Big Changes Coming for Medicare Advantage
With Medicare Advantage enrollment continuing to rise and more plans offering more benefits than ever, big changes are coming in 2021. This post will discuss the key changes to Medicare Advantage plans in the next year, program updates due to the COVID-19 public health emergency, and advice on how to navigate billing and reimbursement concerns.
For the first time in history, Medicare Advantage (MA) penetration has reached 40% of the total Medicare-eligible population. Currently, 25.4 million people are enrolled in Medicare Advantage (MA) plans, with a total Medicare-eligible population of 62.4 million, according to the Centers for Medicare and Medicaid Services (CMS). [ Link to report ]
With an aging population, enrollment in Medicare Advantage plans will only continue to grow (The Congressional Budget Office projects enrollment in these plans to rise to about 51% by 2030).
Medicare Advantage is an alternative to traditional Medicare that acts as an all-in-one health plan and is sold by private insurers. All Medicare Advantage plans must provide at least the same level of coverage as original Medicare, but they may impose different rules, restrictions, and costs. Most Advantage plans offer the same A and B coverage for the same monthly premium as regular Medicare plans, but also often include Part D prescription drug coverage, limited vision, and dental care, broader coverage, lower premiums, maximum out-of-pocket limits, and extra benefits—all of which expanded in 2020.
While this represents a distinct opportunity for many providers to be more profitable, growing enrollment also poses challenges. Medicare beneficiaries have more choice than ever before when it comes to selecting an MA plan.
According to the Kaiser Family Foundation (KFF), there are 3,148 Medicare Advantage plans available for individual enrollment for the 2020 plan year—an increase of 414 plans since 2019. The average beneficiary could choose among 28 plans in 2020. While the choice is great for the beneficiary, it adds complexity to healthcare providers’ revenue cycles, who need to navigate hurdles that vary by the plan in order to get reimbursed.
MA plans also tend to be more transient, meaning patients may switch often, even yearly if they choose through the open enrollment period. Providers must better manage every patient accordingly so they can maximize plan benefits. Doing so takes more effort, but the payoff can lead to profit.
CMS has clearly stated a goal to move from the current fee-for-service models toward value-based care. While the Medicare Advantage population grew by 60% from 2013 to 2019, the fee-for-service Medicare population only grew by 5%. The progress Medicare Advantage plans have achieved essentially creates an idea marketplace for beneficiaries. Enrollment costs are down and more plans than ever are offering new, innovative benefits. But what does this mean for providers?
So, how has COVID-19 affected Medicare Advantage plans? Well, the COVID-19 stimulus package, the Coronavirus Aid, Relief and Economic Security (CARES) Act, includes $100 billion in new funds for hospitals and other healthcare entities. The Centers for Medicare and Medicaid Services (CMS) made $30 billion of these funds available to healthcare providers based on their share of total Medicare fee-for-service (FFS) reimbursements in 2019, resulting in higher payments to hospitals in some states than others, according to KFF. Hospitals in states with higher shares of Medicare Advantage enrollees may have lower FFS reimbursement overall. As a result, some hospitals and other healthcare entities may be reimbursed less than they would if the allocation of funds considered payments received on behalf of Medicare Advantage enrollees.
In response to the COVID-19 emergency, many Medicare Advantage insurers waived cost-sharing requirements for COVID-19 treatment, meaning that Medicare Advantage beneficiaries will not have to pay cost-sharing if they require hospitalization due to COVID-19 (though they would if they are hospitalized for other reasons).
If a vaccine for COVID-19 becomes available to the public, Medicare is required to cover it under Part B with no cost-sharing for traditional Medicare or Medicare Advantage plan beneficiaries, based on a provision in the Coronavirus Aid Relief, and Economic Security (CARES) Act.
A Spotlight on Prior Authorization
Medicare Advantage plans can require enrollees to receive prior authorization before service will be covered, and nearly all Medicare Advantage enrollees (99%) are in plans that require prior authorization for some services in 2020, according to KFF. Prior authorization is most often required for relatively expensive services, such as inpatient hospital stays, skilled nursing facility stays, and Part B drugs, and is infrequently required for preventive services. Prior authorization can create barriers for providers and beneficiaries, but it’s meant to prevent patients from getting services that are not medically necessary, thus reducing costs for beneficiaries and insurers.
In a 2018 analysis, KFF found that four out of five MA enrollees—or 80%—are in plans that require prior authorization for at least one Medicare-covered service. More than 60% of MA plan enrollees require prior authorization before receiving home health services, and that percentage increases to more than 70% for skilled nursing facility and inpatient hospital stays.
The Families First Coronavirus Response Act (FFCRA) prohibits the use of prior authorization or other utilization management requirements for these services. A significant number of Medicare Advantage plans have waived prior authorization requirements for individuals needing treatment for COVID-19.
How Providers Can Prepare for a Medicare Advantage Boom
Medicare beneficiaries have more choice than ever before when it comes to selecting a MA plan. While the choice is great for the beneficiary, it adds complexity to healthcare providers’ revenue cycle. Healthcare providers will need to navigate new hurdles that vary by the MA plan in order to get reimbursed.
When beneficiaries change plans, it creates another challenge for providers. Historically, about 10% of MA enrollees change plans during open enrollment. Although this number seems low, even a small change in coverage can cause big problems for a healthcare provider’s revenue and cash flow. Billing the wrong insurance company leads to costly denials and appeals. Becker’s Hospital Review estimates that healthcare providers spend about $118 per claim on appeals. A study by the Medical Group Management Association found that the cost to rework a denied claim is approximately $25, and more than 50% of denied claims are never reworked.
Despite the challenges, providers don’t want to be left out of the MA boom. But how can they best prepare? Well, first off, healthcare providers need to ensure they are capturing accurate patient information. Next, they need to reevaluate workflows, so they are prepared to handle time-consuming prior authorizations. Additionally, healthcare organizations must consider how frequently they are re-running eligibility on patient rosters to make certain they do not miss a change in insurance coverage for patients under their care. Providers should re-run patient rosters monthly, so they have the most accurate benefit information. This will help them avoid unnecessary claim denials.
As MA continues to ramp up, the most successful providers will be those who work with a revenue cycle management partner that understands the nuances of Medicare reimbursement as well as the added complexities of MA.
With the acquisition of eSolutions, a leader in revenue cycle technology with Medicare-specific solutions, EZClaim’s ‘partner’, Waystar, so happens to be the first technology to unite commercial, government, and patient payments into a single platform, solving a major challenge and creating meaningful efficiencies. Billing Medicare, Medicare Advantage, and commercial claims from a single platform eliminates the hassle of managing multiple revenue cycle platforms and allows providers to get deeper AI-generated insights for faster reimbursement and increased value—for their organizations and their patients.
For more information about Waystar‘s platform, visit their website, or give them a call at 844.492.9782. To find out more about EZClaim‘s medical billing software, visit their website, e-mail their support team, or call them at 877.650-0904.
[ Article contributed by Waystar ]
