In April, Dr. Mehmet Oz became Administrator of the Centers for Medicare & Medicaid Services (CMS). While his appointment generated a buzz, it is the work ahead that truly matters, especially when it comes to Medicare Advantage (MA), the program that provides care to about 33 million people, or 54 percent of the Medicare population.
Though MA is poised to provide the best outcomes for the most Americans, the program is also ripe for reform, and there are several critical areas Oz could focus on to drive meaningful improvement.
Here are five:
1. Pilot Multiyear Enrollment in Plans. MA plans looking to make investments in prevention and effective treatment face a conundrum: people under our care drop out of our plans on an annual basis. One way to fix this is to move away from annual enrollment and create options for people to enroll in plans for several years at a time. Dr. Oz has called for “shifting the paradigm for health care from a system that focuses on sick care to one that fosters prevention, wellness, and chronic disease management.” Multiyear enrollment would provide the necessary incentives to achieve this worthy goal because you can’t really invest in improving health in 1-year increments.
2. Standardize Plan Benefits. Plans should be competing based on excellence and their proven abilities to drive outcomes, not edge benefits and giveaways like cash rebates. By adopting standardized plan benefits and requiring them to address genuine health needs, CMS could ensure that when consumers choose plans on the basis of plan quality and health outcomes—which should be the most important metric in their decision-making process.
3. Reform Broker Commissions. Lately, there’s been a lot of talk about reforming the way MA brokers are compensated. Last year, CMS issued a rule capping broker compensation, but that rule was blocked by a judge before it took effect. And recently, the Department of Justice alleged in a lawsuit that insurers were paying kickbacks to brokers in return for steering beneficiaries toward their plans.
Amid these developments, we too rarely discuss ways to encourage brokers to steer people toward higher-quality plans. It’s time to align broker commissions with plan ratings. Under this approach, a broker who enrolls a client in a higher-rated plan would receive a larger commission than one who steers a client toward a lower-rated plan. CMS estimates that last year almost 38% of MA enrollment was in plans with fewer than four stars. We owe it to plan members to create a system that provides their brokers with every incentive to help them choose plans of the highest quality.
4. Reform the Broker Industry to Focus More on Clinical Support. While we’refocusing on brokers, let’s also provide them with incentives to use their expertise more expansively to improve health. I’ve spoken to brokers who help clients find care and navigate medical bureaucracies, locate the best prices on medications, and even connect them with life-saving social services.
Brokers earn renewal fees when their clients sign up annually for MA plans. Those renewal fees should be earned by annually providing clients with care navigation and other health services that drive positive clinical outcomes. Brokers who don’t offer such services should receive reduced renewal fees—or maybe not continue to serve seniors at all. Either way, it’s worth noting how many outstanding brokers already do this work and are among the most trusted members of their communities—exactly the kind of behaviors that should be rewarded.
5. Incentivize Integration Between Health Plans and Provider Organizations. There’s a lot of friction in our healthcare system, especially between health plans and provider organizations. Plans allege providers drive up costs with unnecessary procedures, tests and prescription medications; providers say plans are inflexible and stand in the way of appropriate patient care.
It’s beyond time to change the dynamic between these two groups. Many have already discovered that the best way to do this is to enter into global capitation arrangements by which providers receive a fee to manage all of a plan member’s healthcare expenses. The benefit of these arrangements is that they encourage each group to focus on what they do best: payers manage risk while providers make decisions about direct care. The best of these arrangements are true partnerships in which payers and providers transparently design products together that play to both groups’ strengths with an orientation toward improving outcomes. Going forward, it would be in patients’ interests for CMS to offer a standardized framework for payers and providers to collaborate in this way.
The appointment of a new CMS Administrator presents a unique opportunity to enact substantial and lasting changes. That’s certainly the case with Dr. Mehmet Oz. By focusing on these five key areas, he can help unleash the full potential of Medicare Advantage, benefiting older adults across the country.
