A halt to marketing by the half-dozen or so private plans that cover the Medicare Advantage (MA) private fee for service (PFFS) waterfront (the top seven plans that account for 90% of the market) was announced late last week –

The economics of primary care geriatric medicine are very difficult. Medicare FFS reimbursement does not support the practice.

One solution we have used is risk contracting. We have been very successful in the Medicare HMO environment. When looked at from the perspective of risk-adjusted capitation payment, we are a very efficient provider. We have turned this into a business model. Not only can we stay in business this way, but we can create an environment which emphasizes care coordination and embodies the principles of geriatrics. We have social workers, an on-site pharmacist, case managers, and trained geriatricians who can spend somewhat more time than your average primary care doctor seeing our high complexity patients. We share risk with another 150 primary care docs, but our aggregate HCC scores are about 40% higher than the rest of our IPA.

Now come the Medicare private FFS plans. We have had numerous patients switch. Most of them have little or no idea what they have done. The patient is told “this is a great deal for you, no problem seeing any doc you want, no restrictions, and it will be cheaper. In fact, if they are hospitalized, it will not be cheaper as the plans in our (major urban) area have higher hospital copayments by far than the Medicare HMO’s. We often do not learn that they have changed until our claims are rejected. The plans pay us at 100%of RBRVS, far less than our experience with risk. We have created an extensive support system for managing our patients, and now there is no financial structure to support it.

As far as I can see, these plans have done nothing whatsoever to serve our patients. They accept a very high risk adjusted capitation every month, significantly higher than traditional Medicare, for which they do what? And they are driving out the Medicare HMO products, which at least have the potential to manage chronically ill people better, and actually do it I believe at least in our case.

This appears to be an amazingly abusive situation, nothing less than an outright gift to the insurance industry.