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AHLA's Speaking of Health Law
Medicare Advantage: Navigating Uncertain Times
Medicare Advantage (MA) is one of the most popular insurance programs for the Medicare-eligible population, however it faces significant headwinds from both payer and provider organizations. Alan Lassiter, Principal, ECG Management Consultants, speaks with Christine Worthen, Member, Epstein Becker & Green PC, and Joe Mangrum, Partner, ECG Management Consultants, about the current state of MA, the complex issues confronting both payers and providers, and strategies for successfully navigating these uncertain times. They discuss issues related to provider-sponsored plans, structuring value-based arrangements with MA plans, how MA plans can maintain margin, CMS’ recent final rule, sustainable MA plan reimbursement, network design and supplemental benefits, and the value drivers of data. From AHLA’s Payers, Plans, and Managed Care Practice Group.
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Thank you.
SPEAKER_03:I want to begin by thanking you for listening to today's podcast. The topic for today's conversation is incredibly timely, Medicare Advantage, Navigating in Certain Times. Before we dive into today's conversation, let's do a quick round of introduction of today's speakers. Christine, let's start with you.
SPEAKER_01:Great. Thanks, Alan. Hi, everyone. My name is Christine Worthen. I'm a healthcare regulatory attorney. with Epstein Becker Green in the Washington DC office. My practice spans a few areas. I represent providers, payers, digital health companies, and investors. as they navigate regulatory and business challenges in the continuously evolving healthcare delivery and reimbursement landscape. I have a lot of experience with Medicare reimbursement, Medicare Advantage, participation in CMS Innovation Center models, managed Medicaid, managed care contract negotiations, and value-based payment arrangements across the spectrum, commercial, self-insured, Medicare Advantage. and help folks with the regulatory, operational, and financial considerations as they maneuver through the changing payment environment and various forms of risk-based payment models. I also help with price transparency, revenue cycle issues, payment integrity, value-based enterprise models, risk adjustment, and provider compensation arrangements. Great to be here.
SPEAKER_03:Thank you, Christine.
SPEAKER_02:Joe, could you introduce yourself? Sure. Thanks, Alan. Hi, everyone. My name is Joe Mangrum. I am a partner at ECG Management Consultants. ECG is a national consulting firm. We do a lot of the same types of work that other consulting firms do, but what sets us apart is we only operate in the healthcare industry. So anybody who is on an engagement from the consultant level up to the partner level as extensive and vast experience in healthcare. And at the firm, I lead our payer practice. So my clients are all health plans, different sizes and structures all across the country. And like Christine, my team and I do a lot of different initiatives, help with a lot of different issues for payers. financial turnaround, strategy, process improvement, regulatory issues. But I would say the vast majority of my work has been in the government programs, MA space. So, you know, happy to be on this podcast today. As Alan said, a very timely topic. And what I hope to do here is provide what I call a payer perspective. So maybe how health plans are thinking about the issues with NMA and the upcoming changes and just the forecast of what we're going to be looking at for the next few years. So very happy to be here and looking forward to the dialogue. Thank you.
SPEAKER_03:Joe and Christine, really appreciate those introductions. And let me provide a quick introduction of myself. I am Dr. Alan Lassiter. I'm a principal in ECG's Payer Strategy and Contracting Division. I provide strategic guidance to healthcare systems, hospitals, physician organizations, academic medical centers, and private equity firms. My practice focuses on value-based payment arrangements, Medicare Advantage plans, CMS innovation models, and Medicaid. I've been privileged to lead both provider and payer organizations and use those insights from those roles to help organizations successfully navigate the intricacies, and they are intricacies, of provider-payer relationships. And I will serve as moderator for today's conversation. As we begin, let me provide some level setting for those listening in. As most of you know, Medicare Advantage is one of the most popular insurance programs for the Medicare eligible population. In 2025, MA plans are projected to cover a record setting 35.7 million people. This represents 55% of all Medicare beneficiaries. However, in spite of its popularity, Medicare Advantage is facing significant headwinds, and we read about those in the news almost on a daily basis. And those headwinds are from both payer and provider organizations. As but one example, a recent survey of CFOs by HFCA found that 16% of healthcare systems are planning to stop accepting one or more MA plans in the Conversely, several insurers themselves, including such heavy hitters as Aetna, Humana, WellCare, Cigna, and Blue Cross Blue Shield have made the decision to exit targeted Medicare Advantage markets. And of course, these decisions are all going to have a significant impact on patients. those we are called to serve. And as has already been teed up in today's conversations, we will be discussing the current state of Medicare Advantage, the complex issues confronting both payers and providers, and strategies for successfully navigating uncertain times. Christine, I'd like to start with you. Let me begin with this question. I'm really curious. What are the biggest challenges providers who participate in inmate plans facing right now? And how are their strategies evolving in response?
SPEAKER_01:Great. Thanks. Happy to answer that. I think, unsurprisingly, the biggest challenges that the providers are facing at present is payment delays as well as payment cuts. In terms of strategy and adaptive strategies, providers have been doing things, starting with the basics, looking at the contract language regarding the payment terms and paying special care to address things like retrospective audits, prepayment audits, and generally tighten up the language with regard to both informal and formal dispute resolution. They're also paying more attention to data or healthcare providers can have various capabilities from very basic to very advanced and understanding now that really diving in and looking at trends is extremely important. Some of the trends that we've been looking at for clients and helping them get their arms around are trends in the two midnight rule. issues with prior authorization, and then payment audits, as well as DRG downgrades. And we have been looking at the final rule that was just issued last week and have some more clarity on that very issue with regard to prior auths. Also looking at the use of AI in utilization management. whether and to what extent humans are actually looking at the medical record when issuing denials. The final rule that was just issued did not go as far as to provide additional clarity on the AI issue, but nevertheless, that is something that's on providers' mind and is something that they're looking at and building out trend identification in that regard. And then also looking at Other things in the contract have had providers unbeknownst to them, their payment appendices exclude things like dish payments and of course addressing that. And then making sure your dispute resolution language is clear so that you know exactly what you're doing and where you're going, trying to get some sort of informal dispute resolution process in place before you proceed to whatever binding venue, be it arbitration or court. And then they're also looking at the impacts of things, upticks in medical records requests, and then trends there, and then trying to address that in the language as well. And again, looking at KPIs, conferring with the plans, and generally just being more proactive in their approach to ensuring sustainable reimbursement.
SPEAKER_03:Thank you, Christine. Really, really insightful. Joe, let's take that same question from the payer perspective and let me just rephrase it or not rephrase it, but let me articulate one more time. What are the biggest challenges Medicare Advantage plans are facing right now and how are they adapting their strategies in response?
SPEAKER_02:Right now, MA plans are dealing with several pressures and all of them simultaneously. tightening margins due to CMS's risk adjustment and rate changes, increased regulatory scrutiny, particularly around marketing practices, and then also growing expectations for supplemental benefits. I think on top of that, of course, the star ratings volatility is causing major revenue swings for some of the plans across the country. I think to adapt, payers are really doubling down on analytics, improving documentation and coding accuracy, and then tightening their medical cost management strategies. I think there's a lot of reevaluating going on as far as benefit packages. You see plans prioritizing more cost-effective and high-value supplemental offerings, and then More often than ever, we're seeing a lot more emphasis on member retention and experience because really the bottom line is that acquiring new members has become more expensive and complex than we've seen in recent history.
SPEAKER_03:Very helpful. And let's continue this conversation, but let's, Joe, let me ask you to zoom in just a little bit in light of the challenges just mentioned. And let's talk about provider-sponsored plans. How are provider-sponsored plans uniquely positioned to weather the uncertainty in the Medicare Advantage landscape? Or are they?
SPEAKER_02:Yeah, one of my favorite topics. Provider-sponsored health plans do have a key advantage. They control both the financing and the delivery of care. And that type of integration allows them to manage medical costs a lot more effectively through aligned incentives, through real-time care coordination, and a lot better use of population health data. I also think that in a lot of these uncertain times that we're facing, provider-sponsored health plans can move a lot faster. They're more agile. They can pivot their strategy based on clinical insight and not just claims data, right? So I also think back to the membership point that we talked about earlier, they're seen as more trustworthy by members and that is particularly so in local or regional markets and that helps with engagement and retention. And I think as national payers adjust to the CMS changes that I alluded to previously, The provider-sponsored plans can really stand out by emphasizing their quality of care, local roots, and tighter care management.
SPEAKER_03:Great. So Christine, how can providers structure value-based arrangements with MA plans to improve quality, receive fair payment, and mitigate risk? For example, ACC coding audits, MLR targets, and others.
SPEAKER_01:So we've seen trends evolve where providers can partner for things like planned resources. A lot of times providers don't have the team, people needed to do certain things. And so they're looking to partner with plans to assist with efforts, as well as understand the value of the data that they have to secure adequate reimbursement. So for example, we know that complete and accurate coding benefits both the payer and provider, especially as providers look to better understand their patients and plan ahead, identifying those high-risk, high-cost patients We see that providers are still reluctant to have two-way data feeds, but one-way data for reporting on the provider side is very helpful and reduces burdens such that you have an ongoing data refresh, say on a monthly basis, then that reduces the need to have to go back with chart chases and the like. The other component is standardization across the plans. Most of the payers that we work with do base their value-based reimbursement on the stars. And so from the provider standpoint, understanding what those stars are, incorporating stars into KPIs and strategic planning, knowing what the cut points are, and making sure that they're achievable. And if you're seeing that they're not achievable, to make sure that you have an opportunity to reopen and adjust. The whole theme is to share in the savings. When providers and payers in the relationships that we've seen where they are actually flourishing, there is collaboration in terms of understanding that optimizing, coding, data, all of that yields a higher pool from which they can distribute savings.
SPEAKER_03:Thank you, Christine. Joe, I'm going to come back to you here. With increasing regulatory scrutiny and shifting CMS payment policies, what steps can MA plans take to maintain margin while still delivering value to members? And you began to address some of this, but could you just go a little deeper here?
SPEAKER_02:Yeah, I completely agree with everything Christine said. I think on the plan side, the plans need to get extremely serious about their star strategy. And I think it used to be plans were serious about it, but they looked at it more as a quality indicator. But now it needs to be looked at as a margin lever because really every single measure impacts the plan's revenue. And Beyond that, I think we're seeing plans take a hard look at their vendor ecosystem. So much of STARS and risk adjustment has to do with that vendor ecosystem, especially around the supplemental benefits, like I talked about before. You have to ask, are you getting the value that we expect? Looking at, obviously, UM, risk adjustment coding, prior auth workflows, all those things need to be streamlined. And then I think that in many cases, plans that are succeeding in this new environment, they're shifting towards value-based partnerships with providers to share the risk and rewards more equally. I just think, you know, Christine mentioned the partnerships. It really comes down to that, and it's going to be crucial even more so coming up in the next few years.
SPEAKER_03:Really appreciate that. Christine, coming back to you, what are provider trends in dealing with UM issues such as denials? And you did mention the final rule. I just wanted to give you the opportunity to also go deeper on that if you feel like this would be a time to do so.
SPEAKER_01:Sure. So as I previously noted, the providers are really looking to better manage their expected reimbursement. Bill charges, as we all know, is largely irrelevant. Providers really need to pay attention to what denial codes they're seeing, for example, so that they can identify things that are true denials, patterns in those denials. Are they seeing contractuals? Are those contractuals proper and in accordance with the contract? Are they seeing more technical denials? And what does that mean from the perspective of appeals? And pause there cannot... cannot stress enough how important it is to ensure you're following the appeals process to be able to preserve rights in the event that you are not able to solve problems. I think the final rule offers greater clarity on things that were addressed. For example, in the 2024 CMS FAQ that was issued, I think it was February 2024, when CMS was addressing issues like the two midnight rule What does it mean? Folks having some confusion about the benchmark and presumption. And what does prior auth issuance mean? And when can you have a reopening for issues that are outlined in the regulations, for example? We know that providers make medical decision-making based on the patient at the time, and then other things may come out afterwards. I think the final rule really takes that FAQ and puts it into perspective so that folks understand that now this is part of the regulations. I think I see also providers pushing back on technical denials where you have a endless medical records requests, it seems. And when is that appropriate? And when is that going far beyond what's needed and is causing a real administrative burden on the provider? They're also making sure to pay attention to denials for previously authorized services, especially DRG downgrades, and really understanding and reading those denials and understanding how to push back if they feel that the denial is inappropriate based on the receipt of a prior authorization.
SPEAKER_03:Fantastic. Let's continue this part of the conversation. I'd like to pivot just a little bit to the uncertainty in ACA and Medicaid. And so Christine, with the challenges in regard to those and with the uncertainty in regard to those, while this is focused on MA reimbursement, if you have additional comments regarding the ACA funding, Medicaid funding and things along those lines, would you be willing to provide your insight into those issues?
SPEAKER_01:Sure. I think fundamentally what the providers with whom I've been working are really taking a holistic look at the MA plans with whom they are in network and asking who is a good partner? What does it mean to be a good partner? Where's reimbursement being eroded? Where's our expected allowed not being realized? We negotiated a contract. We think these are the rules of the road, but we're not getting paid. And what kind of resources do you need as a provider in order to be able to be successful? For example, if you've negotiated MLR targets and you have certain things that you need to do, do you have the right resources to be able to address the things that you've agreed to do in terms of quality monitoring, making sure patients are getting in for their visits, coding capture, etc.?
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SPEAKER_01:Providers are also taking a look at whether they really need to be in network with every single plan. I think you mentioned that, Alan, at the beginning. More providers are now saying, You know, do we need to be a network with every single one of their plans? But what does it mean to be out of network? And whether, if they do go out of network, are they going to accept a patient on an out-of-network basis, aside, of course, from their Intala obligations? So even going further to think through whether they would want to even see patients on an out-of-network basis. We know that sustainability means getting paid for medically necessary services delivered and also working with the payers who want to pay for care in accordance with the contract versus having some of these gotchas that we've seen when the contract language they believe means one thing, but in reality, from an operational perspective and adjudication, it means another. We also see providers looking at more opportunities with regional payers, especially as we've seen with the shift in markets, and some of the regional payers picking up some additional lives. I think that the ACA subsidies, what's going to happen, the budgets and Medicaid, I think that the providers ensuring that they've got a you know, a well-laid plan for Medicare Advantage so that they can get their arms around and get the reimbursement to help to weather the storms, the inevitable storms that are going to continue and the uncertainty that we're facing. People are being, providers are being more proactive than ever, at least in my experience, with really taking a hard look at the MA plans.
SPEAKER_03:Fantastic. So Joe, What trends are you seeing in how payers are approaching network design, supplemental benefits, and otherwise to stay competitive in MA?
SPEAKER_02:I think there's a definite move towards narrower, high-performing networks. Plans are realizing that this type of broad access that they've usually focused on, it doesn't always equal better outcomes and, frankly, lower costs either. So instead, now what we're seeing is a focus on steering members towards preferred providers who deliver the results that they're looking for. I think on the supplemental benefits side, we've seen a shift from quote unquote flashy benefits, ones that we have seen over the past few years, like gym memberships, things like that, towards more of the social determinants of health type oriented offerings. You think of transportation, meal delivery, in home support. I've even seen utilities assistance, but also have to realize on the plan side, there's a lot more scrutiny now, right? CMS wants to see these benefits used appropriately and then tie them to an actual clinical need. But I think the bottom line is that plans are becoming more sophisticated and evaluating ROI. It's not just does this attract members, but does it improve retention, satisfaction, and long-term health? Very helpful.
SPEAKER_03:Very helpful. And let me move to the issue of data. I know, Christine, you mentioned this earlier in the conversation, and this will be a question for both you, Christine, and for you, Joe. But what are the value drivers of data to providers, Christine, to payers, Joe, in terms of KPIs, other metrics, EMR data? And I'd love to know your perspective on what role this will play in the go forward. And Christine, you mentioned AI. Let's go a little bit deeper on that since that seems to be a significant topic of discovery and discussion across all of healthcare today. So Christine, data.
SPEAKER_01:Sure. The data strategy is fundamental to success. Successful providers are learning to integrate clinical and claims data. They're understanding where to look at incorporating AI tools and understanding the ROI because there's a lot of things that they've deployed and not really understanding whether and to what extent they're getting a return on investment, but really looking at the opportunities as they pilot some of these initiatives. For example, we We already know that risk stratification for low, medium, and high risk is one of those basic tools in the toolkit in order to manage a patient population. Now providers are looking to stratify based on other drivers, such as behavioral health and social needs, integrating behavioral health into a primary care setting, looking at all those additional care management programs that CMS has implemented. especially on the behavioral health side. Social needs, things like healthy food access and housing, transportation, all of these things that help folks adhere to things like chronic condition management and enable them to do some of the things that they might not otherwise be able to because of their social situation. I mentioned before, KPIs being tied to STARS is one option. But others are to look at your community health needs assessment, if you are a health system that has to do those, and really looking at integrating your Medicare Advantage strategy, not only with the results of your community health needs assessment, but also other value-based efforts that you might have underway. Other initiatives that clients are looking at is ED planning. What is the emergency department planning? strategic plan of the future, given the aging population, the ongoing trends and decreases in staffed beds, ensuring a relationship between the patient and the care team. That means getting a better handle on how patients access care, which in turn can avoid the avoidable, so to speak, and improve patient engagement and satisfaction. And all of these help to drive sustainable reimbursement, especially as you move to or you advance within the risk models as a provider. And relationship building with patients also helps in the event you do need to terminate a Medicare Advantage plan. As we know, Medicare Advantage patients don't switch their plans often. So building that ongoing patient relationship across the care continuum is extremely important. And so the data can help to anchor the care delivery model. It can inform what's working well and what's not working well. updates and measures. For example, with the quality measures being updated to include readmissions, that means taking an opportunity to review post-acute care patterns and address the issues, such as delays in prior auths going to SNPs and your overall relationship with post-acute care providers, as well as your service line and care setting planning. I think all of these help with and underscore the need for a good data governance internally, both in terms of improving patient care, patient relationships, and hopefully having a smoother process with the plans with whom the providers are in network and hopefully improving some of those relationships there.
SPEAKER_03:Interesting, immensely insightful. And then Joe, what are the value drivers of data for payers?
SPEAKER_02:Yeah, data is an incredibly strategic asset when it comes to Medicare Advantage on the payer side. Data underpins nearly every lever of financial and operational performance. So we think about on the revenue side, it drives performance. accurate HCC risk adjustment that directly affects capitation payments from CMS. On the quality front, robust data enables precise tracking of star ratings measures, and that's particularly HEDIS caps, operational metrics. It allows plans to close gaps proactively. It's also central to medical cost management, enabling predictive modeling, population satisfaction, and targeted care interventions. When we think about it from the network perspective, data really supports the value-based contracting. And that's just simply because it highlights provider level performance variability. And with all the increased regulatory scrutiny that we've talked about, maintaining clean, auditable data is really essential for RAD-B audits. It's essential for prior authorization reporting and just the general compliance that we think about, particularly for any of the more rigorous CMS audits that we see yearly. And then plans that can integrate clinical and claims data effectively, translate it into actionable insights, that they're the ones that are going to have a significant advantage in both margin preservation and ultimately in member outcomes.
SPEAKER_03:Thank you so much. Again, incredibly insightful and I'm sure that it's one of those areas that we're all gonna continue to pursue. It's gonna go further and deeper than we have previously and understanding both the payer and provider perspective from the data assets and how those integrate and how they must interrelate, I think will be very helpful in the future and having people that can help them actually navigate those issues effectively. It seems that we've just started, but we do need to conclude today's conversation. But let me just say this. As we conclude today's conversation, I want to thank both of you, both you, Christine, and you, Joe, for a rich and insightful conversation. We discussed Medicare Advantage from both the provider and payer perspective. Clearly, there is going to need to be ongoing integration and alignment between the two relationships that go further and do not always end up into an adversarial position. And you've outlined ways that we can consider this and how we might be able to move forward to be effective. Before we close, I would like to ask both of you if you have any final comments. And with that, Christine, let me start with you.
SPEAKER_01:Sure. Thanks, Alan. I think it's certainly an exciting time to be involved in the Medicare Advantage space with lots of things going on, lots of opportunities for providers, whether in terms of You know, optimizing current strategies, planning for the future, kind of rethinking the whole way of looking at reimbursement and provider-payer relations. Of course, not You don't always have to look at the relationship as it's going straight to and out of network. I think there are lots of opportunities to improve the relationship and collaborate and, of course, takes effort on both sides. And I think there's a lot of opportunity there. Also, just like to mention, as we're on the topic of collaboration. Medicare Advantage that I am one of the vice chairs of the Payers Plans and Managed Care Practice Group at AHLA. And that is a forum where there's lots of rich content and opportunities for learning. So to the extent anyone in the audience is interested in being a member of that practice group, it's impartial. It's a good one. Thanks, Alan.
SPEAKER_03:Joe?
SPEAKER_02:Yeah, I think at the end of the day, success in MA is all about alignment. We think about alignment between payers and providers and then between financial goals and patient outcomes. And I think that's been apparent during this conversation. A lot of what Christine and I both said from both different perspectives overlaps and aligns. And it's important that we keep that in mind. I think the more we collaborate, share data and build relationships, trust-based contracts, then the better we'll all navigate this uncertainty ahead and most importantly, deliver better care for our members and patients. So thanks for your time today. It's been a great conversation. Yes.
SPEAKER_03:And with that, thank you again to both of you. We'll conclude today's podcast and thank you to those who are listening for taking time to listen in.
SPEAKER_00:Thank you for listening. If you enjoyed this episode, be sure to subscribe to AHLA's Speaking of Health Law wherever you get your podcasts. To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.