What Are You Doing to Protect Your Bottom Line Against Declining Medicare Advantage Reimbursement Levels?

Since 2004, the number of beneficiaries enrolled in private Medicare plans has more than tripled from 5.3 million to 19 million in 2018. Over one third of Medicare beneficiaries are enrolled in an Advantage plan and enrollment is expected to continue to grow at a rate between 4 and 7% per year up to 50% of all enrollees by 2022.

Medicare Advantage programs are built on a framework that emphasizes savings and lowering prices for consumers. People like MA plans because they offer predictability, additional benefits, care coordination and lower estimated total annual healthcare costs than are offered by Original Medicare or supplement plans. Sounds great, right?

Not so fast.

If you are a provider, Medicare Advantage plans tend to reimburse significantly less than traditional Medicare.

Plante Moran completed a study looking at the effects of Medicare Advantage on Skilled Nursing Facility profits. In the third quarter of 2018, the average skilled nursing facility brought in $515 per Medicare patient day according to the National Investment Center for Seniors Housing & Care (NIC), compared to $427 for Medicare Advantage plans and $209 for Medicaid.

Patients often don’t understand that Medicare Advantage is not Traditional Medicare. Patients can have high copays and other patient responsibility associated with their plans. This can lead to very difficult conversations whenever patients receive statements for their services.

For these reasons, it is essential that you are verifying patient benefits prior to their initial appointments. Several Medicare Advantage plans also require authorization for different services. If authorization is not obtained, then all services will be denied with no hope for recoupment.

Patients also need to be told up front what their responsibility is estimated to be and as a provider, you need to collect as much upfront as possible. Providers cannot afford to not collect the patient portion of Medicare Advantage plans because of how low the reimbursement is to begin with.

Do you have questions about how Medicare Advantage is impacting your bottom line? Contact us today to learn more about how LRS can help protect you against denials, increase your reimbursements, and keep you from becoming a patient collection agency.