Fee-for-service Medicare holding back innovative care models for seniors, experts say 

Skilled nursing facility
Fee-for-service Medicare hinders innovative care models targeting seniors, experts say. (Getty/Rawpixel)

Providers, both long-standing ones and new entrants, are devising ways to better care for seniors, but the fee-for-service payment model stands in the way, experts say. 

More than two-thirds of Medicare beneficiaries are enrolled in the traditional payment model, which lacks the incentives needed to push providers to dedicate resources to meet seniors’ nonmedical needs, a crucial strategy to improve their health. 

“Current care models aren’t really serving anyone well,” said Rushika Fernandopulle, M.D., CEO and co-founder of Iora Health. “But they’re especially not serving seniors well.” 

Free Daily Newsletter

Like this story? Subscribe to FierceHealthcare!

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

Fernandopulle’s group is one of the new entrants seeking to shake up geriatric care. Iora, which operates 35 practices across nine states, is built around providing strong primary care with a focus on lower costs. They do that, in part, by addressing both upstream and downstream social needs for patients. 

Iora's business model works thanks to Medicare Advantage, which offers a capitated payment rate and thus more flexibility for its clinical teams to address patients’ nonmedical needs. 

Fernandopulle was among a slew of speakers at a summit on aging hosted in D.C. by the Alliance for Health Policy on Wednesday. The urgency to rethink how Medicare covers its beneficiaries’ needs, and how providers approach those needs, was a common theme.  

RELATED: Medicare Advantage insurers routinely issue improper payment denials, OIG finds 

Another focus area for policymakers, experts at the event said, is supporting and bolstering the community groups that can address the social needs of the elderly. Despite the amount of time and money spent on medical care, the majority of what determines a person’s health is outside of that sphere. 

Lucy Theilheimer, chief strategy and impact officer for Meals on Wheels America, said her group is a prime example of one that’s not being utilized to its full potential due to lack of investment. Meals on Wheels organizations are “now savvy businesses” that know the healthcare industry and have the infrastructure to close gaps in care coordination, she said. They just don’t have the resources to really take advantage of those opportunities. 

For example, as people who frequently visit elderly patients’ homes to deliver food, Meals on Wheels staffers could also conduct safety checks and flag potential health concerns. 

RELATED: Hospitals prepare to care for an aging ER population 

“These are eyes and ears in the home that can be a true extension of the healthcare system,” Theilheimer said. 

Report released on making Medicare work

The Bipartisan Policy Center issued a report with a similar message, offering several recommendations for making Medicare work better for patients with serious illnesses.

“Individuals with serious illness may live for many years with a health condition,” the center said in the report. “The rapid increase in the number of Americans over age 65 with serious health conditions and functional limitations has spurred researchers and practitioners to focus on and advocate for more effective and person-centered models of payment and delivery of services under Medicare.” 

Suggestions to address those concerns included:

  • Developing and piloting a new payment model designed specifically for this population.
     
  • Enacting legislation that would eliminate copayments for chronic care management and advanced care planning.
     
  • Building a model contract designed to facilitate work with community groups and nonhealthcare services.
     
  • Reconsidering changes to coding proposed in the 2019 physician fee schedule, which could impact these patients.