Round Up: All About Medicare Advantage

The first quarter of 2024 brought more attention to Medicare Advantage and its rapid growth.

From financial incentives being given to brokers enroll consumers in the program, to CMS taking a closer look at the ways payers use AI and algorithms in their processes, there’s much to consider and critique when it comes to Medicare Advantage.

Now, with the Center for Medicare and Medicaid Services’ finalizing pay rate increase, payers are concerned about protecting their profits.

Here are four HealthLeaders articles from Q1 to get you caught up on all things Medicare Advantage.

Medicare Advantage: Too Big for Its Own Good?

While popular among consumers, the Medicare Advantage program is straining itself. The program is catching up to traditional Medicare enrollment numbers, costing the government around 6% more per member.

Aggressive broker marketing, where brokers are given financial incentives to enroll individuals into MA plans, is also contributing to the program’s overpopulation.

Why More Organizations Are Terminating Medicare Advantage Contracts?

Health systems have begun pushing back against payers regarding Medicare Advantage for a number of reasons including low reimbursement rates and substantial amounts of denials. As a result, some organizations have terminated these contracts because they can’t afford to maintain them if things don’t change.

“There is rarely one final straw, but rather, a cumulation of events that negatively impact the fiscal viability of the relationship,” Britt Berrett, managing director and teaching professor at Brigham Young University and former HCA CEO, told HealthLeaders.

CMS Pumps the Breaks on AI for MA Plans

Much like health systems, payers have begun implementing AI solutions into their operations. CMS warned payers that any AI solutions and algorithms they use must adhere to internal benefits requirements and nondiscrimination rules.

“We are concerned that algorithms and many new artificial intelligence technologies can exacerbate discrimination and bias,” CMS stated a memo. “MA organizations should, prior to implementing an algorithm or software tool, ensure that the tool is not perpetuating or exacerbating existing bias, or introducing new biases.”

Five Trends Driving Medicare Advantage

Last month, the consulting firm McKinsey & Company pinpointed five notable trends surrounding Medicare Advantage, including the growing aging population, expanding special needs plans, and increasing regulation around third-party marketing and broker organizations. MA plans aren’t as profitable as they’ve been in the past and payers are looking to protect their profits.