FutureFocus October 31, 2018: Medicare Advantage Plans 2019: Testing New Payment Models and Care Delivery

Lisa Remington

This week’s FutureFocus, provides the insight into Medicare Advantage Plans in 2019. An increase in the number of plans, geographic reach and widening supplemental benefits increase the need for a continuum of care model. What are the key supplemental benefits offered in 2019? How do MA plans manage post-acute providers to lower the cost of care and better outcomes? We examine answers to these questions.

Lisa Remington, President, Remington Health Strategy Group

By: Lisa Remington, President, Remington Health Strategy Group, Publisher, The Remington Report

It’s the financing structure and increased flexibility of Medicare Advantage (MA) that creates new testing for payment and care delivery innovations. In 2017, Medicare Advantage plans had nearly half (49.5%) of their healthcare dollars in alternative payment models (APMs), compared to 38.3% of dollars in traditional Medicare.

Medicare Advantage plans receive per member per month payments that are adjusted for each enrollee’s age, location, and health status. If the cost of care for enrollees is less than their capitated payments, the plan is able to keep the savings.

Plans are eligible for bonus payments if they demonstrate that they are delivering high quality care, as measured by the Centers for Medicare & Medicaid Services (CMS) through the Star Ratings program. It is this underlying incentive structure that makes Medicare Advantage plans such prime drivers for testing payment and care delivery innovations that align the interests of private payers, patients, and CMS.

"Recent changes to the Medicare Advantage program are presenting plans with opportunities to meet the needs of beneficiaries with high-risk health conditions," said Sean Creighton, a vice president at Avalere. "The trend of more Medicare Advantage plans covering more supplemental benefits to meet the needs of patients positions the program well for continued enrollment growth."

CMS expects 36% of Medicare beneficiaries will have an MA plan next year and that enrollment will increase by 11.5% in 2019 to 22.6 million people.

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