By GEORGE HALVORSON
MedPac has recently released a report on Medicare Advantage that contains numerous inaccuracies that must be addressed. Medicare Advantage currently enrolls the majority of Medicare members in the country, making it the primary plan for the Medicare program. This is positive news for Medicare because the average cost for these members is significantly lower compared to traditional fee-for-service Medicare. This decrease in cost is sustainable due to the capitation payment model used for Medicare Advantage.
Under this model, plans receive a set amount per member, as opposed to being reimbursed for each individual service provided. By capping the amount paid for enrollees, and ensuring that this amount is lower than the average cost of care for traditional Medicare members, cost savings are guaranteed for the Medicare program. The bidding process, which calculates the average cost of traditional Medicare in each county and allows plans to bid lower than this amount, is based on accurate data and leads to actual savings for the program.
Furthermore, CMS has improved its method for determining patient risk levels by utilizing encounter data from care providers rather than relying on estimates from plans. This shift has resulted in more accurate diagnosis information and eliminates the possibility of upcoding or manipulation of risk pools by plans. The current payment model is transparent and ensures that plans are paid based on the actual cost of care, as determined by the bids submitted annually.
It is crucial to recognize that the 18% discount bids from Medicare Advantage plans are rooted in providing higher quality care at lower costs. By focusing on preventive measures such as blood sugar control and proactive management of conditions like congestive heart failure, Medicare Advantage plans are able to reduce hospital admissions and improve patient outcomes. These interventions not only enhance the quality of life for beneficiaries but also lead to significant cost savings for the Medicare program.
In conclusion, the notion that better care comes at a higher cost is debunked by the success of Medicare Advantage in providing superior care for less money. By prioritizing preventive measures and proactive management of chronic conditions, Medicare Advantage plans are not only improving patient outcomes but also reducing overall healthcare expenses. It is essential to understand and appreciate the value of this approach in ensuring the sustainability of the Medicare program.
