In a new report, McKinsey offers insurers advice on how Medicare Advantage plans can maximize profits. McKinsey focuses on “star” power, keeping Medicare Advantage star ratings at four or higher, and paying more hospitals and physicians fixed rates rather than for each service performed. Make no mistake, this advice will help insurers, not Medicare Advantage enrollees.
The star-ratings in Medicare Advantage remain a farce for several reasons. Most important, the star-ratings do not capture high denial rates or high mortality rates, two indicia of poor performance and high risk for anyone joining a Medicare Advantage plan. The stars also do not capture basic metrics, such as network adequacy at the Medicare Advantage plan level, but only at the MA insurer contract level, which includes multiple plans. Consequently, a network could look very good at the contract level and deliver a high score to some Medicare Advantage plans, which have poor networks.
It’s easy for Medicare Advantage insurers to game the star-rating system. And, so long as they get a four or five-star rating, they get additional money from the federal government.
When insurers pay their network providers a fixed capitated rate rather than fee-for-service, as McKinsey recommends, it can lead to poor care for enrollees. Physicians have a powerful incentive to reject patients with complex conditions, because they cost the physicians too much money. Physicians also have a powerful incentive to not refer patients to costly specialists, because that too can cost them money.
We still have little clue of the health outcomes for people in Medicare Advantage plans who have complex and costly conditions; the data we do have is troubling. The data show higher disenrollment rates from Medicare Advantage and widespread inappropriate delays and denials of care.
McKinsey, health insurers, and many others use the Orwellian term “value-based” care to describe the capitated payment system. But, value is made up of quality and costs. And, Medicare Advantage plans have never shared the complete, accurate and timely data that would allow outside independent experts to assess their quality. Moreover, we know that Medicare Advantage plans’ costs to the Medicare program are significantly higher than Traditional Medicare’s.
Based on the overall quality unknowns of Medicare Advantage, the available data that too often shows delays and denials of care and its high cost, you could say that Medicare Advantage value-less care. Don’t tell us about your performance, Medicare Advantage plans, don’t hide your data, show us what you do, and outside independent experts will report on your performance.
Here’s more from Just Care:
- Medicare ratings of Medicare Advantage plans a farce
- OIG finds widespread inappropriate care denials in Medicare Advantage
- The wrong choice of Medicare Advantage plan could kill you
- Need a shrink? Your Medicare Advantage plan might not think so
- Medicare Advantage insurers increasingly use step therapy for cancer drugs, delaying care
