Sachin Jain, MD, has a message for Medicare Advantage critics: You're right.
That message, of course, comes with a big asterisk.
Dr. Jain, who leads one of the nation's largest nonprofit Medicare Advantage companies, is a proponent of fixing issues with the 26-year-old federal program versus tearing it all down — a notion that has been suggested in recent weeks by a former director of the Center for Medicare and Medicaid Innovation.
"Any public policy program is going to create unintended consequences," Dr. Jain, CEO of SCAN Group, told Becker's. "What I would say to anybody who's critical about the program is that you're right, but let's fix that."
Some of the loudest critics of Medicare Advantage are hospitals and health systems. With the Medicare open enrollment period underway, a growing number of facilities around the country will not accept some or all MA patients in the new year, citing excessive prior authorization denial rates and slow payments from insurers. In their refusals, some systems have even pointed to allegations of billing fraud among MA carriers made by the federal government.
"It's become a game of delay, deny and not pay,'' Chris Van Gorder, president and CEO of San Diego-based Scripps Health, previously told Becker's. "Providers are going to have to get out of full-risk capitation because it just doesn't work — we're the bottom of the food chain, and the food chain is not being fed."
In late September, Scripps began notifying patients that it is terminating Medicare Advantage contracts for its integrated medical groups, a move that will affect more than 30,000 seniors in the region. Mr. Van Gorder said the health system is facing a loss of $75 million this year on MA contracts, which will end Dec. 31, including for SCAN members.
"If other organizations are experiencing what we are, it's going to be a short period of time before they start floundering or they get out of Medicare Advantage," he said. "I think we will see this trend continue and accelerate unless something changes."
Dr. Jain took a contrary stance. He noted that more than half of the nation's 65 million older adults are enrolled in Medicare Advantage, and more than half of those enrollees have annual incomes of less than $25,000.
"[Dropping MA] is a short-term trend that is going to backfire in a big way for these large health systems," he said. "You're a nonprofit system saying you're no longer going to accept the insurance that low-income people actually have. We'll see how that works out for you."
MA total enrollment is expected to be 33.8 million in 2024. There are nearly 4,000 Medicare Advantage plans being offered this year, and MA members spend an average of $2,434 less on out-of-pocket costs and premiums per year compared to traditional Medicare members.
"The fantasy notion that these folks are all going to leave Medicare Advantage plans and then join Medicare supplemental policies is exactly that," Dr. Jain said. "Critics will then say, 'We should be fixing traditional Medicare.' Good luck with that. I always remind people that traditional Medicare didn't have drug coverage until 2004."
Whether short term or sustainable, the trend is clear around the country. From rural independent hospitals to large urban health systems, Medicare Advantage contracts are increasingly being shunned. In October, the Nebraska Hospital Association issued a report detailing how Medicare Advantage is "failing patients and jeopardizing Nebraska hospitals," 33% of which do not accept MA patients. Bend, Ore.-based St. Charles Health System even encouraged its older patients not to enroll in the private plans altogether, though it did ultimately renegotiate contracts with four Medicare Advantage carriers.
"I would argue hospitals with less Medicare Advantage have made the wrong choice because these health systems traditionally have not done the work to get paid appropriately through coding and risk adjustment, and they haven't necessarily made the investments to succeed in the program," Dr. Jain said. "They're stuck in the middle or doing the opposite. Anybody who says we need new policies to get into value-based care is not acknowledging the fact that Medicare Advantage is probably the single greatest instrument that we will ever have in the industry to actually move to value-based care."
In April, CMS issued a final rule that aims to streamline Medicare Advantage and Part D prior authorizations, including ensuring consistency with traditional Medicare coverage guidelines. The agency has proposed another rule that would require MA carriers to approve urgent prior authorizations within 72 hours, and within seven days for standard requests. The proposed rule also would require payers to publicly report prior authorization denial rates and provide specific reasoning for denied requests.
Despite tensions with some health systems, the Medicare Advantage program has bipartisan support in Congress and a 95% quality satisfaction rating among enrolled members in 2023. Many systems also operate their own MA plans and are continuing to grow their reach within the program. Some have partnered with payers, grocers or other systems to launch plans for 2024.
Livonia, Mich.-based Trinity Health, which recently added its home state to the list of where it operates its MA program, MediGold, also offers the plan in Connecticut, Ohio, Idaho, New York and Iowa.
"Everyone is competing in this space pretty aggressively as we are in each of our regions," Trinity COO Ben Carter told investors Oct. 19. "We are continuing to evolve MediGold by investing in and growing it."
"If you're in the business of taking care of low-income people, I think it's potentially heartless to walk away from Medicare Advantage in the way that some of these health systems have," Dr. Jain said.