5 questions primary care physicians should ask as Medicare Advantage enrollment continues to grow

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As Original Medicare continues to shrink, a record number of beneficiaries joined Medicare Advantage plans this year – 2.7 million to be exact, according to the 2023 Medicare Advantage Competitive Enrollment Report. This brings the total number of beneficiaries enrolled in a Medicare Advantage plan to 30.7 million, nearly half of seniors nationally. The effect of these dynamics on primary care cannot be underestimated, particularly as physicians look for ways to effectively serve their existing patients and grow their panels.

Atul Pathiyal, MPH
_Chartis

Nick Herro, MBA
_Chartis

Julianna Wokurka

_Chartis

Implications for the primary care physician market

What is the potential impact of this trend on primary care physicians? As primary care physicians look for answers, considering these five questions can help:

1. What national forces are at play?
The Medicare-aged population has grown by over a third since 2010, and in the last five years, seniors have shifted to Medicare Advantage (MA) in droves, with nearly half of all seniors now enrolled in a Medicare Advantage plan. This growth, paired with the diversification away from Original Medicare administered by the U.S. Centers for Medicare & Medicaid Services (CMA), has created a substantial private market for these patients. But the landscape of health plans that serve them is not only diverse, it’s also increasingly concentrated into a few national for-profit health plans – namely UnitedHealthcare and Humana. This year, they represented two out of every three new enrollees nationally.
In addition to United and Humana’s successes, start-up plans participating in Medicare Advantage also saw considerable growth throughout 2023 (up 22%, or 100,000 lives, over the previous year). Other national plans, such as CVS (Aetna), Elevance (Anthem), and Centene saw mixed results this year.

The growth of the Medicare Advantage market has placed increased value on primary care, including models that focus on high-quality primary care with reduced costs. As a result, payers are increasingly pursuing primary care partnerships or acquisitions to provide better care for Medicare Advantage populations and improve their health outcomes.

2. Who are the key players locally?
Health care is local. The state and localMedicare Advantage landscapes continue to evolve in individualized ways. For example, 22 states now have 50% or more of their Medicare enrollment in a Medicare Advantage plan, up from 11 last year. If you aren’t familiar with the Medicare Advantage adoption trends in your state, take the time to do your research.
You may start by considering these questions:

• Which plan type has the most market share in your state? Which are gaining or losing share?
• How does that translate to your local metropolitan area? Do differences exist?
• How do products offered by the leading health plans align with consumer preferences and your panel?
• Competitively speaking, which primary care providers do these plans have relationships with in your market? How does that position your practice for growth and retention of patients?

Understanding the dynamics of your local market will allow for more effective patient targeting and care management. It may also provide insight into future changes coming to your panel.

3. How prevalent are Special Need Plans (SNPs) in my market?
SNPs offer more comprehensive coverage to eligible seniors, and this market now represents 18% of all Medicare Advantage enrollment.SNP enrollment continues to grow rapidly, up 20% from 2022, driven by considerable dual eligible SNP (D-SNP) enrollment gains. Additionally, this year’s growth in SNPs accounted for approximately 34% of all Medicare Advantage enrollment growth, further underscoring how important this population is to Medicare Advantage and, therefore, the primary care market.
SNP plans provide service to populations with specific diseases, certain health care needs, or who also have Medicaid. For example, SNPs cater to individuals with specific chronic conditions (e.g., cancer, dementia, diabetes, HIV/AIDS, stroke, ESRD, and certain neurological disorders), individuals living in a facility (e.g., a nursing home, long-term care skilled nursing facility, intermediate nursing facility, or assisted living facility), or individuals enrolled in both Medicare and Medicaid. Understanding the prevalence of SNP-covered patients in your market can help you better predict and prepare for your future patient mix and their care needs.

4. What is the potential financial impact of network participation on my bottom line?
Today, more plan options are available to Medicare Advantage enrollees than ever before. Nationwide, enrollees have access to 4,100 plan options. At the local level, the average individual in a county has access to 44 different plan options. Plan choices have grown 11% per year, outpacing enrollment growth.

For primary care providers, this means that the right alignment with the right plans and networks will be paramount to unlocking access to new patients, in turn exposing new financial opportunities and rewarding strong clinical and quality performance. However, plan alignment has become increasingly complex to navigate as Medicare Advantage plans continue to grow in popularity. Understanding the universe of plan options will enable physicians to orient their businesses and clinical activities to best position themselves for future growth.

5. How might ongoing regulatory changes affect my primary care practice?
CMS continues to refine the Medicare Advantage model amid historic growth in three main ways:

Audits: In February, the U.S. Centers for Medicare and Medicaid Services (CMS) finalized a rule to start recovering improper payments made to Medicare Advantage plans through audits for the first time since 2007. It also made various changes to the Risk Adjustment Data Validation audit methodology.

• Revised Risk Adjustment: In March, CMS finalized policies in the 2024 Medicare Advantage and Part D Rate Announcement which significantly revised the risk adjustment model after extensive commentary from stakeholders.
• Improved Access: In April, CMS finalized a rule to crack down on misleading marketing schemes by Medicare Advantage plans, remove barriers to care created by complex coverage criteria and utilization management, and expand access to behavioral health care. The rule also promotes health equity and lowers prescription drug costs.
• Each of these changes points to continued promotion and strengthening of Medicare Advantage. Physicians need a robust strategy to align with Medicare Advantage plans that promote value-based care and seek to further advance the goals of the Medicare Advantage program amid this regulatory evolution.

Looking ahead

There’s no denying the rapid expansion of Medicare Advantage plans, and there are no signs this growth will slow down anytime soon. Primary care physicians must familiarize themselves with the local and national Medicare Advantage landscape to continue to serve patients and achieve practice growth.

Atul Pathiyal, MPH, is a director and president of the payer advisory services practice at Chartis. He has more than 25 years of advisory experience spanning the payer-provider continuum with a particular focus on designing new business models that harness the massive shifts shaping the health care industry.

Nick Herro, MBA, is a principal with Chartis, a leader in the firm’s private equity advisory and value-based care practices. He leads the diligence efforts within the private equity advisory practice, serving sponsors and portfolio companies through commercial diligence for acquisitions and divestitures. He has more than 10 years of management consulting experience working with leading health care organizations.

Julianna Wokurka is a consultant with Chartis. Her health care consulting experience spans academic health centers, national and regional health systems, and community hospitals, and includes engagements across strategy, performance, and business intelligence initiatives.