Humana touts success of value-based Medicare Advantage reimbursement models

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Humana says its Medicare Advantage members enrolled in value-based arrangements experience better care quality and healthier outcomes--all while helping trim costs.

The insurer experienced 20 percent lower costs last year for members who were affiliated with providers in a value-based reimbursement model versus estimates for fee-for-service (FFS) Medicare costs, according to a company announcement.

Members with chronic conditions in value-based MA plans experienced better health outcomes on average, which is significant since the Centers for Disease Control and Prevention has said chronic ailments are responsible for 86 percent of U.S. healthcare costs, the company said.

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Humana, which manages the plans of 3.1 of the 18.5 million MA enrollees, said that approximately 1.2 million of its MA members are affiliated with providers in value-based reimbursement models.

Further, the announcement also notes:

  • Providers participating in value-based payment models had 19 percent greater care quality scores than providers in standard FFS relationships.
  • Emergency room visits were 6 percent lower among patients in value-based arrangements than those in FFS arrangements.

Medicare Advantage has long been seen as a catalyst in the shift from FFS to value-based care, but health plans have said convincing providers to work with them on such arrangements remains challenges.

A recent report found that 25 percent of all payments by insurers were linked to alternative payment models that align reimbursements with cost and quality indicators or coordinated, population-based care. Rewarding value over volume is likely to become more commonplace moving forward, but with 10,000 people becoming newly eligible for Medicare every day, the industry must prepare for more volume, too.

For its part, Centers for Medicare & Medicaid Services gave the green light to health plans in three additional states next year to test value-based insurance design (VBID) models in the Medicare Advantage space. VBID models have shown promise in aligning consumer and health plan issuers’ incentives.