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As of 2023, most people eligible for Medicare are enrolled in Medicare Advantage plans administered by commercial insurers, rather than traditional Medicare plans sponsored by the federal government. The Kaiser Family Foundation reports that 31 million people are now enrolled in a Medicare Advantage plan, with almost half of them (47%) served by United Healthcare or Humana.
This is 51% of all people eligible for Medicare, compared with 19% in 2007. The Congressional Budget Office projects that 62% of Medicare participants will be in Medicare Advantage plans by 2033.
Given the explosive growth in Medicare Advantage participation, many readers have likely seen patients served by Medicare Advantage or will soon. Below is information about the program’s purpose, strengths, limitations, and effect on physicians.
How does Medicare Advantage differ from traditional Medicare?
A Medicare Advantage plan is approved by the U.S. Centers for Medicare & Medicaid Services and competes for customers by offering lower premiums and/or more benefits. Traditional Medicare plans are unified contracts across the country, with the same fees for the same services paid nationwide.
CMS pays Medicare Advantage plans a per-member rate, which can be increased for people who seem sicker than other plan participants – for example, someone with uncontrolled diabetes and multiple comorbidities. This so-called “risk adjustment” doesn’t exist in traditional Medicare.
CMS also gives incentive payments to Medicare Advantage plans whose members receive better care, measured by such metrics as lower unnecessary hospital admissions. There are some analogues to this in traditional Medicare, such as the Making Care Primary program, but value-based care is a larger component of Medicare Advantage.
“Being paid for outcomes is what we as physicians always thought we went into medicine to do,” said Sarah Candler, MD, an internist in Houston. She most recently worked for One Medical and her experiences with Veterans Affairs and One Medical focused on value-based contracts, including for Medicare Advantage plans.
How do patients benefit from Medicare Advantage?
“Honestly the financial benefits to patients are what’s really driving the rise in Medicare Advantage,” said
Claire Ankuda, MD, MPH, is a geriatrician at the Icahn School of Medicine at Mt. Sinai in New York who has published extensively about Medicare Advantage.
A spokesperson for Highmark Health, which provides Medicare Advantage plans, told us that “Medicare Advantage plans are offered by private health insurers, such as Highmark, and typically offer benefits that support members’ total health, such as low-cost access to doctors and preventive care, and cover things like prescription drugs, vision, and hearing services, dental, and chiropractic care. Medicare Advantage plans also protect members from unforeseen costs like hospitalizations, surgery, or an expensive drug. And unlike traditional Medicare, Medicare Advantage plans can offer set copays for doctor’s visits (rather than coinsurance) to help members budget for their costs.”
Dr. Ankuda said hospitalization costs are sometimes higher for Medicare Advantage but agreed that costs for doctor visits are often lower with Medicare Advantage plans than with traditional Medicare.
So while the overarching goal of Medicare Advantage makes sense, Dr. Candler said, the actual physician experience of working with Medicare Advantage can be challenging.
What challenges might physicians experience when treating patients in a Medicare Advantage plan?
“The plan itself has control over what it will pay for and they’re much more aggressive about it than traditional Medicare,” Dr. Candler said. Medicare Advantage plans are often structured as health maintenance organizations, with narrow provider networks and extensive prior authorization requirements.
Dr. Candler gave an example of a plan that offers transportation to medical appointments – a seemingly great benefit. But what if someone needs to see a cardiologist and the only cardiologist within the plan is 100 miles away? That’s too far for the transportation benefit, it turns out.
Or a Medicare Advantage plan requires a physician to first do a physical exam before ordering an MRI, even though in the physician’s judgment only the MRI will have diagnostic value. Or the plan denies coverage for a service that’s already occurred. These practices aim to weed out unnecessary care but at the cost of patient confusion or physician time in arguing why something should be covered.
“The argument from us as physicians would be, ‘Just trust us to practice good medicine,’” Dr. Candler said.
Beside these concerns at the physician level, the regulations surrounding Medicare Advantage plans may open the door to billing fraud.
How do Medicare Advantage Plans interact with diagnosis codes?
“I just can’t stand when I see fraud in the health care system,” said Nancy Keating, MD, MPH, an internist at Brigham and Women’s Hospital and a health policy professor at Harvard Medical School, both in Boston.
This July, Dr. Keating published a report in the Annals of Internal Medicine about a patient of hers whose health insurer – a Medicare Advantage plan – claimed had diabetes with comorbidities and was morbidly obese. None of this was true. But submitting such diagnoses to CMS would suggest that Dr. Keating’s patient was especially ill, leading to greater reimbursements from CMS for covering her care.
“I’m not averse to paying plans that are taking care of sicker patients more, but we need to figure out who those patients truly are,” Dr. Keating said.
“It is absolutely true and widely proven that Medicare Advantage plans do a lot of clever things” to inflate diagnoses, added Dr. Ankuda. Also, she said that Medicare Advantage plan representatives would say this is legitimate work, as the entire point of Medicare Advantage is to pay more for caring for sicker patients.
“I don’t think anyone here is acting in bad faith. It’s just that [there are] very different incentives,” Dr. Ankuda said.
How can Medicare Advantage be improved?
Dr. Keating believes that CMS should reduce the number of diagnosis codes allowed within Medicare Advantage to thwart the potential for upcoding. Dr. Ankuda thinks the biggest problem is that there is no good way for patients to choose among Medicare Advantage plans.
“I don’t see it as Medicare Advantage is bad or Medicare Advantage is good. MA plans are incredibly diverse,” Dr. Ankuda said. The problem is that it’s very hard for patients to tell which plans are delivering the best care, what their out-of-pocket costs will actually be, or how often a plan denies payment.
Dr. Ankuda argues for much more data transparency around such plan factors.
Dr. Candler and Dr. Ankuda had no relevant conflicts. Dr. Keating is a consultant to the Research Triangle Institute, which advises CMS about Medicare Advantage billing codes.
As of 2023, most people eligible for Medicare are enrolled in Medicare Advantage plans administered by commercial insurers, rather than traditional Medicare plans sponsored by the federal government. The Kaiser Family Foundation reports that 31 million people are now enrolled in a Medicare Advantage plan, with almost half of them (47%) served by United Healthcare or Humana.
This is 51% of all people eligible for Medicare, compared with 19% in 2007. The Congressional Budget Office projects that 62% of Medicare participants will be in Medicare Advantage plans by 2033.
Given the explosive growth in Medicare Advantage participation, many readers have likely seen patients served by Medicare Advantage or will soon. Below is information about the program’s purpose, strengths, limitations, and effect on physicians.
How does Medicare Advantage differ from traditional Medicare?
A Medicare Advantage plan is approved by the U.S. Centers for Medicare & Medicaid Services and competes for customers by offering lower premiums and/or more benefits. Traditional Medicare plans are unified contracts across the country, with the same fees for the same services paid nationwide.
CMS pays Medicare Advantage plans a per-member rate, which can be increased for people who seem sicker than other plan participants – for example, someone with uncontrolled diabetes and multiple comorbidities. This so-called “risk adjustment” doesn’t exist in traditional Medicare.
CMS also gives incentive payments to Medicare Advantage plans whose members receive better care, measured by such metrics as lower unnecessary hospital admissions. There are some analogues to this in traditional Medicare, such as the Making Care Primary program, but value-based care is a larger component of Medicare Advantage.
“Being paid for outcomes is what we as physicians always thought we went into medicine to do,” said Sarah Candler, MD, an internist in Houston. She most recently worked for One Medical and her experiences with Veterans Affairs and One Medical focused on value-based contracts, including for Medicare Advantage plans.
How do patients benefit from Medicare Advantage?
“Honestly the financial benefits to patients are what’s really driving the rise in Medicare Advantage,” said
Claire Ankuda, MD, MPH, is a geriatrician at the Icahn School of Medicine at Mt. Sinai in New York who has published extensively about Medicare Advantage.
A spokesperson for Highmark Health, which provides Medicare Advantage plans, told us that “Medicare Advantage plans are offered by private health insurers, such as Highmark, and typically offer benefits that support members’ total health, such as low-cost access to doctors and preventive care, and cover things like prescription drugs, vision, and hearing services, dental, and chiropractic care. Medicare Advantage plans also protect members from unforeseen costs like hospitalizations, surgery, or an expensive drug. And unlike traditional Medicare, Medicare Advantage plans can offer set copays for doctor’s visits (rather than coinsurance) to help members budget for their costs.”
Dr. Ankuda said hospitalization costs are sometimes higher for Medicare Advantage but agreed that costs for doctor visits are often lower with Medicare Advantage plans than with traditional Medicare.
So while the overarching goal of Medicare Advantage makes sense, Dr. Candler said, the actual physician experience of working with Medicare Advantage can be challenging.
What challenges might physicians experience when treating patients in a Medicare Advantage plan?
“The plan itself has control over what it will pay for and they’re much more aggressive about it than traditional Medicare,” Dr. Candler said. Medicare Advantage plans are often structured as health maintenance organizations, with narrow provider networks and extensive prior authorization requirements.
Dr. Candler gave an example of a plan that offers transportation to medical appointments – a seemingly great benefit. But what if someone needs to see a cardiologist and the only cardiologist within the plan is 100 miles away? That’s too far for the transportation benefit, it turns out.
Or a Medicare Advantage plan requires a physician to first do a physical exam before ordering an MRI, even though in the physician’s judgment only the MRI will have diagnostic value. Or the plan denies coverage for a service that’s already occurred. These practices aim to weed out unnecessary care but at the cost of patient confusion or physician time in arguing why something should be covered.
“The argument from us as physicians would be, ‘Just trust us to practice good medicine,’” Dr. Candler said.
Beside these concerns at the physician level, the regulations surrounding Medicare Advantage plans may open the door to billing fraud.
How do Medicare Advantage Plans interact with diagnosis codes?
“I just can’t stand when I see fraud in the health care system,” said Nancy Keating, MD, MPH, an internist at Brigham and Women’s Hospital and a health policy professor at Harvard Medical School, both in Boston.
This July, Dr. Keating published a report in the Annals of Internal Medicine about a patient of hers whose health insurer – a Medicare Advantage plan – claimed had diabetes with comorbidities and was morbidly obese. None of this was true. But submitting such diagnoses to CMS would suggest that Dr. Keating’s patient was especially ill, leading to greater reimbursements from CMS for covering her care.
“I’m not averse to paying plans that are taking care of sicker patients more, but we need to figure out who those patients truly are,” Dr. Keating said.
“It is absolutely true and widely proven that Medicare Advantage plans do a lot of clever things” to inflate diagnoses, added Dr. Ankuda. Also, she said that Medicare Advantage plan representatives would say this is legitimate work, as the entire point of Medicare Advantage is to pay more for caring for sicker patients.
“I don’t think anyone here is acting in bad faith. It’s just that [there are] very different incentives,” Dr. Ankuda said.
How can Medicare Advantage be improved?
Dr. Keating believes that CMS should reduce the number of diagnosis codes allowed within Medicare Advantage to thwart the potential for upcoding. Dr. Ankuda thinks the biggest problem is that there is no good way for patients to choose among Medicare Advantage plans.
“I don’t see it as Medicare Advantage is bad or Medicare Advantage is good. MA plans are incredibly diverse,” Dr. Ankuda said. The problem is that it’s very hard for patients to tell which plans are delivering the best care, what their out-of-pocket costs will actually be, or how often a plan denies payment.
Dr. Ankuda argues for much more data transparency around such plan factors.
Dr. Candler and Dr. Ankuda had no relevant conflicts. Dr. Keating is a consultant to the Research Triangle Institute, which advises CMS about Medicare Advantage billing codes.
As of 2023, most people eligible for Medicare are enrolled in Medicare Advantage plans administered by commercial insurers, rather than traditional Medicare plans sponsored by the federal government. The Kaiser Family Foundation reports that 31 million people are now enrolled in a Medicare Advantage plan, with almost half of them (47%) served by United Healthcare or Humana.
This is 51% of all people eligible for Medicare, compared with 19% in 2007. The Congressional Budget Office projects that 62% of Medicare participants will be in Medicare Advantage plans by 2033.
Given the explosive growth in Medicare Advantage participation, many readers have likely seen patients served by Medicare Advantage or will soon. Below is information about the program’s purpose, strengths, limitations, and effect on physicians.
How does Medicare Advantage differ from traditional Medicare?
A Medicare Advantage plan is approved by the U.S. Centers for Medicare & Medicaid Services and competes for customers by offering lower premiums and/or more benefits. Traditional Medicare plans are unified contracts across the country, with the same fees for the same services paid nationwide.
CMS pays Medicare Advantage plans a per-member rate, which can be increased for people who seem sicker than other plan participants – for example, someone with uncontrolled diabetes and multiple comorbidities. This so-called “risk adjustment” doesn’t exist in traditional Medicare.
CMS also gives incentive payments to Medicare Advantage plans whose members receive better care, measured by such metrics as lower unnecessary hospital admissions. There are some analogues to this in traditional Medicare, such as the Making Care Primary program, but value-based care is a larger component of Medicare Advantage.
“Being paid for outcomes is what we as physicians always thought we went into medicine to do,” said Sarah Candler, MD, an internist in Houston. She most recently worked for One Medical and her experiences with Veterans Affairs and One Medical focused on value-based contracts, including for Medicare Advantage plans.
How do patients benefit from Medicare Advantage?
“Honestly the financial benefits to patients are what’s really driving the rise in Medicare Advantage,” said
Claire Ankuda, MD, MPH, is a geriatrician at the Icahn School of Medicine at Mt. Sinai in New York who has published extensively about Medicare Advantage.
A spokesperson for Highmark Health, which provides Medicare Advantage plans, told us that “Medicare Advantage plans are offered by private health insurers, such as Highmark, and typically offer benefits that support members’ total health, such as low-cost access to doctors and preventive care, and cover things like prescription drugs, vision, and hearing services, dental, and chiropractic care. Medicare Advantage plans also protect members from unforeseen costs like hospitalizations, surgery, or an expensive drug. And unlike traditional Medicare, Medicare Advantage plans can offer set copays for doctor’s visits (rather than coinsurance) to help members budget for their costs.”
Dr. Ankuda said hospitalization costs are sometimes higher for Medicare Advantage but agreed that costs for doctor visits are often lower with Medicare Advantage plans than with traditional Medicare.
So while the overarching goal of Medicare Advantage makes sense, Dr. Candler said, the actual physician experience of working with Medicare Advantage can be challenging.
What challenges might physicians experience when treating patients in a Medicare Advantage plan?
“The plan itself has control over what it will pay for and they’re much more aggressive about it than traditional Medicare,” Dr. Candler said. Medicare Advantage plans are often structured as health maintenance organizations, with narrow provider networks and extensive prior authorization requirements.
Dr. Candler gave an example of a plan that offers transportation to medical appointments – a seemingly great benefit. But what if someone needs to see a cardiologist and the only cardiologist within the plan is 100 miles away? That’s too far for the transportation benefit, it turns out.
Or a Medicare Advantage plan requires a physician to first do a physical exam before ordering an MRI, even though in the physician’s judgment only the MRI will have diagnostic value. Or the plan denies coverage for a service that’s already occurred. These practices aim to weed out unnecessary care but at the cost of patient confusion or physician time in arguing why something should be covered.
“The argument from us as physicians would be, ‘Just trust us to practice good medicine,’” Dr. Candler said.
Beside these concerns at the physician level, the regulations surrounding Medicare Advantage plans may open the door to billing fraud.
How do Medicare Advantage Plans interact with diagnosis codes?
“I just can’t stand when I see fraud in the health care system,” said Nancy Keating, MD, MPH, an internist at Brigham and Women’s Hospital and a health policy professor at Harvard Medical School, both in Boston.
This July, Dr. Keating published a report in the Annals of Internal Medicine about a patient of hers whose health insurer – a Medicare Advantage plan – claimed had diabetes with comorbidities and was morbidly obese. None of this was true. But submitting such diagnoses to CMS would suggest that Dr. Keating’s patient was especially ill, leading to greater reimbursements from CMS for covering her care.
“I’m not averse to paying plans that are taking care of sicker patients more, but we need to figure out who those patients truly are,” Dr. Keating said.
“It is absolutely true and widely proven that Medicare Advantage plans do a lot of clever things” to inflate diagnoses, added Dr. Ankuda. Also, she said that Medicare Advantage plan representatives would say this is legitimate work, as the entire point of Medicare Advantage is to pay more for caring for sicker patients.
“I don’t think anyone here is acting in bad faith. It’s just that [there are] very different incentives,” Dr. Ankuda said.
How can Medicare Advantage be improved?
Dr. Keating believes that CMS should reduce the number of diagnosis codes allowed within Medicare Advantage to thwart the potential for upcoding. Dr. Ankuda thinks the biggest problem is that there is no good way for patients to choose among Medicare Advantage plans.
“I don’t see it as Medicare Advantage is bad or Medicare Advantage is good. MA plans are incredibly diverse,” Dr. Ankuda said. The problem is that it’s very hard for patients to tell which plans are delivering the best care, what their out-of-pocket costs will actually be, or how often a plan denies payment.
Dr. Ankuda argues for much more data transparency around such plan factors.
Dr. Candler and Dr. Ankuda had no relevant conflicts. Dr. Keating is a consultant to the Research Triangle Institute, which advises CMS about Medicare Advantage billing codes.