From Tom's Desk
Not everyone has access to a Medicare Advantage plan. CMS requires that regions have a certain level of local medical service in order to be eligible for contracting, including parameters for clinician density, inpatient facilities, home health and hospice. But developing these resources takes time and money, so naturally insurers migrate toward offering plans in metropolitan areas where they already exist.
But the low hanging fruit in the cities and suburbs has now been picked, and competition for new lives is fierce. In an effort to encourage insurers to move into underserved areas, CMS is beginning the process of shifting resources to account for the increased associated costs of setting up the supporting services needed to contract in these areas.
That’s good news. I can personally attest to the value that can be generated for insurers, clinicians and patients when a Medicare Advantage plan opens into an underserved area.
After over a decade of success with our Medicare Advantage program, we convinced one of our insurer/partners to bid on a contract for a neighboring county. Even 10 years ago the response in the area far outstripped anything either of us expected—to the point that our little office outpost was by far the greatest revenue generator per square foot in our organization.
The most valuable result, however, was not the increased revenue, the improved specialty referral streams, or even the experience gained. It was the word of mouth that we were willing to expand our services into a previously ignored area. The patients, clinicians and the insurer were all big winners.
And now CMS is using changes to it’s capitation model to shift additional resources in an effort to replicate this experience across the country. As the competition for urban lives heats up, I wonder who is going to recognize the immense opportunity of these underserved areas in this new Medicare Advantage environment.