More Providers Entering MA, Analysis Finds

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

By Mindy Yochelson

Jan. 26 — An increasing number of health systems and hospitals, including the Kaiser Foundation Health Plan and InnovaCare, are entering the Medicare Advantage business “as the line between payer and provider blurs,” according to a consultant's analysis released Jan. 26.

In 2016, provider-sponsored organizations (PSOs) participating in MA will hold 149 contracts, of which 30 have an effective date prior to 2005. “This implies that most current provider-sponsored MA parents have entered the program within the last decade, and many of them within the last few years,” the analysis by Avalere Health said.

Of 19 new parent organizations entering the program, 11 are providers, the analysis found.

Over 400 Plans

Overall, 70 PSOs will offer 403 MA plans in 41 states. “Increasingly, large providers are leveraging their integrated delivery networks and building on their experience bearing risk to offer insurance to consumers across the country.”

The analysis found that 19 percent of MA enrollees and 6 percent of Medicare beneficiaries overall were enrolled in PSOs in 2015.

While provider-sponsored plans have a significant enrollment share in MA nationally, in some areas they have an even more significant share, it said.

Top in Area

Of the top 10 PSO MA plans, Ministry Health Care in Wisconsin had 55 percent of total MA enrollment, Kaiser Foundation Health Plan in six states had 36 percent and Group Health Cooperative in Washington state had 33 percent.

“Provider-sponsored plans diversify choice for consumers picking a Medicare Advantage plan,” Elizabeth Carpenter, a vice president at Avalere, said in a statement. “In particular, their high-quality scores may drive additional enrollment over time.”

While 32 percent of total MA enrollees in 2015 were in a 4.5- or five-star plan on a scale of one to five, 70 percent of provider-sponsored MA plan enrollees were members of a plan rated at that level.

“It's clear that provider-sponsored plans, like us, are uniquely positioned to structure care delivery in a financially prudent way that delivers optimal value to our patients,” Mark LePage, chief medical officer at Marshfield Clinic Health System, which has 43,000 MA enrollees in Wisconsin, told Bloomberg BNA.

Double-Edged Sword

However, Dan Mendelson, Avalere's president, told Bloomberg BNA that “consumers need to be aware that their local hospital, who in the past was simply a trusted partner for care delivery, might now also be the party responsible for keeping health system costs down.”

This could have both a positive and negative impact on the beneficiary, he indicated.

“Some of the activity could help consumers on the quality side,” Mendelson said. “For example, providers that are MA plans will have direct financial incentives to reduce their [enrollees'] cholesterol levels, ensure that breast screening is done, and help them quit smoking.”

Competing With Insurers

Trends indicate that, as providers gain experience bearing risk and developing care delivery models, they will continue to enter the health insurance business, alongside traditional insurers, the study said.

“Provider-sponsored plans, like all insurers, will need to demonstrate their ability to effectively manage risk and compete in the marketplace,” Carpenter told Bloomberg BNA. “Over time, many, but not all provider-sponsored plans will successfully transition to the business of insurance for the long term.”

To contact the reporter on this story: Mindy Yochelson in Washington at myochelson@bna.com

To contact the editor responsible for this story: Janey Cohen at jcohen@bna.com