Medicare Part C, or Medicare Advantage (MA), refers to health insurance plans from private companies that have been approved by Medicare. The MA market features a complex and changing landscape of competition for eligible beneficiaries. Enrollment in MA plans has steadily increased due to the plan options. This shift has far-reaching implications for health care organizations that serve these patients, including retina practices.
Q. Why is Part C growing?
A. In 2023, MA enrollment was 30.8 million, or 51% of eligible beneficiaries.1 The Congressional Budget Office estimates that this figure will rise to about 62% of eligible beneficiaries by 2033.2 These plans are heavily promoted to patients who are eligible for Medicare because they offer additional benefits and services that traditional Medicare does not cover. These plans frequently include Part D prescription drug coverage with zero or low copays. Ordinary or Part A/B Medicare is not promoted, so many beneficiaries assume these MA plans are their best option.
A few firms dominate MA plans — UnitedHealthcare and Humana account for nearly half (47%) of all MA enrollees nationwide, and in some places they enroll up to 75% of MA patients.1 The financial rewards to these payors are substantial. Payments to MA plans are higher than traditional Medicare for several reasons, including bonuses, rebates, and risk adjustments.3 Not surprisingly, this has led to substantial profits for insurers. UnitedHealth Group, for example, reported $281 billion in earnings and $22 billion in profits for 2023, making it one of the most profitable major national insurance companies.4
Q. How does Part C affect providers?
A. Medicare Advantage plans are permitted to set their own payment rates; they don’t have to follow the Medicare Physician Fee Schedule. According to a study published in JAMA Internal Medicine, “Physician reimbursement in MA is more strongly tied to traditional Medicare than to commercial prices, but MA plans take advantage of favorable commercial prices for services for which traditional Medicare overpays.”5 Medicare Advantage plans can charge different out-of-pocket rates, and each has different rules for how patients access care, which can change yearly.6
Significantly, MA plans have their own policies for processing claims for reimbursement. Covered diagnoses vary from traditional Medicare. For some services, prior authorizations may be required, which is not typically the case for Medicare Part B. The Centers for Medicare and Medicaid Services prohibits MA plans from using the Advance Beneficiary Notice of Noncoverage (ABN); instead, predetermination of benefits by the provider or beneficiary is the method used when coverage is in doubt. There are a wide variety of offerings within MA plans. Some cap out-of-pocket beneficiary expenditures on an annual basis for covered services, while Part B Medicare does not.
Q. What are some key tips for reimbursement claims?
A. Our experience with claims for reimbursement with MA plans is very different from traditional Medicare. Assessing coverage is more difficult; denied claims are not easily addressed; administration is frequently more time consuming; maintaining preferred provider status can be challenging; and contracting requires serious effort and creativity. Administrators or practice managers should devote significant effort to contracts and negotiations with MA plans; create novel win-win solutions that improve care and lower cost; collect and analyze outcomes data to demonstrate quality of care; and establish administrative processes consistent with MA plan requirements.
Conclusion
Increased enrollment in MA plans has significant implications for providers. These plans use different administrative processes than traditional Medicare and may have lower payment rates for physicians. They generate surprises for billers. Access to beneficiaries depends on retention of your physicians on MA panels of preferred providers. Practice managers need to devote time and attention to the shift toward MA plans. RP
References
1. Ochieng N, Biniek JF, Freed M, Damico A, Neuman T. Medicare advantage in 2023: enrollment update and key trends. August 9, 2023. Accessed January 9, 2024. https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2023-enrollment-update-and-key-trends/
2. Congressional Budget Office. Medicare baseline projections, May 2023. Accessed January 11, 2024. https://www.cbo.gov/system/files/2023-05/51302-2023-05-medicare.pdf
3. Biniek JF, Cubanski J, Neuman T. Higher and faster growing spending per Medicare Advantage enrollee adds to Medicare’s solvency and affordability challenges. August 17, 2021. Accessed January 11, 2024. https://www.kff.org/medicare/issue-brief/higher-and-faster-growing-spending-per-medicare-advantage-enrollee-adds-to-medicares-solvency-and-affordability-challenges/
4. Japsen B. UnitedHealth Group profits hit $22 billion in 2023. Forbes. January 12, 2024. Accessed January 12, 2024. https://www.forbes.com/sites/brucejapsen/2024/01/12/unitedhealth-group-profits-hit-23-billion-in-2023
5. Trish E, Ginsburg P, Gascue L, Joyce G. Physician reimbursement in Medicare Advantage compared with traditional Medicare and commercial health insurance. JAMA Intern Med. 2017;177(9):1287-1295. doi:10.1001/jamainternmed.2017.2679
6. Centers for Medicare and Medicaid Services. Understanding Medicare Advantage plans. Accessed January 11, 2024. https://www.medicare.gov/Pubs/pdf/12026-Understanding-Medicare-Advantage-Plans.pdf
