From Tom's Desk

Medicare-For-All and Competitive Bidding

Medicare-For-All is getting a big push from the healthcare industry.  You're seeing it all across every channel of media.

The idea is playing a big role in the promotion of Medicare Advantage by folks who used to truly dislike the program.

Medicare Advantage is being pitched as the way to offer Medicare-For-All affordably. Yet, the only way this is actually true is through competitive bidding for the opportunity to offer your Medicare Advantage plan in a given geographic region.

That means deciding how much profit your organization needs in order to make offering their plans worthwhile, and hope someone doesn't undercut their proposal---either through price, product quality or political influence.

There are only two types of organizations who can win in this world:

1.  Those with market dominance across the country---money can buy a lot of influence in the selection process.


2.  Local plans, tailored to their communities and "right-sized" for optimum profitability.

All other plans will sell into a consolidating market---or go out of business.

Which will yours be?


You Should Know

Competitive Bidding
Once You Start Looking for it, the Evidence that it's Coming is Everywhere.

More evidence that competitive bidding for Medicare Advantage plans is just over the horizon.

I’ve been writing about this topic for several weeks in a row---the jobs of my readers are at stake, as is the success of their organizations and the care of their patients.

In following Medicare Advantage for almost three decades, I've see the pattern.
  1. Changes to the program are proposed in obscure journals
  2. Later, the same changes are supported with good research in reliable publications. 
  3. CMS mentions them in passing in their rule proposals and finals. 
  4. A “pilot” program is run, and then: 
  5. The changes become the law of the land.
Not every recommendation makes it through this system, but every significant change to the program did.

Do you remember the proposal adding ethnicity to RAF score calculations?  I do.

It died before stage 4 more than 10 years ago.

Attendees at my speaking engagements and the readers of my writings have been pushing back at the idea that competitive bidding is coming soon---sometimes with considerable vehemence.

But for those of us in the compliance business at a high level, competitive bidding is an obvious next step. It’s the only way to manage the impact of the massive fraud inherent in a “data-based” payment system---by making each piece of data worth less.

Here is another recently released study that shows competition protects Medicare Advantage consumers from the effect of cuts to the financial support of the program.

The authors are well respected in their field.

With so many respected organizations publishing similar research, we're well into the second of the five steps listed above---next, look for a comment about competitive bidding in an upcoming rule proposal from CMS.

I’ll be highlighting future illustrations of step two in this space without comment.

Given the huge capital requirements of starting up an MA plan, the extremely long revenue cycles and the transformative effect competitive bidding will have on your organization's efforts, the sooner you see the iceberg, the quicker you can change course.


Tips From Tom

Your patients can switch from one Medicare Advantage Plan to another for almost any reason from January 1 to March 31 of this year.  

Make sure they know it.

Have an insurance partner who can facilitate doing so if your patient so desires.
The bond you create from helping them will generate value for the rest of your relationship---and beyond.

Mitchell T., Ryan Y., Glenda G. and all our other new subscribers this week---Welcome to our community! Enjoy the value and email me any questions. We're all in this together.
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