As the Center for Medicare & Medicaid Innovation (CMMI) advances new payment models and care delivery systems, it should place more emphasis on Medicare Advantage, according to SCAN Group CEO Dr. Sachin Jain.
The sheer number of beneficiaries enrolled in MA warrants a ramped-up approach to innovation within the program, Jain said. More than 28 million were enrolled in MA during 2022, about 48% of the total Medicare population, according to Kaiser Health Foundation. The program also accounted for 55% of total Medicare spending last year.
“Given that probably more than 50% of Americans are going to get their health care through Medicare Advantage, there’s an onus on [CMMI] to drive greater focus on introducing new models for Medicare Advantage,” Jain told Hospice News. “I think there are lots of opportunities to better serve Medicare and Medicaid beneficiaries through managed care, I think it’s just a matter of enabling entities that operate in the space to test some of these new approaches without penalty.”
Some of these approaches could involve “technical” edits to the program, particularly around areas like risk adjustment and discharge programs, or broader-scale tests of new models for specific subpopulations or new ways of organizing and structuring care, according to Jain.
He recently detailed some of his views on how CMMI can interface with MA in his Forbes column.
Jain has a history with both Medicare Advantage and CMMI.
He currently leads California-based SCAN Health Plan, a nonprofit MA organization that covers more than 270,000 members. This year, the company announced plans to combine with Care Oregon, a Medicaid-focused payer organization.
Jain was also at the table in the early days of CMMI, established by the Affordable Care Act to incubate and test new payment models. He helped lead the center’s launch within the U.S. Centers for Medicare & Medicaid Services (CMS).
Medicare Advantage-oriented CMMI demonstrations could help fine-tune aspects of the program as well as design new ways to support patients’ changing needs, Jain told Hospice News.
Calls to reform MA grew louder during 2022. The Senate Finance Committee released a report late in the year indicating that third-party marketing companies have used deceptive practices to enroll beneficiaries in MA plans.
This followed an investigation by the U.S. Department of Health & Human Services Office of the Inspector General (OIG) that found that prior authorization methodologies among some plans led to denials of medically necessary care.
One emerging point of contention is the practices around risk adjustment. MA plans use statistical methodologies to predict a beneficiary’s health care utilization and associated costs and apply the data to adjust capitated payments. Generally, higher risk scores mean higher payments.
Risk scores for patients enrolled in MA plans were nearly 10% higher than they would have been for a beneficiary with similar health status in traditional Medicare, leading to about $12 billion in excess costs, according to Medicare Payment Advisory Commission (MedPAC) estimates.
While these data cast doubt on MA’s stated objective of reducing costs, the story behind these numbers is more complex than a price tag.
In fee-for-service systems, reimbursement is based on the volume and types of services provided for example. Calculations of reimbursement rates within MA include factors related to the patient’s health status that can complicate comparisons between the two models. Aspects related to medical coding also play into these determinations.
CMMI demonstrations could help resolve some of the questions around risk adjustments, according to Jain.
“The risk adjustment model has come under attack, because I think there’s concerns that it can be gamed, or that there could be potentially over-coding,” Jain said. “And while I think that there’s some real-time opportunities now to do things to improve, to o create a greater tie into the actual conditions and state of the patient, which can be better ascertained through data and maybe advanced uses of electronic health record data.”