The following is a guest post from Dr. Jeffrey Kang, former chief medical officer for CMS' Office of Managed Care and president of ChenMed.
Medicare is a critical part of our healthcare system, providing health insurance to 17% of Americans. While Medicare is often seen as slow-moving, bureaucratic and outdated, the truth is, CMS has the power to drive our nation’s healthcare transformation – from volume to value.
As Seema Verma faces the nomination vote of the Senate Finance Committee for head of CMS, we hope she keeps this in mind. Innovations in healthcare delivery and services in Medicare can set the course for the entire healthcare industry. Many healthcare experts have noted that innovations in care delivery have occurred in the Medicare Advantage program, which existed years before the Affordable Care Act and MACRA.
Medicare Advantage started in the 1970s. Under this system, the federal government pays private insurance companies a risk-adjusted, prospective health premium for each Medicare beneficiary to provide coverage that is the same, or even better, than Medicare.
Established as a fully capitated Medicare Advantage provider, ChenMed provides care for more than 30,000 low-income seniors across nine metro areas in six states. We receive a prospective premium that is risk-adjusted based on the health needs of our individual patients. We hope that Verma sees Medicare Advantage playing a central role in her vision for the future of CMS. And from our experience on the ground, we believe she could strengthen the program even more by focusing on three priorities.
1) Maintain competition among Medicare Advantage plans
While two major health insurance company mergers have just ended, consolidation in healthcare is an inexorable trend. Meanwhile, we have seen how competition among Medicare Advantage plans directly benefits patients, pushing plans and providers to outmatch each other in quality and services. When there is only one payer, or one provider, it creates a race to the bottom that ultimately harms patients.
2) Create stronger incentives for higher quality care
Seniors deserve the best care possible, and one way to ensure that is to weed out bad Medicare Advantage providers. To that end, Medicare Advantage does a lot of things right – including rewarding the highest quality health plans with a premium bonus. But currently, those payments are limited by benchmark caps that mean a three-star health plan is paid the same as an otherwise similar five-star plan. We recommend lifting these caps to encourage more plans to achieve the five-star rating more quickly, which will expand quality options for patients.
3) Increase access to Medicare Advantage for seniors with low incomes
Oftentimes, the patients we serve in ChenMed clinics can’t afford co-pays for office visits or testing. Currently, anti-kickback rules prevent us from waiving these co-pays for many of our patients, even though we are otherwise fully responsible for the cost of their care. If we could waive these co-pays, it would allow more people to access our service. This simply makes sense in the model where we take on costs up front to save more over time.
Medicare Advantage has been pushing the move to value for years now, and many Republican leaders in particular see it playing a central role in their vision of health reform. While these three priorities do not cover all of the potential improvements Verma will need to consider, they are critical to promoting innovation in healthcare, especially for the oldest and sickest among us.