Medicare Advantage Growing and Improving
Open Enrollment for Medicare just began on October 15th and will continue until December 7th. So we thought this would be a good time to reflect on the enrollment growth and quality improvements of the Medicare Advantage (MA) program. As the MA program has experienced greater than expected growth, the program has become under greater scrutiny by public policy makers, elected officials and patient advocacy groups.
Last year, Health Affairs published an article comparing the rapidly growing Medicare Advantage program with Traditional Medicare. Evidence from forty-eight studies showed that in most or all comparisons had the following key findings about Medicare Advantage:
More preventive care visits
Fewer hospital admissions and emergency department visits
Shorter hospital and skilled nursing facility lengths-of-stay
Lower health care spending
In addition, Medicare Advantage outperformed Traditional Medicare in most studies comparing quality-of-care metrics.
Enrollment Trends
Medicare Advantage growth has outperformed most analyst’s expectations. Since President Bush converted the Medicare+Choice (M+C) program into Medicare Advantage (Part C) growth has been very good due to availability of plans, lower out of pocket costs, improved outcomes, and in many cases, retirees are encouraged through lower premiums to choose an MA plan. Retirees, or people covered under their employer’s retirement plans, currently represent about a third of all Medicare Advantage participants.
CBO projects that MA will hit a penetration of 61% in 2032.
Medicare is growing too. Baby boomers became eligible for Medicare in 2011. At that time there were 51 million beneficiaries, today there are over 65 million beneficiaries and by 2030 there will be over 75 million beneficiaries which is a 50% increase in beneficiaries in a little over 20 years. Right now, while the Medicare population is growing, due to the surge of boomers, it is also getting younger. In the next 10 years as the boomers age the Medicare population (expressed in median age) will become older. Currently, 49% of Medicare enrollees are between the age of 65 and 74 and 37% are 75 and older. In the next 10 years a greater percentage of Medicare enrollees will be over 75. Actuaries, therefore, are expecting higher utilization and higher per capita costs. This has created an additional pressure for cost containment.
According to the Census Bureau, in 1970 only 10% of the population were covered by Medicare. In 2010, that number grew to 13%, but after the baby boomers became eligible in 2011 it has grown to 17% and expected to grow to 20% in 2030, then level off for the upcoming decades.
Medicare Advantage: Creating Value
Cost and Utilization Management
Many government officials, CMS administrators and policy experts believe the coordinated approach of managed care organizations will make ACOs and Medicare Advantage plans more important in achieving the goal of greater value (improved outcomes at lower costs).
In an interview with Managed Care Magazine, Zeke Emanual, bioethicist, and the policy maker that is sometimes referred to as the architect for Obamacare, said the following about Medicare and its future.
“We know that there are huge problems with Medicare fee for service.”
“We have to stop thinking that Medicare fee for service is like some nirvana. We know that there are huge problems with Medicare fee for service. Everyone talks about how it’s administratively cheap. The fact is, it’s not as cheap as portrayed. There are lots of hidden administrative costs in there. Second of all, there are a lot of things that, because it’s so administratively lean, it doesn’t do, like update the RVU system, on a regular basis and revalue suspect codes. There’s plenty of fraud in that system that private payers are better at picking up than Medicare is.
The other thing I would say is that we know that patients, especially patients with chronic illness, do not have good coordinated care on Medicare fee for service. They’re often seeing seven to 10 doctors. I would say one thing that managed care does better in the private system is coordinated care. Or at least [it] has the potential to coordinate care better and in some cases does coordinate care better [in Medicare Advantage].”
Quality Management
CMS uses HEDIS style clinical outcome measurements and patient satisfaction surveys to evaluate the “quality” of the contracted plans. Five stars is considered excellent. If a plan receives three stars or lower the plan is flagged as low-performing. Last year CMS reported 90% of MA enrollees are enrolled in plans with four stars or more. However, the increase in plans with higher star ratings is likely to drive more Medicare spending into the MA program because MA plans get bonuses for reaching quality ratings of four or more stars.
According to a report from the Kaiser Family Foundation the annual bonuses to MA plans quadrupled from 2015 to 2021, with plans getting $11.6 billion in bonuses in 2021 compared to $3 billion in 2015. “The rise in bonus payments is due to both an increase in the number of plans receiving bonuses, and an increase in the number of enrollees in these plans,” Kaiser’s analysis said.
The most salient points are that Medicare is growing and Medicare Advantage is growing too as Medicare expands. Medicare Advantage enrollees have been increasing since its inception nearly two decades ago. In addition, Value-based payment models, patient risk scoring and improved measurement and management of clinical outcomes has led to better cost management while quality has continued to improve.
The growth in Medicare Advantage enrollment does place additional pressure on medical groups that care for Medicare Advantage members. Staffing to support the growth is a challenge for medical groups that offer high quality care. A key staffing issue is hiring enough Certified Risk Coders (CRCs). CRCs play a vital role assisting providers with compliant coding per the Medicare risk adjustment model. High quality medical groups are now adopting AI-powered risk adjustment software like ForeSee Medical ESP to assist providers and coders with the challenges related to the Medicare risk adjustment model. ForeSee Medical’s healthcare natural language processing offers a 10x speed advantage during the chart review process. Less coders are required to manage the increasing number of Medicare Advantage members and providers can spend more “face time” with patients during an encounter. For medical groups that help manage Medicare Advantage members, software like ForeSee Medical ESP is becoming a “must have” tool to keep up with the growth in enrollment in Medicare Advantage plans.
Blog by: The ForeSee Medical Team