From Dr. Tom's Desk
The lessons from Medicare Advantage in Puerto Rico keep on coming.
Even before the hurricane hit, I was writing about the opportunity Medicare Advantage provided in the Commonwealth.
One fifth of the Island's 600,000 residents are on a Medicare Advantage plan, though baseline capitation payments much lower than stateside limit the current profit potential.
But the low gross revenue and poor healthcare infrastructure mask the chance to break into the market while its still in disfavor. Once the inevitable payment increases and regulatory relief come to fruition, there's sure to be a press of Medicare Advantage plans despite the physical barriers.
The same thing happened with the underserved populations on mainland, the dual-eligibles, those with both Medicare Advantage and Medicaid, those who qualified through disability rather than age, those with severe chronic illnesses.
No one wanted to take care of those folks, and those Medicare Advantage Organizations (MAOs) who bit the bullet and did the right thing by recruiting and caring for them paid a high financial price.
But now those same organizations are doing very well.
CMS is shifting resources to increase the capitation payments associated with these patients, and with special needs plans now a permanent feature of Medicare Advantage, the organizations have the tools to keep costs down.
The same is going to happen to some MAO with resources and vision in Puerto Rico.
CMS recently accelerated payment increases for beneficiaries on the island, albeit modestly, and Congress is pushing them to do much more.
The lesson here is clear.