Becker's Hospital Review

12 CFO / FINANCE Where health systems are going wrong with Medicare Advantage By Alan Condon A s the Medicare Advantage landscape evolves, the success of health systems hinges on their ability to adapt and excel in key areas such as star ratings and appropriate coding. Health systems' greatest opportunity is to enter into full-risk arrangements with health plans, shiing the focus from managing illness to maintaining wellness. However, many systems have not made the necessary investments to thrive in this value-based care model, oen missing out on its potential benefits and driving ambivalence toward the MA program, according to SCAN Group CEO Sachin Jain, MD. "Success in MA is predicated on whether or not health systems are making the requisite changes," Dr. Jain told Becker's. "To be successful in MA, there needs to be an exquisite performance in both stars program as well as appropriate coding. When health systems engage in both, they have the opportunity to perform well." e other dynamic is whether or not they're entering into full-risk arrangements with health plans or if they're operating in fee for service, according to Dr. Jain. "e greatest opportunity that health systems have is to actually enter into full risk arrangements in which they assume full risk for a population of patients and focus on keeping them healthy rather than managing them when they're sick," he said. Excessive prior authorization denial rates and slow payments from insurers are some of the well-documented challenges providers face with MA, but Dr. Jain argues that many health systems do not invest in the appropriate areas to effectively manage care in a full-risk environment. "ey're getting paid to essentially do the same thing they might do in traditional Medicare. at's a real missed opportunity and why you're seeing so much ambivalence around MA," Dr. Jain said. "MA works when health systems are operating in a full-risk environment and doing their level best to actually manage the care of patients — to invest in chronic disease management and hospital avoidance for ambulatory-sensitive conditions. ese are the kinds of things that really make a difference between systems that perform well in MA and those that struggle." ough health system-owned MA enrollment has grown overall recently, it has underperformed with respect to the largest payers and comprises 13% of the MA market, compared to 17% in 2019. MA is also a different animal than traditional Medicare — where many systems aim to provide as many services as they can — but creates the right incentives for providers that prioritize the health and wellness of their populations as opposed to sick care of their populations, according to Dr. Jain. Another factor is that some health systems do not have a clear view of their line of business by contract profitability. Many providers are not profitable in MA, but it is critical to explore why. "Because MA is relatively new to some systems, there isn't necessarily the contracting sophistication, which some MA plans are taking advantage of," Dr. Jain said. "Rather than fighting to get the right kind of contracts, many systems are walking away from the program altogether, which is unfortunate because MA is the plan of choice for many lower income, older adults." Dr. Jain argues that it has evolved into a collision of mission versus margin for many providers. "Health systems need to do the work to be successful in MA," he said. "Some of the most frail and vulnerable populations in their communities are turning to MA because traditional Medicare is actually inadequate in the coverage that it provides for many beneficiaries." Some health systems push back against this claim, pointing to the fact that most MA carriers have faced allegations of billing fraud from the federal government and are being probed by lawmakers over their high denial rates. "It's become a game of delay, deny and not pay,'' Chris Van Gorder, president and CEO of San Diego-based Scripps Health, told Becker's last year before terminating MA contracts for its integrated medical groups. Image Credit: Adobe Stock

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