Issue: November 2020

Disclosures: Romeo reports he receives royalties from, is on the speaker's bureau, is a consultant and does contracted research for Arthrex.
November 16, 2020
2 min read

Understand the potential impact of Medicare Advantage

Issue: November 2020

Disclosures: Romeo reports he receives royalties from, is on the speaker's bureau, is a consultant and does contracted research for Arthrex.
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With the growth of Medicare Advantage plans, orthopedic surgeons need to know the differences between traditional Medicare and Medicare Advantage, which is referred to as Medicare Part C.

Enrollment in Medicare Advantage (MA) has almost doubled in the past decade, with now more than one-third of Medicare patients enrolled in a MA plan, most of which are run by UnitedHealthcare, Humana or BlueCross BlueShield Affiliates. Private insurance companies must follow government-directed benchmarks. Coverage includes what was traditionally covered under Medicare Parts A and B.

Anthony A. Romeo

Basically, MA is a managed care alternative to traditional Medicare. When patients join, Medicare pays a fixed amount monthly to the company offering the plan. The private company may promote “zero payment” MA plans, however, it received the Medicare Part B premium and typically offers additional services without directly adding charges for them.

Medicare Advantage plans have become more attractive to patients as these offer coverage for services not typical for Medicare. Most enrollees have plans that receive high-quality rating and related bonus payments. If a plan keeps costs below the benchmark and meets quality goals, the plan’s share of the difference between the benchmark and actual cost is split with Medicare. The rebate goes to added benefits or reduced costs to patients.

Growth in MA plans signals an effort to align incentives with a value-based model vs. a fee-for-service or cost-based model and is actively changing the health care market. In this model, private insurance companies take on risk with the goal of providing equal or better outcomes at reduced cost. While private companies must follow Medicare payment guidelines, companies can develop their own rules and can state that joint replacements, including hip and shoulder, can be performed in an ASC and not be restricted to an outpatient hospital procedure, as is the case now with traditional Medicare.

With the cost of performing outpatient joint replacement in the ASC offering reduced overall cost, surgeons who can move about one-third to one-half of these cases to an ASC will provide significant savings for the plan. For this effort, they may be designated as preferred plan providers and benefit further from the steerage of enrollees toward their practices. More volume may lead to more expertise and efficiency and better outcomes, making it difficult for competitors to achieve the same value-based success. This process may also have a great effect on cost and site of service for spine surgery in the future.

Partnerships between major insurers involved in MA and orthopedic groups or multispecialty groups with strong orthopedic providers will continue to expand as parties seek to develop value-based programs that benefit both partners. This will place even greater stress on hospitals and health care systems in the form of no growth or decreased orthopedic surgical volume.

The involvement of private insurance companies assuming risk for MA enrollees will be a powerful force affecting orthopedic surgeons in the availability of Medicare patients, moving cases to ASCs and collection of outcomes data and satisfaction scores. As competition increases, factors such as social determinants of health must be managed as part of orthopedic care to ensure best reported outcomes are achievable. Practices should seek a desirable opportunity to affiliate with a multispecialty practice that considers the health of the entire patient with each episode of care and diagnosis has developed a high-level partnership with private insurance companies that administer MA plans.