMY HELBURN

Introduction

Medicare Advantage (Advantage), originally conceived in 1997 during the Clinton Administration as ‘Medicare + Choice’, has progressively grown and become an established health insurance option for those 65 and older. According to data collected and aggregated by the Kaiser Family Foundation, Advantage has more than doubled in total enrollment between 2010 and 2021. In 2021 alone, 26 million people were enrolled in Medicare Advantage, which is over 40% of the total Medicare beneficiary population. In 2021, 85% of Medicare Advantage growth was concentrated among for-profit health plans, with UnitedHealthCare, Centene, and Humana leading the way.

Overall, the Medicare Advantage market is dominated by UnitedHealthCare, Humana, and CVS Health/Aetna, with this trio responsible for over half of all Advantage beneficiaries.As of October 2020, about 80% of Advantage enrollees directly purchased individual policies, while employer-sponsored Advantage enrollment has been steadily growing, comprising 18.1% of the Advantage market overall in 2020. Analysis from The Chartis Group indicates that half of all Medicare beneficiaries will be enrolled in Advantage plans by 2025, so the trio of existing leaders in providing Advantage plans may continue to innovate and profit immensely while new market entrants may grow their footprint rapidly, in response to growing demand.

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What the Pandemic Taught Us About Value-based Care

By RICHARD ISAACS

You’ll recall that we ran a long piece (pt 1, pt 2) about Medicare Advantage from former Kaiser Permanente CEO George Halvorson earlier this year. Here’s a somewhat related piece from the current head of The Permanente Medical Group about what actually happened there and elsewhere during the pandemic–Matthew Holt

The COVID-19 pandemic has provided important lessons regarding the structure and delivery of health care in the United States, and one of the most significant takeaways has been the need to shift to value-based models of care.

The urgency for this transformation was clear from the pandemic’s earliest days, as shelter-in-place orders caused patient visits to brick-and-mortar facilities to plummet. That decline dealt a financial blow to many fee-for-service health care providers, who are paid per patient visit, treatment or test performed — regardless of the patient’s health outcome.

Prepaid, value-based health care systems, on the other hand, have demonstrated that they are better equipped to respond to a continually evolving health care landscape. Because they are integrated, with a focus on seamless care coordination, and they are accountable for both the quality of care and cost, these systems can leverage technologies in different ways to rapidly adapt to major disruptions and other market dynamics. Priorities are in the right place: the patient’s best interests. Value is generated by delivering the right level of care, in the right setting, at the right time.

Because value-based care focuses on avoiding chronic disease and helping patients recover from illnesses and injuries more quickly, it has the promise to significantly reduce overall costs in the United States, where nearly 18% of gross domestic product was spent on health care before the pandemic — significantly more than comparable countries. That figure rose to nearly 20% in 2020 during the pandemic.

While providers may need to spend more time on implementing new, prevention-based services and technologies, they will spend less time on managing chronic diseases. And thanks to the preventive approach of value-based health care organizations, society benefits because less money is spent managing chronic diseases, costly hospitalizations and medical emergencies.

Value-based organizations drive additional societal benefits. They understand that building trust with patients requires cultural competency — tailoring services to an individual’s cultural and language preferences. During the pandemic, building trust was especially important with underserved communities, where mistrust of health care systems is prevalent.

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Medicare Advantage Is a Superior Program (Part two)

By GEORGE HALVORSON

Former Kaiser Permanente CEO George Halvorson has written on THCB on and off over the years, most notably with his proposal for Medicare Advantage for All post-COVID. He wrote a piece in Health Affairs last week arguing with the stance of Medicare Advantage of Don Berwick and Rick Gilfillan (Here’s their piece pt1, pt2). Here’s a longer exposition of his argument. We published part one last week so please read that first. This is part two – Matthew Holt

Medicare Advantage is better for the underserved

The African American and Hispanic communities who were particularly hard hit by those conditions and by the Covid death rates have been enrolling in significant numbers in Medicare Advantage plans.

The sets of people who were most damaged by Covid have chosen in disproportional numbers to be Medicare Advantage members. Currently 51 percent of the African Americans on Medicare are in Medicare Advantage plans and more than 60 percent of the Hispanic Medicare members will be on Medicare Advantage this year.

That disproportionate enrollment in Medicare Advantage surprises some people, but it really should not surprise anyone because the Plans have made special,  direct, and inclusive efforts to be attractive to people with those sets of care needs and have delivered better care and service than many of the new enrollees have ever had in their lives. 

The Medicare Advantage plans have language proficiency support competencies, and language requirements and capabilities that clearly do not exist anywhere for fee-for-service Medicare care sites. A combination of team care,  language proficiency, and significantly lower direct health care costs for each member has encouraged that pattern of enrollment as well.

The $1600 savings per person has been a highly relevant factor as more than twice as many of the lowest income Medicare members — people who make less than $30,000 a year — are now enrolled in Medicare Advantage plans.

Medicare Advantage’s critics tend to explicitly avoid discussing those enrollment patterns, and some of the most basic critics actually shamelessly say, with what must be at least unconscious malicious intent in various publications and settings, that the Medicare Advantage demographics for both ethnicity and income levels are a clone for standard Medicare membership. Those critics have said that  there is nothing for us to learn or see from any enrollment patterns or care practices based on those sets of issues.

Many people who discuss Medicare Advantage in media and policy settings generally do not focus on or even mention the people in our population who most need Medicare Advantage — the 4 million people who are now enrolled in the Special Needs Plans.

Special Needs Plans for Dual Eligibles

The Special Needs Plans take care of low-income people who have problematic levels of care needs and who very much need better care.

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Medicare Advantage Is a Superior Program (Part one)

By GEORGE HALVORSON

Former Kaiser Permanente CEO George Halvorson has written on THCB on and off over the years, most notably with his proposal for Medicare Advantage for All post-COVID. He wrote a piece in Health Affairs last week arguing with the stance of Medicare Advantage of Don Berwick and Rick Gilfillan (Here’s their piece pt1, pt2). Here’s a longer exposition of his argument. We are publishing part one today with part two coming soon – Matthew Holt

The evidence for Medicare Advantage being a superior program compared to standard fee-for-service Medicare is so overwhelming that anyone who cares about actual Medicare Patients or who cares about the financial future of Medicare should be strongly supporting having as many people as possible enrolled in that program as soon as we can effectively make that happen.

Compared to fee-for-service Medicare, Medicare Advantage has better benefits.

Compared to fee-for-service Medicare, Medicare Advantage has a better tool kit at multiple levels.

Medicare Advantage has team care, connected care, and electronically supported care processes — and we know beyond any debate or dispute that those advantages exist for Medicare Advantage over standard fee-for-service Medicare because fee-for-service Medicare does not pay for those sets of services and literally labels it billing fraud if a caregiver who provides team care in a patients home to prevent a congestive heart failure crisis or to keep a life threatening and function impairing asthma attack from happening sends a bill to standard Medicare for those services.

The superiority of Medicare Advantage is beyond question.

Standard fee-for-service Medicare has no quality care processes, no quality reports and no quality standards or expectations at all. Standard Medicare actually has absolutely no quality data and does not hold any provider accountable for the quality of the care they deliver.

Medicare Advantage has an extensive quality agenda and tracks more than 40 categories of quality and service at the plan level. Medicare Advantage plans build continuously improving programs around those Five-Star priorities and measures, and we know from our current reporting that even during Covid, the percentage of Medicare Advantage patients with cardiovascular disease who are currently on statin therapy went up from 80.86% of patients a year ago to 83.36% this year.

The ratings by the Medicare Advantage members for customer service by their plans went from 90.56% a year ago to 90.87% this year.

That is not a big improvement but having satisfaction numbers that start out that high actually go up during Covid days is an accomplishment and it is one of the reasons why we should be encouraging people to join the plans and its why fee-for-service Medicare is a measurably inferior approach for so many people.

Standard Medicare does not have a clue about who is getting their statin Medications and they officially don’t care.

In fact, some of the fee-for-service Medicare doctors and care sites who are paid only by the piece for care from the standard Medicare program actually often make more money when care fails, because when a patient has a major asthma crisis or a congestive heart failure crisis, that negative outcome for a patient can generate multiple medical fees and it can too often trigger a $10,000–$20,000 total additional cash flow to the caregivers whose care sites failed that patient by not helping improve the health of the patient before the crisis was triggered.

Why is Medicare Advantage’s purchasing system better?

Medicare Advantage plans are paid by Medicare by the month for each patient and they are not by the piece for each item of care.

Because Medicare Advantage plans are paid by the month for each patient, and must, by contract, provide complete care to each patient, it makes extremely good sense for the plans to help patients in ways that prevent asthma attacks and that prevent congestive heart failure crisis, and that avoid and help reduce the levels of blindness and amputations for their diabetic patients that can too easily happen to those patients if you don’t manage and guide that care.

The Medicare Advantage approach for all of those categories of care is obviously far better for the patients than the fee-for-service Medicare inadequacies in care.

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#Healthin2Point00, Episode 157 | The phrase is “Takeout Speculation”!

Today on Health in 2 Point 00, Jess and I gossip about the wild rumor that UnitedHealthcare is acquiring Amwell. On Episode 157, we discuss Lark raising $55 million in a Series C along with a deal with Anthem to be their preferred DPP provider, Medicare Advantage plan Clover going public with a valuation of $3.7 billion, NOCD raising $12 million in a Series A providing specialized CBT and virtual OCD treatment, Cerebral raising $35 million in a Series A for its comprehensive digital mental health offerings, and Express Scripts adding to their digital health formulary with offerings targeting things like women’s health, tobacco cessation, muscle and joint pain, and more. —Matthew Holt

We Need to Fix COVID-Damaged Care Sites and Give the Country Better Care and Universal Coverage in the Process

By GEORGE HALVORSON

The COVID crisis has shown us clearly that major portions of the American care system are extremely dysfunctional and some are now badly broken. We need to put in place a cash flow for American health care that can help our care sites survive and ultimately thrive, and we need to put that approach to save the sites in place now because a vast majority of hospitals and medical practices are badly damaged and some are financially crippled and even destroyed by their response to the crisis.

We have learned a lot in the COVID crisis that we need to use now in building our next steps and our collective response to the crisis.

The COVID crisis has shown us all that our care sites do not have good patient data, do not have good patient linkages, usually do not have team care of any kind in place, and most are so dependent on current piecework fee volumes from patients that they quickly collapse financially when that volume is interrupted.

We should be on the cusp of a golden age of care delivery that uses all of the best patient support tools to deliver continuously improved care — and we now know that the piecework way we buy almost all of our care today will keep that golden age from happening for the vast majority of American patients for the foreseeable future until we change the way we buy care.

We need to buy care in a way that both requires the use of those tools and rewards caregivers and care teams when they use them.

We need a dependable cash flow for care to anchor that process.

We are unlike most of the rest of the industrialized world in not having a dependable cash flow now to buy care. We rely on a hodgepodge and mishmash of unlinked, unaligned and uncoordinated payment sources now and that lack of coordination in payment creates a vast and damaging lack of coordination in the delivery of care.

We can make a huge improvement in that entire process and we can give our health care system a stable and functionally useful future cash flow by becoming a much more highly skilled purchaser of coverage and care. We need a flow of money to make that happen.

We actually can create that flow relatively quickly and fairly easily by imposing a payroll tax on every employee that exactly copies the approach we use now for our Social Security payroll tax process and then using that money in a health care purchasing pool to buy health coverage for every person who is not on Medicaid.

The numbers work.

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