Medicare Advantage (MA) was introduced in 2003 as the Plan C option for Medicare and has been growing in popularity ever since. The recent spike in enrollment has drawn attention, but the latest news may come as a surprise.

Medicare Advantage is about to get even better for its patients.

According to information released by the Center for Medicare and Medicaid Services (CMS), MA will begin offering non-health benefits to its members. This includes transportation for non-medical needs such as grocery shopping and home environmental services to maintain healthy living conditions, such as air quality. These upgrades to the program are for beneficiaries with chronic conditions who have reasonable needs for assistance to improve their health and lifestyle.

That is a tremendous enhancement to a healthcare plan that has already increased its enrollment by more than 30 percent over the last four years. During that same period, the number of people eligible for Medicare has grown by 18 percent. The popularity of MA is keeping CMS busy in calculating Risk Adjustment Factors (RAF) to appropriately fund insurers for the risk of the beneficiaries they enroll.

Is this good news for private healthcare insurance providers?

This is good news for health insurance providers, but great news if they possess the patient data necessary to receive fair reimbursement by the government. Without a complete and recent diagnosis of the patient they’re insuring, an insurer may be filing a lower risk assessment score, which will limit fund reimbursement. The higher the RAF score, the greater amount of funding is appropriated for reimbursement.

Because medical records are kept by healthcare facilities, insurers are often restricted to the diagnoses they view in billing information. They don’t have access to medical charts, which often contain additional information on patients that’s not billed into the system. The only way an insurer can be certain they have a complete medical assessment of the patient they’re insuring is to have their own professionals perform periodic examinations.

Each chronic medical condition diagnosed impacts the RAF score of a patient. While there is a standard rate paid by the government for every member enrolled in the Medicare Advantage plan, reimbursement increases when the risk assessment profile is higher.

A win-win for the insured and insurer

It’s to the advantage of both the patient and insurer to be vigilant in administering periodic examinations. For the patient, it increases the chance of early intervention and preventative care if an ailment is discovered. New illnesses don’t follow a schedule, so there’s no telling when they might emerge. Monthly, quarterly, and annual check-ups afford medical professionals and patients greater opportunities to catch a new ailment early and begin treatment immediately.

The patient data obtained from regular exams also allows the insurer to be properly reimbursed for the services provided. They may discover conditions previously undocumented that will increase the risk assessment score. By filing all existing conditions, the insurer can receive the appropriate funding for the risk exposures they’re covering.

  • Patient has peace of mind that they have an up-to-date health diagnosis
  • Any new ailments or conditions are identified and treated
  • Insurers are filing an accurate RAF score

Estimating Increases in Revenue

To arrive at a true number of a how much an accurate RAF score will increase government funding, insurers need to know the benchmark number for the RAF in their region. The rates vary throughout the country depending on location, which determines how much a patient’s risk assessment score will increase for each point (or fraction of a point) gained.

For example, an average plan benchmark is approximately $800 per point. If a patient’s score rises .4 on the risk assessment scale following an evaluation, it would be worth $320 per month and $3,840 per year. That is for one patient. If those numbers are applied to 600 patients, it’s an increase of more than $2 million of revenue.

The key to being fairly reimbursed by the Medicare Advantage program is a current and thorough examination of patients. Companies such as Transtreme partner with physicians, medical networks, and payors to deliver the high-quality healthcare services that patients deserve. They employ state-of-the-art diagnostic equipment to provide a complete health screening and also diagnose a range of high-risk medical conditions.

For more information on the Medicare Advantage plan and risk assessment scores, contact Chad Wallace, vice president of sales and marketing at HRSI.