How Medicare Advantage Is Leading Payers to Adopt Value-Based Care

January 10, 2020 - As America strives for positive changes to the healthcare system, it may find the greatest advancements for value-based care in Medicare Advantage plans.

Over 90 percent of healthcare payers in a small Health Care Payment Learning and Action Network survey said they expected alternative payment models to increase. However, most were unwilling to divorce from fee-for-service entirely. Instead, they expected to move into value-based reimbursement models that were still rooted in fee-for-service structures.

Furthermore, over half of the payments made in 2017 in the commercial sector were value-based reimbursements, according to the Catalyst for Payment Reform Scorecard. But 90 percent of these payments were grounded in fee-for-service structures and only around six percent involved providers taking on downside risk.

Payers have made many strides forward in recent years toward value-based care, but what will it take for the industry to fully commit?

By reforming their Medicare Advantage plans, hesitant payers may achieve the leverage they need to devote their whole system to value-based care.

Florida Blue, Humana, and Optima Health have been using Medicare Advantage to progress their value-based care initiatives. These payers have distinct structures and serve different populations. Florida Blue is a single-state health plan, while Humana is the second-largest Medicare Advantage plan in the nation and Optima Health is owned by the integrated healthcare delivery system, Sentara.

Despite those variations—and, in part, because of them—these payers illuminate how Medicare Advantage’s flexibility, community-orientation, provider resources, and quality measures make these plans the ideal starting point for value-based care reform.

Benefit flexibility

Whereas traditional Medicare may leave payers burdened or baffled by changing regulations, Medicare Advantage plans are freed by them. CMS policies regarding Medicare Advantage plans are getting less and less restrictive with each passing year. For example, the plan year 2020 updates allowed benefits such as meal delivery, transportation for non-medical needs, and in-home services.

It is this flexibility that has allowed Humana to invest in more personalized benefit designs that address specific health concerns for the market’s population, explained Will Shrank, MD, chief medical officer at Humana.

“We can be flexible, personalize, leverage, and a remarkable data source to be both precise about the needs of members, and to share that data with providers in a nimble way,” he said in an interview with HealthPayerIntelligence.com. “So if a provider is taking risks in partnering with us as compared to doing so directly with the government, we think there are a lot of advantages.”

“As a result, we're able to really accelerate the move towards value-based care and the likelihood that we will be successful in that endeavor,” he stressed.

Such liberty can help payers innovate value-based care solutions in other areas of their business. It ultimately helps break down barriers to value-based care, including the lack of providers’ community orientation.

Social determinants of health and community resources

By taking the time to partner with community organizations, Medicare Advantage plans offer an invaluable resource to providers who are working around the clock for their patients and may not have the time to vet and pursue community relationships.

To Sarah Iselin, executive vice president of government programs and diversified business at Florida Blue, a primary factor in Medicare Advantage plans’ role in healthcare is maintaining community for patients. A plan’s power to motivate value-based care rests largely on its connections with communities.

“Medicare Advantage programs support providing seniors with access to high-quality affordable health benefits,” she recently said in an interview. “And Medicare Advantage plans, in part because of additional flexibility that CMS has given us, are uniquely able to support keeping people in their homes and communities, playing a material role in making healthcare simpler at a time when people are at the most vulnerable moments in their lives.”

These community relationships are often best used to address social determinants of health, which have a larger impact on member outcomes than purely clinical care, according to commonly cited statistics.

CMS expanded Medicare Advantage policies for this year to cover more benefits that address social determinants of health. Covered benefits such as daycare services, therapeutic massages, and caregiver support give payers the opportunity to connect beneficiaries with local resources and companionship.

The leaders at Florida Blue, Humana, and Optima Health were positive about the changes and the potential to further value-based care through their community relationships allowed with these new flexibilities.

“We are a single-state health insurance company, which means we have a really deep understanding of our local community, of the residents in our local community, and of what they need,” Iselin said. “And so that flexibility that we've gotten from CMS is really allowing us to design Medicare Advantage plans that are responsive to all of those needs and to do it with a really deep understanding and with really deep partnerships with the local healthcare delivery system.”

For example, Florida Blue’s Medicare Advantage plan is in the process of piloting a transportation service that will get seniors out of their homes and into social situations, connecting them with family, friends, and communities. The payer is also using the extended benefits to cover house cleaning, meal preparation, and other benefits that are not directly medical but that can act as preventive care for behavioral and mental conditions.

Shrank also noted that Humana will be using new flexibilities to build on its community relationships and social determinants of health focus to pursue grocery benefits and home improvements for patients at risk for falls. It is these benefits that set Medicare Advantage apart from traditional Medicare, he said.

Like Humana, Optima Health is also using these benefits to address behavioral or mental healthcare needs. The company’s Medicare Advantage plans will provide hearing aid benefits and bolster community resources in 2020, said Patti Darnley, senior vice president of government programs at Optima Health. And when a member is avoiding a doctor’s visit because they are struggling to pay their bills, the Medicare Advantage plan may be able to leverage its community resources to help, she added.

“We are really trying to use resources in the community as well as trying to incentivize or reward members for behaviors that actually help them and, ultimately, help the healthcare system,” she explained to HealthPayerIntelligence.com.

Each of these benefits that are now covered under Medicare Advantage move the industry step-by-step in a value-based care direction.

“There's a whole array of services that we can and do provide for our members that create an environment that supports wellness, and that will promote successful value-based care,” Shrank summarized.

In turn, this helps to reinforce payer-provider communication, another key component to value-based care. For example, in order to determine what kind of social determinants of health benefits to target, Optima Health’s Medicare Advantage plan turns to its providers.

“We really get some feedback from our providers about where they are seeing issues,” Darnley explained. 

Provider resources

While provider feedback is essential to creating plans that work for specific member populations, payers also need to be talking back to their providers to truly implement value-based care.

In some situations, the payer has all of the pieces in place to pursue value-based care, such as claims data, member engagement, and community resources. However, its provider partners may not have the bandwidth to serve at a similar capacity, which could impede value-based care efforts.

Medicare Advantage plans excel at enabling payers to connect providers with the resources they need to engage in value-based care agreements, industry experts agreed.

For example, Humana invests in giving providers access to the technologies that they do not have the resources to acquire. The large payer also engages with patients outside of the provider’s office through follow-up phone calls or home visits to ensure members receive the necessary care.

“Because of our scale and our presence in communities, we can offer a different set of solutions that wrap around clinical care in ways that are hard for providers to produce on their own, or certainly hard for the government to produce,” Shrank said. “By pulling all of those services together in an integrated way, we can wrap around the very diverse and complex needs of the populations that our partnering providers need.”

For Optima Health, that partnership with providers takes on a unique quality. Optima Health is owned by Sentara, a non-profit, integrated delivery system with 300 sites of care, including 12 hospitals. 

The proximity to providers allows Optima Health to pivot more quickly so that its resources are genuinely fulfilling providers’ needs. This is best demonstrated in the payer’s ability to pilot new programs in one of their provider settings before heavily investing in expanding it across their entire health system.

While interoperability often blocks payers from supporting providers in a value-based care environment, Medicare Advantage plans like Optima Health can overcome that barrier.

To Darnley, Optima Health’s integrated structure allows the Medicare Advantage plan to take a more holistic approach to care. With the vertically consolidated system, the process of accessing patient data and assessing their care needs can be much more streamlined. 

The structure also gives the payer more control over member spending because they can more accurately target their funding. Using member surveys and regular meetings with their providers, Optima Health’s resources are less siloed. The payer can support not just the interests of the provider, or the plan, or the patient but all of them at once.

By providing better resources for provider partners, payers have noticed a shift in the historically adversarial relationship between payers and providers. Rather than the transaction-based conversations of the past, discussions between payers and providers now focus on how Medicare Advantage plans can help their providers, in search of a value-based partnership.

“It's based on a recognition that there is a lot of waste in our healthcare system,” Shrank explained. “Through better partnership, better care coordination, better health outcomes, and less unnecessary utilization of services, there is an opportunity to meaningfully improve the patient experience, the patient’s health, and also the provider or the payer experience, and our financial performance.”

When providers take on more financial risk, as they may in Humana’s Spinal Fusion Episode-Based Model announced earlier this year which involves upside risk, the payer tends to back off and become less of an administrative presence, Shrank noted. That is when the relationship transforms into more of a partnership.

To ensure that the relationship is working for the patients as well, however, Medicare Advantage plans benefit from setting their own quality measures.

Quality measures

The ultimate goal of value-based care is to provide the highest quality of care at the lowest possible cost. To that end, CMS has laid out its Medicare Advantage star rating system that is the same for all health plans. But many health plans that strive to achieve truly value-based care also have internal quality measures that they pursue.

At Humana, these internal measures are centered on health outcomes. Patient experience and provider experience also play into the company’s quality measures. 

“We measure the provider's experience working with us, and we think of that as a real priority,” Shrank said. “If the providers in our network see us as a real partner, and if they see us as an asset in managing the health of the patients they serve, rather than as more of an administrative barrier, we know that we're doing our job right.”

Maintaining positive results in these metrics can influence Humana employees’ bonuses and give the payer a sense of whether it is appropriately supporting its members.

Optima Health also puts a lot of emphasis on the provider’s role in quality measurement. Darnley underscored that the payer’s Medicare Advantage plan empowers providers with data in order to pursue quality measures. 

“We provide providers with information as part of that value-based care contract. It shows where we have gaps in care and what patients we need them to outreach to, working collaboratively with those physicians by giving them the information that they want and then helping them make sure that they are addressing the patient's needs,” Darnley elaborated.

Iselin highlighted Florida Blue’s use of net promoter scores and the importance of measuring member satisfaction, in addition to measuring patient outcomes. Both Blue Cross Blue Shield, Florida Blue’s parent company, and Humana have achieved strong net promoter score performance in the past.

“It's not just about cost,” Iselin expounded. “It is just as much about ensuring that they're getting high quality, truly patient-centered care. Balancing both of those considerations is really critical and important for consumers and for our success as a health plan.”

Medicare Advantage plans are a springboard for taking value-based care into all areas of payer business. All three plans expressed enthusiasm about the direction that value-based care in Medicare Advantage is heading.

“I expect to see nothing but growth in Medicare Advantage as we move forward as consumers are making choices,” Iselin summarized. “We're excited to be a part of it.”