In this episode, we are joined by Michelle Keller-Eiler, Clinical Review Specialist at BESLER, to discuss what the growth of Medicare Part C means for providers.Learn how to listen to The Hospital Finance Podcast® on your mobile device.
Highlights of this episode include:
- Background on Medicare Advantage plans and what some of the Pros and Cons are of these plans
- Details behind the growing popularity of Medicare Advantage plans in the US and ways in which CMS has made enrollment easier and more personalized
- Why provider-based companies are offering their own Medicare Advantage plans
- What providers need to know as Medicare Advantage continues to grow
- And more…
To view the transcript of this podcast episode, click HERE
In a previous episode of our award-winning podcast, Michelle Keller-Eiler walks us through the essentials of Transfer DRG revenue recovery for Medicare Advantage discharges.
What Medicare Part C growth means to providers
Not only is the enrollment of Medicare Advantage growing, so are the services being offered, number of plans available and the attention the providers need to give these plans.
What is Medicare Advantage
Medicare Advantage (MA), also known as Medicare Part C, is a “bundled” plan offered by private companies approved by Medicare. These plans include benefits under Medicare Part A, Part B, and many times Part D, as well as additional coverages such as vision, dental, and hearing. MA plans cover all services covered by traditional Medicare. Medicare Advantage is an option available to all Medicare Part A & B enrollees as long as they live in the service area of the MA plan they want to enroll and do not have End-Stage Renal Disease (ESRD). If enrolled in an MA plan, the enrollee may not have a Medigap policy.
The Pros and Cons of Medicare Advantage
MA plans are “all-in-one” coverage covering inpatient, outpatient, prescription, dental services, etc. MA plans have become very affordable. The costs vary by plan and can include a monthly premium.
An enrollee must also determine if the monthly premium includes the cost of their Part B coverage as some plans pay part/all of this premium while others do not. MA plans set their own deductibles and copays, need for referrals, and provider networks.
It is key for members to ensure their physicians are in-network to avoid paying exorbitant out-of-pocket costs leading them to change providers. In addition to the plans covering all needed services, another key benefit is the out-of-pocket maximum set by specific plans. This is different from Medicare in that once the member reaches their out-of-pocket max, they no longer need to pay their deductible or co-insurance, but do need to continue their monthly premium.
Expansion of Medicare Advantage enrollees
Projected growth of MA enrollment was projected to be an 11.5% increase over 2018. Based on information provided by CMS, for July 2019 there were nearly 22.4 million MA (HMO/PPO) enrollees and another 700,000 in another type Medicare Advantage program (PACE/Cost/MSA/SNPs) for a total of nearly 23 Million Medicare Advantage enrollees.
The reasons behind this increase are multifaceted:
- The Baby Boomer generation is now reaching retirement age and Medicare eligibility and they are accustom to a commercial, employer sponsored HMO/PPO plan – with networks, referrals, copays, and out of pocket maximums. Staying with a similar plan, offered by a familiar company such as United Healthcare or Aetna is familiar and comfortable.
- The idea of an all-in-one insurance, expanded benefits, and low monthly premiums is attractive including the fact that enrollees do not need to worry about finding an additional Medigap plan.
- CMS is committed to making the selection process easier for beneficiaries through eMedicare, a redesign of the Medicare Plan Finder (MPF) tool. This expanded online service will deliver on a more personalized experience. Improvements include a wizard that shows options and helps users choose which type of coverage may be best for them, an out of pocket cost (OOPC) estimator, and easier to understand language.
Medicare Advantage plan availability
New companies are joining the Medicare Advantage arena and existing companies continue to expand offerings all over the country. United Healthcare, Humana, and BCBS continue to account for the largest percent of enrollment and additional plans are being added every year.
Based on a CMS listing by state, the number of MA plans available by state varies from a low of five plans in Wyoming to 391 plan options in Florida. In New Jersey there were sixty plans available in 2019. Even Guam and the US Virgin Islands now have MA plans available.
Expansion of Medicare Advantage offerings
With recent CMS rulings, plans have expanded flexibility in their supplemental benefits offerings to some members. It is up to the plans on who they offer these services to, such as people with certain health conditions.
These expanded services can now include transportation, non-skilled home services, home safety equipment, home-based palliative care services, meals, nicotine replacement, and preventative programs such as for diabetes.
These offerings could continue to change with additional rulings and time for plans to further incorporate the benefits.
What do providers need to know about Medicare Advantage plan changes?
With the growing population of MA enrollees, and the expansion of plan offerings, providers need to carefully construct their contracts. MA contracts were at one time an addendum onto the related commercial contracts. These contracts need careful evaluation as the MA plans follow some Medicare rules but have the ability to control many payment methodologies rules.
It is vital to closely monitor the wording of your contracts. The appeals process does not go through Medicare and must be followed as dictated by the plan. Language such as Medicare methodology versus Medicare rates, timely filing, prompt pay, sequestrations, and add-on payments must be closely examined.
One example is the re-opening for good cause rule. BESLER is able to re-open Medicare claims under this rule, however many MA plans do not follow this and are very strict with their timely filing limits- sometimes at tight as 90 days for corrected claims.
There are also now opportunities to create value-based or risk-based payment models. As Medicare Advantage plans seek to keep patients healthier, this creates an opportunity to work with your contracted MA plans to create awareness and education through marketing of services and offerings.
More changes will come in 2020 for MA plans. With current support from CMS, it appears MA plans will continue to expand.
Mike Passanante: Hi, this is Mike Passanante. And welcome back to the award-winning Hospital Finance Podcast®.
Today, we’re going to be talking about why providers should care about the growth of Medicare Advantage Part C. And to talk with me about that topic, I’m joined by Michelle Keller-Eiler who’s a clinical review specialist here at BESLER. Michelle, welcome back to the show!
Michelle Keller-Eiler: Hi Mike. Thanks for having me today.
Mike: So, Michelle, we know that the enrollment in Medicare Advantage Plan is growing nationally, and it’s certainly something that policy makers and others are encouraging. So it’s something that the provider community needs to pay attention to. But before we get started down that road, why don’t you tell us a little bit about what Medicare Advantage is for those who may not be as familiar with it.
Michelle Keller-Eiler: Sure! So, Medicare Advantage, also known as MA or Medicare Part C, is a bundled plan that is offered by private insurance companies such as Humana or Aetna, United Healthcare. And these plans have to be approved through Medicare. And they have to cover all services that are covered by Medicare.
They will include part A in-patient benefits, part B outpatient benefits. Many of them will include part D which is your prescription coverage.
In addition, the Medicare Advantage Plans will cover additional services that Medicare doesn’t cover such as vision, hearing, dental services. All of these would be separate plans if you were to go with a traditional Medicare coverage.
Medicare Advantage is open to all members that are eligible for Medicare part A and B as long as they live in the service area of the Medicare Advantage Plan that they’re interested in becoming a member of, and that they do not have end-stage renal disease. That would disqualify them from going with a Medicare Advantage Plan.
It’s also important to note that if the member does choose to go with Medicare Advantage, they cannot enroll on a Medigap Plan (like they would have the availability to do if they went with a traditional Medicare coverage).
Mike: Michelle, what are some of the pros and cons of these plans.
Michelle Keller-Eiler: As I have mentioned, Medicare Advantage is an all-in-one coverage. So it’s covering your in-patient, your outpatient, your dental, et cetera (which would be different plans if you went with a traditional coverage). And they’re now very affordable.
So, some things that members need to look at is what the monthly premium is for the plan which may be as low as zero, but it can go up to—I’ve looked up some that were $85 a month.
They also need to make sure that it includes or it doesn’t include their part B premium which could be a separate charge, or the plan may up to cover some of that or all of that part B premium.
There’s also many options available that people can look at with different co-pays, different coverage options, different networks.
One key item that people liked with Medicare Advantage plans is there’s an out-of-pocket maximum, which does not happen with Medicare. So when you reach a certain dollar amount that’s set by the plan, you no longer have to pay out-of-pocket for that year of service.
The downside of—or we won’t say downside, the cons I guess of a Medicare Advantage plan is that the plan sets their own co-pays. They set the need for referrals to see specialists. And they do create their provider networks. It’s very important that a member looks at these provider networks and make sure that their physicians are included. Otherwise, they have to change providers, or they’ll be paying a lot more out-of-pocket to see the physicians that they want to see.
This can change from year to year too as providers and contractors no longer with the MA plans. And if you travel, it’s something to consider that the network may not expand outside of your current area that you live. So you may need to consider a different type of coverage if you’re going to plan on traveling.
Mike: And Michelle, as we said at the top of the program, these plans are growing in popularity and expanding across the country. You have some interesting data on what that expansion looks like. Could you share that with us?
Michelle Keller-Eiler: Sure, absolutely. So in 2018, there was a projection that Medicare Advantage enrollment for 2019 would increase 11.5% over the 2018 enrollment. As of July 2019, CMS has reported that there are nearly 23 million enrollees in Medicare Advantage programs. This also include PACE programs, MSA’s and Medicare Advantage SNPs. And it includes the US territories, not only the United States. But that’s definitely a huge growth. I’m not sure if we’ve hit our 11.5% growth yet, but we’re definitely on the rise.
Some of the reasons for this growth would be that the baby boomers are reaching Medicare age. They’re reaching retirement age. And they’re familiar with these employer-sponsored HMO plans. They’re familiar with the commercial plan names, the United Healthcare, the Aetna. So sticking with that familiar name and the familiar type of plan is just comfortable for them.
These folks are used to finding in-network providers. They’re used to getting referrals to be able to see their specialists. They know what their co-pays are to go to their primary care physician or to their specialist or to go get an x-ray done.
They’re also used to having that comfort zone of knowing that they’re going to or they may reach their out-of-pocket maximum, and they won’t have to exceed that amount and worry about where that money is going to come from towards the end of the year.
They’re used to having one insurer to go to and not having to worry about their Medicare A, their Medicare B. They just know they have United Healthcare or whatever their plan may be.
And they also no longer need to worry about finding a Medigap coverage because this is all-included. They wouldn’t have to search for that extra coverage.
One thing that CMS is doing to really help with the enrollment in Medicare Advantage, and even in the enrollment in Medicare, is they’ve committed to making the process easier and more personalized. They have a system called eMedicare which is redesigning the Medicare Plan Finder Tool online. It’s creating a much more personalized view for members to go on. They walk through a wizard now that will help show them options that are available to them, both traditional Medicare and Medicare Advantage plans. It helps them choose the type of coverage that may be right for them based on a few simple questions asked through the wizard.
Another item in here is the Out of Pocket Cost Estimator which is great for people to say, “These things may happen” or “I know these things are coming up this year. Let me see what it’s going to cost me if I go with traditional Medicare versus a Medicare Advantage plan.”
And I think, most importantly, is that they’ve really changed the language in this tool and on their website to be easier language for the every day person to understand. So it’s not as convoluted and difficult. It’s normal wording that we’re used to hearing. And especially for our aging population that may struggle with an online service as it is, to be able to go online, follow steps and understand what it’s telling them back, is great here.
Mike: And for anyone who watches TV, you might suspect that these plans are more widely available these days, right?
Michelle Keller-Eiler: Absolutely, absolutely. So, new companies are actually joining the Medicare Advantage arena. There’s a lot of growth potential for them. And the existing companies—like I said, United Healthcare, a few times, Humana, Blue Cross and Blue Seal—they’re continuing to expand the plan offerings, the number of plans that they’re offering, the areas that they’re offering them in.
They still do account for the largest percent of enrollment, the common plans. But new companies are coming out every day. And even provider-based companies are starting to join the Medicare Advantage arena and offer their own plans.
CMS actually puts out a listing by state of the number of plans available in every state in US territory. And we found some very interesting numbers.
So, the number of plans vary greatly from state to state. We found as low as five plans available in the state of Wyoming, and as many as 391 plans are available to members in Florida. I’m in New Jersey, so I looked specifically at New Jersey and there were 60 plans available in 2019 for members in the state of New Jersey.
And I also found that there are plans available in territories like Guam now and the US Virgin Islands and places that we may not think of Medicare or Medicare Advantage even being available. And now these Medicare Advantage plans are expanding to these territories.
Mike: And the plans themselves were expanding too.
Michelle Keller-Eiler: That’s correct, yes. They’re expanding in their offerings of services. As I’ve said, all services must be covered that are covered by Medicare. But they have supplemental benefits. And these benefits are expanding given the recent rulings by CMS allowing them to have some more flexibility.
Unfortunately, the plans can limit this to who they offer them to. And so they may choose to offer supplemental benefits to only people with certain health conditions. But that will expand as well as they have a little bit more time to refine these options and supplemental benefits.
Some of the benefits are now including non-emergency transportation which wasn’t available before. It was only on an emergency basis that you’d be covered; non-skilled home services; home safety equipment like grab bars in your shower and things that your aging population need to be safe at home. These will now be covered; even nicotine replacement therapy, preventive programs for certain conditions like diabetes or weight management.
Some plans are offering adult day care programs to help keep people in home longer.
In the future, we will be seeing a trial for home-based palliative care which is typically covered by Medicare right now. Even if you have a Medicare Advantage plan, Medicare would pay your hospice services. And we’re looking forward to a trial of this being covered by Medicare Advantage in the future.
Mike: Michelle, what do you think providers need to know?
Michelle Keller-Eiler: So, I think one of the key things that providers need to know is that Medicare Advantage population is growing. It’s going to continue to grow, as will the number of plans in your service area. So you need to be cognizant of this and cognizant of what your contracts say.
Medicare Advantage contracts used to be an addendum onto your commercial plan contract with not much thought put into them. And with the growth, we really need to watch the wording and make sure that these are carefully constructed contracts.
Medicare Advantage plans follow some rules for Medicare, but they don’t follow all of the rules. So some of the administrative rules are up to the plan to set. And that means they’re up to the contracting team to set as well.
So, you need to watch your payment methodologies that are in there, your timely filing rules, your comp pay, sequestration, add-on payments. These are all items that can be set in your contracts and worked out with your Medicare Advantage plan contracting.
One example that we see here at BESLER a lot is the good cause rule. We can reopen a claim for four years with Medicare. Medicare Advantage plans like to set very strict timely filing limits of 90 days for corrected and corrected claims. This is something that you can probably negotiate a little bit with them and see if you can expand your timely filing limits to follow more of the Medicare guidelines.
It also has created an opportunity to set some creative payment methods such as value-based or risk-based payment models. And we really need to start or providers really need to start working with these Medicare Advantage plans to create marketing for your patients to promote awareness and education of some of the offerings that you have that are now covered by their Medicare Advantage plan.
Mike: Michelle, great information. I certainly like to talk about Medicare Advantage because it’s something that is growing and something that is changing as well. And our provider community definitely needs to be in tune with what those changes are.
So, thank you for joining us on the show today.
Michelle Keller-Eiler: Thanks so much for having me.