Will hospitals regret their Medicare Advantage divorce?

Sachin Jain, MD, has a message for critics of Medicare Advantage: You’re right.

This message, of course, comes with a big asterisk.

Dr. Jain, who runs one of the nation’s largest nonprofit Medicare Advantage companies, is a proponent of fixing the problems with the 26-year-old federal program rather than dismantling it, an idea floated in recent weeks by a former director of the Center for Medicare and Medicaid Innovation.

“Any public policy program will create unintended consequences,” said Dr. Jain, CEO of the SCAN Group. of Becker. “What I would say to anyone who is critical of the program is, you’re right, but let’s fix this.”

Some of the loudest critics of Medicare Advantage are hospitals and health systems. As the Medicare open enrollment period gets underway, a growing number of facilities across the country will not accept some or all MA patients in the new year, citing excessive prior authorization denial rates and slow payments from insurers . In their denials, some systems even pointed to allegations of billing fraud among MA carriers made by the federal government.

“It’s become a game of delay, denial and non-payment,” Chris Van Gorder, president and CEO of San Diego-based Scripps Health, said earlier. of Becker. “Providers will have to get out of capitation at full risk because it just doesn’t work – we’re the bottom of the food chain and the food chain doesn’t feed itself.”

In late September, Scripps began notifying patients that it was ending Medicare Advantage contracts for its integrated medical groups, a move that will affect more than 30,000 seniors in the region. Mr. Van Gorder said the health system faces a $75 million loss this year on MA contracts that will expire Dec. 31, including for SCAN members.

“If other organizations are going through what we’re going through, it’s going to be a short period of time before they start to wander or get out of Medicare Advantage,” he said. “I think we’re going to see this trend continue and accelerate unless something changes.”

Dr. Jain took the opposite position. He noted that more than half of the nation’s 65 million older adults are enrolled in Medicare Advantage, and more than half of those participants have an annual income of less than $25,000.

“[Dropping MA] is a short-term trend that’s going to be very counterproductive for these big health systems,” he said. “You’re a for-profit system that says it’s no longer going to accept the insurance that low-income people actually have. We’ll see how that goes. did that affect you.”

Total MA enrollment is expected to be 33.8 million in 2024. Nearly 4,000 Medicare Advantage plans are offered this year, and MA members spend an average of $2,434 less on out-of-pocket costs and premiums per year than traditional members of Medicare.

“The fantasy that all these people are going to leave Medicare Advantage plans and then join Medicare supplement policies is just that,” Dr. Jain said. “Then critics will say, ‘We need to fix traditional Medicare.’ Good luck with that. I always remind people that traditional Medicare didn’t have drug coverage until 2004.”

Whether short-term or sustained, the trend is clear across the country. From rural independent hospitals to large urban health systems, Medicare Advantage contracts are increasingly being shunned. In October, the Nebraska Hospital Association issued a report detailing how Medicare Advantage is “failing patients and endangering Nebraska hospitals,” 33 percent of which are not accepting MA patients. Bend, Ore.-based St. Charles Health System even encouraged its older patients not to enroll in private plans entirely, although it eventually renegotiated contracts with four Medicare Advantage carriers.

“I would say that hospitals with less Medicare Advantage have made the wrong choice because those health systems traditionally haven’t done the work to get paid appropriately through coding and risk adjustment, and they haven’t necessarily made the investments to succeed in the program,” Dr. Jain said. “They’re stuck in the middle or doing the opposite. Anyone who says we need new policies to move to value-based care is failing to recognize the fact that Medicare Advantage is probably the best tool we’ll ever have in the industry to actually move to value-based care. of values.”

In April, CMS issued a final rule intended to streamline prior authorizations for Medicare Advantage and Part D, including ensuring compliance with traditional Medicare coverage guidelines. The agency proposed another rule requiring MA carriers to approve emergency preauthorizations within 72 hours and within seven days for standard requests. The proposed rule would also require payers to publicly report prior authorization denial rates and provide specific reasons for denied requests.

Despite tensions with some health systems, the Medicare Advantage program has bipartisan support in Congress and a 95% quality satisfaction rating among enrolled members in 2023. Many systems also operate their own MA plans and continue to expand their coverage under the program. Some are partnering with payers, grocers or other systems to launch plans for 2024.

Livonia, Mich.-based Trinity Health, which recently added its home state to the list where it operates its master’s program, MediGold, also offers the plan in Connecticut, Ohio, Idaho, New York and Iowa.

“Everyone is competing in this space quite aggressively, and so are we in each of our regions,” Trinity COO Ben Carter told investors on Oct. 19. “We continue to develop MediGold by investing and growing it.”

“If you’re in the business of taking care of low-income people, I think it’s potentially heartless to drop Medicare Advantage the way some of these health systems are doing,” Dr. Jain said.

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