From Tom's Desk

Where we are now.

Medicare Advantage has morphed into a premium-based model….at least for now.

Insurers and healthcare delivery organizations have decided that the way to achieve revenue growth for their Medicare Advantage plan is to increase their premium payments through addressing quality metrics and harvesting risk-codes, with very little movement on the cost side.

And in an era of seemingly bottomless funding and 5-10% organic growth in the Medicare population, perhaps that's appropriate.

But the Federal deficit is growing exponentially and the revenue growth from the premium grab is flattening out. Many insurers and organizations are dusting off their old tried and true, top-down cost control measures and intensifying their peer-to-peer and prior authorization programs, programs that served them so poorly in the past.

The solution? Those organizations who can effectively manage costs from the bottom-up, leverage world-class personal clinician services to temper patient demand, will be the winners.

Warren Buffet once famously said, "When the tide goes out, you discover who's been swimming naked."

One way or another, the resources being poured into Medicare Advantage are going to be decreased, and the pressure is on to do so sooner rather than later. The tide is going to go out.

When it does, what will you be wearing?

You Should Know...

The Medicare Payment Advisory Commissions annual report was released this past week and I read all 346 pages so you don't have to.

Of special interest to Medicare Advantage plans and providers, the 2017 payment adjustment for coding intensity will reduce payments by 5.77%, more than offsetting the average 3-4% increase due to quality measures during the same time period. This continues a trend that has been slowly accelerating over the past few years, with reductions in payments increasingly outstripping the gains from meeting quality measures.

For high performing organizations who do a good job both meeting quality measures and harvesting risk codes, revenue growth in the future is going to have to come from:

  1. Growth in covered lives
  2. Harvesting the more esoteric, hard-to-find and document risk-codes
  3. Cost control

Unfortunately, in the practical world, these three factors are often in conflict with one another. It's hard to grow covered lives no matter what your star rating if you get the reputation you are trying to control costs. Clinicians spending time harvesting risk codes won't do as well in patient satisfaction surveys. And if they're spending time harvesting risk codes, they won't be able to do as good a job controlling costs.

All this adds up to greater challenges as you try to grow your revenues beyond the 5-10% yearly growth in the Medicare population. In fact, it's really only that organic growth in the Medicare population itself that makes Medicare Advantage the opportunity for providers that it is. If that organic growth should go away, say by dramatic payment cuts in an effort to address the Federal deficit, the potential of the program as designed will turn on a dime.

What to do?

If you are a high-performing organization, wholly dedicated to excellence, make sure your clinicians are trained, aligned and onboard with your strategic plans. If you have not consciously educated them, I promise you they are clueless.

If you are not performing well, understand that the world of easy accelerated revenue growth in Medicare Advantage is coming to an end and you're going to have to invest in your plan's infrastructure to catch up. Just where you want to invest is the question. The larger organizations are investing heavily in quantitative analysis and customer service. Be different. Change it up.

Invest in your care delivery instead.

The very best care delivery will always put the clinician-patient relationship at the center of every strategic decision—and every tactical one as well. Read on for an insight on one tactic for building that strong clinical relationship.

High-Value Insight

For clinicians, retention of individual patients in your pool is the key to long term success in a value-based program.

Home visits are an incredible tool for doing so.

To be a qualified service under Medicare, an individual must have a physical infirmity that prevents them from being able to seek care outside the home, either due to pain or other limitation.

In a fee-for-service world, house calls are incredibly inefficient. Even though the payment is somewhat greater than an office visit, the travel time and the greater documentation requirements render the service unsustainable. I only did them for my own person edification, to gather more information about the patient and maybe catch a free lunch. But as a business model, they are a non-starter.

For Medicare Advantage, however, they have been rediscovered. As long as you can document necessity, you are free to do as many house calls as you would like. The patient usually has no co-pays. And because you are getting paid based on the value these visits generate, they are financially sustainable and can even be a real home run.

I had a number of infirm patients who I saw regularly and also made it a point to see my recently discharged patients who qualified. Getting any of them into the office to be seen generated significant health risks of many kinds. Saving them the effort was worth my time alone.

Once news of me doing house calls got around, the marketing and retention effect was terrific and the word-of-mouth was unbeatable: "...and he does house calls..." I was able to keep my patients healthy, keep up with my coding and build a genuine bond doing so.

With my Medicare Advantage patients, practicing medicine was fun again.

Q&A with Doctor Tom

I frequently see patients with pulmonary infections and end up have my diagnostic codes audited down to non-specific lung infections. My patients actually have pneumonia, how can I make sure it is reflected in their RAF scores?

As an outpatient, the only pneumonias that increase your RAF scores are those that are tied to specific organisms. And the only way to submit an organism-specific pneumonia code is to have a positive culture result. This is important to note, radiographs alone are not enough. That said, the diagnostic codes that map to gram positive and gram negative pneumonia groups can have significant impact on your capitation long after the infection itself has resolved.

It is of course inappropriate to order diagnostic testing simply to support a diagnostic risk code, but there is really no safe harbor, no standard protocol as to when a sputum culture is indicated. You best bet is to use your own clinical judgement and order sputum collection when you think it is appropriate. If you find you are doing so frequently, I suggest documenting your thoughts in the medical record to support your judgement.

Once you have a sputum culture back and have addressed it, submit an addendum to the visit where it was ordered to your biller with the more specific diagnosis documented. This may seem like a lot of extra steps, but they can certainly be streamlined depending on your system and a rare catch of a gram negative pneumonia will make the effort worthwhile.

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