Primary care is the real “Medicare Advantage”

Tags: bagley, transformed, medicare, accountable care organization, health care reform, affordable care act

By Bruce Bagley, MD
TransforMED CEO

If you are not familiar with Medicare Advantage plans and how they work, it is time to get up to speed and follow this important trend in health system change. Nearly one in three Medicare recipients is now in a Medicare Advantage plan. The Affordable Care Act, which reduced per capita global payments to Medicare Advantage health plans by more than 10 percent, was expected to cause many insurers to exit the market and stifle the growth of this option for seniors. In fact, the opposite has been the case as the total Medicare Advantage enrollment exceeds 15 million seniors, three times as many as participated in 2004. In some California cities more than half of Medicare eligible seniors are in Medicare Advantage plans.

The rapid growth in Medicare Advantage enrollment is multi-factorial. Medicare Advantage plans have discovered that even with the reductions in risk adjusted global payments required by the ACA that capable primary care practices, properly supported to do risk stratified care management and care coordination, can save enough money on the hospital and ER side of the equation to net a fair profit for the Medicare Advantage plan. Also fueling the growth are the 10,000 individuals every day who turn 65 years old and become Medicare eligible. This new cohort of Medicare eligible citizens has some interesting characteristics that tend to make Medicare Advantage plans a nice fit. First, they are relatively “young and healthy” compared to most current recipients; they are more likely to have been in some kind of managed care or narrow network employer sponsored plan prior to retirement and don’t have an inherent distrust of managed care; and nearly 40 percent of these new enrollees are low income individuals, making it difficult for them to purchase Medi-Gap insurance on top of a Medicare premium. Medicare Advantage plans usually offer a “package deal” including drug coverage and other benefits for premiums comparable to Medicare Part B premiums. For all these reasons, some policy folks are predicting Medicare Advantage enrollment approaching 50 percent of all eligible seniors within two or three years.

Why is all this important to primary care practices? As our payment system moves from volume to value, primary care has an important role to play in the pro-active management of this segment of our population. The proportion of Medicare patients in a typical primary care panel can range from as low as 10 percent to 50 percent or more, and even higher for geriatric specialists. It is an important part of our work that requires special attention. We recommend that you have explicit systems and strategies in three important areas: Risk stratified care management and care coordination; coding practices that support proper reporting of the risk adjustment factor to CMS; and attention to the quality measures required for the Medicare Advantage STARs program which determines potential bonus to the plan on top of the global payment determined by the RAF score.

Risk stratified care management and care coordination

It is critical to identify those patients in the practice who need more help either in managing their own chronic conditions, navigating the fragmented system from one point of care to the next or both. Patients in the highest risk categories should be tracked on a registry, have up to date care plans in place and be contacted periodically by someone from the care team to track progress and identify deterioration early. For a more complete discussion of RSCM, see and a previous TransforMED article entitled “Why is everyone talking about population health?”

Proper coding practices to support determination of the risk adjustment factor

The Medicare Advantage program is set up to provide a risk stratified global payment to the sponsoring health plan for each enrollee. This score is determined once per year and calculated from the claims submitted for each encounter. CMS has specified the enrollment or health conditions that contribute to the aggregate RAF score for each patient. A computer algorithm is used to process the claims data for a calendar year to determine the RAF score for that period and estimate the composite RAF score for all Medicare Advantage patients in a given plan.

We suggest that practices use a registry for Medicare recipients so that this population can be pro-actively managed. For example, set up a workflow so that the care team does some “pre-visit planning” to determine if there are any gaps in the recommended care for the patient’s chronic conditions, preventive screenings or immunizations due and a coding review to assure that all the appropriate codes have been included in the current calendar year. This is a good time to make sure all Medicare patients, both Medicare Advantage and Fee-for-Service, get an annual wellness visit.

Quality measure reporting

The Medicare Advantage STARs program is designed to assure that seniors in these plans receive high quality care. It is important to set up your workflow and EMR systems to be able to report on quality results for the usual HEDIS measures. Meaningful use incentives have advanced this system capability available from vendors and caused many practices to redesign workflows to make sure the proper information is in the system to support the quality measure reporting function. Quality measure reporting will increasingly be required by all payers so it makes good sense to build these systems into regular care team work across the entire practice.

These recommendations are predicated on the assumption that Medicare Advantage plans will offer incentives and rewards for practices that comply with the reporting requirements of the program. Fortunately, most plans realize that infrastructure is required for primary care to do its best work and are willing to provide additional resources for critical primary care components including registries, care managers and home visits.

If Medicare Advantage with its risk adjusted global payment continues to grow as predicted, you can be sure the commercial markets will follow that path from volume to value. ACOs have had mixed results early in their development but the goals and care design of an ACO and a Medicare Advantage plan are very similar. The value created by primary care is central to the success of both of these approaches. Continuing to work on redesign, team-based care and building a quality improvement capacity for your practice, will pave the way for primary care practices in the new world of value based health care.

Bruce Bagley, MD, FAAFP, is president and CEO of TransforMED, a wholly owned subsidiary of the American Academy of Family Physicians. This article appears in Texas Family Physician with permission, and was originally published as the October 2014 installment of “Report from the CEO” on the TransforMED website,