Extra predictions: Medicare Advantage, therapy assistants, direct contracting

In the Jan. 3 issue, Part B News issued a series of 2022 predictions about resonant trends likely to have a significant impact on the medical practice industry (PBN 1/3/22). Below you will find bonus predictions assessing additional areas of heightened focus.

Prediction: Medicare Advantage will continue to climb.

It’s a safe bet, as the percentage of Medicare beneficiaries opting for Advantage plans has been growing for years and now hovers around 26.7 million by CMS’ estimate (PBN 9/27/21). But recent developments seem poised to make it an even hotter ticket.

Natalina DeMeis, vice president of Barnum Benefits Advisors in Shelton, Conn., thinks one big draw is the “$0 premium” that payers like Humana are offering; these plans may have higher out-of-pocket costs but still offer “extras” like dental and vision care that will convince leaners.

“More doctors are becoming in-network with these plans, and most carriers have a plan that allows beneficiaries to go outside of the network with higher co-pays,” DeMeis says. “These plans are also attractive to individuals that have money in a HSA [health savings account]. It gives them an opportunity to pay no premium and use the HSA for their copays and deductibles.”

Also driving MA growth: Investor interest. Ian Goldberger, director of transaction advisory services at Kaufman Rossin in Boca Raton, Fla., says that “mergers are exploding in this space” because of the program’s perceived potential expansion into new territories.

Because of demographics — for example, the large Medicare-age population in Florida — Medicare Advantage has flourished mainly in the eastern U.S. But “as some acquiring entities look to expand to states where Medicare Advantage is less developed” — for example, Texas, Nevada and California — “they have strategically purchased groups with insurer reimbursement contracts currently focused on fee-for-service,” Goldberger says. “The thought process for some of our clients has been: Let’s get into the state, start setting up our operations, and then we can focus on transitioning these patients into membership programs focused on full-risk and/or shared-risk models.”

Prediction: Reimbursement cuts and de minimis changes will affect how rehab therapists use their assistants.

When Congress headed off the fee schedule cuts that were proposed for Medicare providers in 2022,
physical therapists, occupational therapists and speech-language professionals had more cause than most to be grateful (PBN 12/20/21). These providers had been facing 7.75% cuts, according to Heidi Jannenga, PT, DPT, ATC, chief clinical officer of therapy EHR vendor WebPT in Phoenix.

But “it’s not all sunshine and roses” for the physical and occupational therapists, Jannenga says, as the physical therapy assistant (PTA) and occupational therapy assistant (OTA) payment differentials from the recent physician fee schedule rule takes effect, resulting in an overall 15% payment reduction to services provided by a therapy assistant (PBN 11/15/21).

Therapy providers now may have “to be strategic about their scheduling practices” by “leveraging assistants more, in order to improve efficiency and increase patient volume,” Jannenga says. “This, in theory, should free up your therapists to take on more patients who need care while improving the clinic’s overall productivity and increasing the bottom line.” She also suggests therapy providers “set expectations with their patients, helping them understand that PTs/OTs are creating the plan of care and that other skilled members of the team like PTAs/OTAs will be helping them navigate their care plan.”

Expect to see more assistants at work and supervising providers more mindful of their time and
utilization.

Prediction: Direct contracting will take off.

The Center for Medicare and Medicaid Innovation (CMMI)has just launched a new version of its Direct Contracting (DC) model, which brings aspects of its risksharing models into primary care (PBN 2/3/20). CMMI says the Global and Professional Direct Contracting (GPDC) model “includes innovative ideas from Medicare Advantage (MA) and private sector risk-sharing arrangements,” and notes that a recent CMS decision on the anti-kickback statute safe harbor for risk-sharing arrangements “is available to protect certain DCE [DC entities’] financial arrangements” and will help the program flourish (PBN 3/8/21).

Critics complain that DC is a giveaway to the private sector that will enrich commercial entrants without improving care. But expert observers don’t expect the criticism to turn the administration around.

“We expect that in spite of some of the recent negative attention on the model in the press, it will continue on in 2022,” says Mara McDermott, executive director of the Value Based Care Coalition in Washington, D.C. In fact, McDermott thinks the administration may “rebrand” the model to increase its appeal. “We believe that CMMI will change some of the model parameters to focus more on providerled participants — so perhaps lower levels of financial risk, changes to risk adjustment and other relatively minor modifications — that would make it more attractive to provider participants,” she says.

Perhaps more importantly, the private equity players who increasingly work in the health care market are attracted by DC. Goldberger of Kaufman Rossin believes “this shift by the CMS to offer value-based care arrangements for original Medicare patients has given support to many buyer’s investment theses, which has accordingly accelerated interest, and further M&A activity, in the space.”

Read the full article on Part B News.