From Tom's Desk

More insights on trends from publishing six months of value-packed observations.

The financial challenges being faced by privately-contracted Medicaid organizations are a glimpse int the future of Medicare Advantage—a vision of what’s going to happen to poorly run plans as Federal payments into the program become increasingly restricted.

Exactly what payment reductions are on the horizon?  

CMS already adjusts payments downward to account for increased coding intensity and those adjustments have stayed the same or worsened every year they’ve been in existence. There are already discussions of far greater adjustments as an additional offset in response to the reports of enormous coding fraud within the system. The most recent downward adjustment in payments is in the range of five percent. What will happen to your projections when it jumps to ten?

Other factors:  resource shifting within the program to underserved populations, the likely increases in costs from telemedicine and other technologies that increase access, the overall Medicare funding shortfall, adjustments due to migration of sicker patients off the Medicare Advantage program, re-institution of the health insurance tax, decreased medical-gap premiums from the regulatory loss of first dollar coverage starting in 2019.


Despite the heedless rush to acquire beneficiaries, Medicare Advantage funding is facing significant headwinds.

In 2008, the large banks failed the real world “stress test” of the financial crisis and had to be bailed out by the Federal Government. When the real world “stress test” of reduced funding strikes your organization, how will you respond?  Who will bail you out?

Boom times are great.  They make you feel like every decision you've made is right, like you're firing on all cylinders. I've been there. But in this case, the pushback that's coming is obvious---and the prudent will do their best to avoid getting caught up in the hype, leveraging their current strong performance in anticipation of certain change.  


Investments in care system development and provider education while avoiding capital commitments that result in long term expenses are the way to prepare for the lean times ahead.


I've been through this before. Don't get carried away by momentum. Steady scaling of your high-performing system will pay great dividends as resources swing.


The survivors of change will thrive.

You Should Know...

High-Value Insight

The cohort of patients who had polio when they were young are currently passing the scene. But post-polio syndrome is still not that uncommon—-but it is commonly mis-coded. If appropriate, consider submitting G12.29 for the condition. It’ll flat double your patient’s associated capitation. With all the complications from the condition, you are going to need all the resources possible to care for these folks.

Q&A with Dr. Tom

My patient’s been evacuated due to one of the hurricanes, how can they get medical care if they are too far away to find an in-network provider?

Even CMS has a heart. During natural disasters, network rules can be waived if the patient is pro-active.

Emergency care, wherever it occurs, will be covered as normal. But should your patients need more routine care, advise them to get what they need and pay what is asked of them---even if it represents an out of network level of payment.  Advise them as well to keep their receipts. Once recovery has begun, direct them to their plan, or better yet, their insurance agent and have them help your patient apply for a refund of the difference between in-network and out-of-network costs.

Similarly, special needs such as chemo, dialysis or hospice care can be arranged simply by calling the plan number on the back of the card. Every Medicare Advantage Organization should have a disaster plan that can be put into effect. Their staff can identify facilities with whom short-term arrangements have been made.

Patients can also get extended refills of medication by calling the prescription drug plan number on the back of their cards.

Lost a card and insurance agent incommunicado?  Search for the plan and their contact information here. Or call 1-800-Medicare and be prepared to be on hold for a long time.