Medicare Advantage plans putting more financial risk on providers

Kelly Gooch -

Medicare Advantage plans are increasingly using a "full-risk" model that moves financial exposure from patients to physician-management companies, according to a Kaiser Health News report.

Four things to know:

1. Under the full-risk model, physician-management companies receive a monthly fixed payment from private Medicare Advantage plans, rather than payment for each patient visit. The fixed monthly payment covers various areas of care for beneficiaries, including drugs, physician services and hospital stays.

2. Humana, UnitedHealthcare and other Medicare plans are increasingly using the full-risk model to move financial risk to physician-management companies, according to the report. Physician-management companies receive more money upfront and profit if the fixed monthly payment exceeds expenses. Therefore, they focus on keeping patients healthy and preventing costly hospitalizations, according to KHN. For instance, the report states some companies, including Miami-based ChenMed and Boston-based Iora Health, provide same-day or next-day appointments and health coaches.

3. Physician-management companies say the full-risk model gives them greater flexibility in how they treat patients. However, some patient advocates note potential issues. According to KHN, the patient advocates cite similar experiments that previously failed, and said they are concerned the full-risk model, also known as "global risk," could spur physicians to provide less care, particularly when the care is expensive.

4. For approximately two decades, South Florida and Southern California have used the full-risk model, and more physician-management companies have adopted it. According to the report, about 10 percent of U.S. Medicare Advantage plan members now receive care in the model.

Read the full KHN report here.


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