Medicare card on top of $100 bill
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Reducing payments to Medicare Advantage plans would ensure the sustainability of the Medicare program while maintaining access to popular plans that place a premium on quality care and preventive services, according to a new report.

The Medicare Payment Advisory Commission, in its annual report to Congress on Tuesday, reviewed the status of Medicare Advantage, saying that many indicators point to an “increasingly robust” program.

Forty-six percent of eligible beneficiaries were enrolled in Medicare Advantage in 2021. And for 2022, the average plan bid to provide Medicare Part A and Part B benefits was 15% less than private plan Medicare would spend on enrolled members, according to the report. 

But those efficiencies, MedPAC said, are shared exclusively by the companies sponsoring the Medicare Advantage plans and enrollees. Taxpayers and Medicare beneficiaries don’t realize any savings from plan efficiencies. Instead, MedPAC estimates that Medicare spends 4% more for Medicare Advantage enrollees than it would have spent if those enrolled remained in traditional Medicare plans.

MedPAC said that Medicare should not continue to overpay Medicare Advantage plans, reiterating past recommendations that address coding intensity, would replace the quality bonus program and would establish more equitable benchmarks. 

Those moves, according to MedPAC, would help preserve Medicare solvency and sustainability while maintaining beneficiary access to Medicare Advantage plans and the extra benefits they provide. 

Mark Price, CEO of Senior Housing NewCo — the parent company of AllyAlign Health, which is involved with provider Medicare Advantage plans — said he strongly disagrees with the MedPAC report recommendations. But he said he does agree with the acknowledgement that the plans are popular with Medicare beneficiaries.

“At AllyAlign Health, we believe long-term care operators should take a more active role in shaping the payment models for care delivered to their residents to ensure outstanding care and fair compensation,” Price told McKnight’s Senior Living. “Actively participating in and / or operating an ISNP [institutional special needs plans] is an increasingly important and transformational way that long-term care communities can improve care and payment models at the same time.”

Several senior living operators offer Medicare Advantage plans to their residents, including the Perennial Consortium, which includes Juniper Communities, Christian Living Communities, Ohio Living and AllyAlign Health. LeadingAge California and AllyAlign Health also partnered to offer access to Align Senior Health Medicare Advantage plans.

Erickson Senior Living offers Medicare Advantage plans through Erickson Advantage.

American Health Advantage of Utah partners with Mission Health Services, Cascades Healthcare and Sunshine Terrace Foundation to provide assisted living residents access to institutional-equivalent special needs plan benefits.

Several operators in Minnesota joined together to offer the Medica Advantage Solution– PartnerCare, which enables members to select Medicare Advantage I-SNP coverage if they need or are expected to need the level of services provided in a long-term care facility for 90 days or more. 

Toledo, OH-based real estate investment trust Welltower also collaborated with CareMore to integrate CareMore’s clinical programs and onsite care models at Belmont Village and SRG Senior Living independent and assisted living communities in Los Angeles and Orange County, CA. The arrangement introduced residents to Medicare Advantage ISNPs offered through CareMore’s partnering health plans, through which CareMore clinicians deliver and manage care.