29 minute read
INTERVIEW
Improving the Health of All People
Lisa Shannon, CEO, Allina Health
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Taking over from Penny Wheeler are some big shoes to fill. What can you tell us about how she has helped you to continue her legacy?
I feel an incredible pride and honor to be able to lead Allina Health at this time following Dr. Penny Wheeler, who is a tremendous leader for our organization and who brought me to the organization. I am privileged to have been able to work alongside Penny for the last four years. She has been an exceptional leader, mentor and friend and I am grateful she is extending her service as a member of our Board of Directors.
As I look to the future, I hope to accelerate the foundation we have laid as an organization to ensure every part of our system works in coordination to provide a seamless experience for our patients, while continuing our momentum to change how health care is delivered to serve all patients and create more access and greater affordability.
What can you share about how the Allina Health Aetna partnership has developed?
Allina Health/Aetna was developed as a way to bring together two health care organizations with proven reputations for caring for the community with a goal of delivering an expert, cost-effective, personal and more comprehensive approach to health and wellness. Some examples of how we are delivering value-based care to patients are alignment on incentives and motivations to optimize patient health, sharing of real time clinical data to ensure holistic and personalized care and creating a streamlined patient experience by cross collaboration of our customer experience teams.
Please tell us about the new Allina Health Cancer Institute?
The Allina Health Cancer Institute redefines how cancer care is delivered by providing comprehensive, expert cancer care that puts patients at the center and surrounds them with dedicated and compassionate caregivers, who work as a coordinated team to provide treatment and remove stress and inconvenience, allowing our patients to focus on healing.
We recognize that cancer care can be complex and overwhelming–that’s why we’ve set out to reimagine cancer care by taking the right steps to ensure that every part of our system works in coordination to create an effortless care experience that fits the lives of our patients and their families. We believe a seamless cancer care experience is one of the most important services we can provide.
The unprecedented challenges of COVID-19 are now echoed by the Omicron variant. What stands out in your mind around how Allina has reacted to the ongoing pandemic?
Our teams are 100% committed to caring for the communities we serve. They are not only dedicated to providing high-quality, compassionate care to our patients; they are deeply dedicated to each other. Our teams set a high bar for themselves, and they consistently strive to be best at what they do.
The resiliency and humanity I have witnessed, despite how fatigued and challenged our teams have felt, is nothing short of remarkable. Our teams have come together and rallied to continue caring for our community in the most challenging of circumstances–we quickly pivoted to virtual care, found new ways to connect patients to their loved ones during times when we couldn’t have them at the bedside and quickly implemented important safety measures as part of our Safe Care Commitment to assure our patients it was safe to receive the in-person care they need, whenever they needed it.
I’m inspired by our entire team because it is truly extraordinary to watch the compassionate work that everyone is involved in, not only in the pandemic, but prior to COVID-19 and for countless other care needs that our community has.
Another challenge that has become front and center is health care equity/social disparities in health care. How has Allina addressed these issues?
For our organization, the interlocking crises of a global pandemic, economic inequality and systemic racism have led us to an inflection point in how we seek to understand our role as a health care provider—to facilitate change for those we are privileged to employ and serve across Minnesota and the region. We are committed to eliminating racial disparities and inequities in care for all. As an organization, we have implemented a DE&I council that I lead, created an operations committee that includes representatives from teams such as human resources and community partnerships and we’ve developed employee resource groups to empower employees at every level to become advocates.
Our DE&I goal is to improve the health of all people in our communities by using our collective strength as a care provider, employer, purchaser and community partner to eliminate systemic inequities and racism. We acknowledge this is a long-term journey, and as an institution we have much to learn.
Please tell us about the Allina Integrated Medical (AIM) Network.
The Allina Integrated Medical Network brings together physicians and Allina Health to
provide market-leading quality and efficiency in patient care by ensuring patients have easy access to quality, affordable health care. The network is positioned to support the achievement of better collaboration and integration across the continuum of care through technology, contracts and support services.
Allina is very active in the field of medical research. While there are too many outstanding projects to cite which ones come to mind first?
One of the most important clinical trials we conducted was the ENSEMBLE study. Allina Health was the only clinical trial site in Minnesota to participate in Janssen Pharmaceutical’s (part of Johnson & Johnson) COVID-19 vaccine study, during phase 3 of its clinical trial. Our commitment to clinical research has remained steadfast during the unprecedented challenges of the COVID-19 pandemic. The Allina Health Research team was well-positioned to meet the rapidly evolving COVID-19 research needs in support of our employees and the communities we serve. Through our partnerships with other organizations and the robust research infrastructure built over many years, we have been able to quickly pivot to a research team focused on understanding COVID-19 treatments, protocols and safety, while safely continuing our many other areas of research.
Physician burnout has been on the minds of many health care organizations. While clearly it is even more important now, what are some of ways Allina is dealing with these issues?
We respect and value the important contributions of all our employees, and we recognize it is a very challenging time and our caregivers are weary mentally and physically. We are focused on supporting our entire team through mental health and well-being programs, benefits, pay, career development and more. We are and will continue to listen to what’s most important to our employees. Bringing Whole Person Care to life for those who serve is an important part of our ongoing commitment and one of my highest priorities.
What are the biggest challenges you see in the future for Allina and health care delivery as a whole?
Throughout my entire career, I have remained passionate about quality care and elevating the voices and expertise of those who are doing the work to deliver on our caring mission. Each of us–employees, patients and community–members have a role to play in creating health care that works for all of us.
This is more important now than ever as we navigate through some of the most challenging times that health care has faced in decades. And yet, these same challenges present us with opportunities to learn and adjust how we can better provide more seamless, affordable, accessible quality care. I believe that listening to all voices is critical to providing the highest quality, compassionate care for the communities we serve.
Lisa Shannon, is president and chief executive officer of Allina Health. Prior to her appointment as CEO she served as president and chief operating officer. Before joining Allina Health, she held the roles of chief operating officer and president of health system delivery, for KentuckyOne Health, the largest integrated health system in Kentucky.
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3Health Care Supply Chain Dynamics from cover
but it was the life or death demands of World War II that brought supply chain management to its next level. Simple innovations like the invention of pallets, storage systems and supply warehouses ushered in the use of computers for tracking, projections and inventory control. Today, supply chain management involves a globalized network that leverages artificial intelligence and highly trained industry professionals who utilize an ever-expanding array of delivery methods and vehicles. Two years ago, the COVID pandemic turned the fledgling global industry of supply chain management upside down. Health care delivery is unique from other business sectors for many reasons, so it is not surprising that supply chain concerns are unique. The pandemic brought the acute shortage and inability to deliver PPE, ventilators, vaccines, etc., to the fore. As fast as these problems were solved, new ones arose. The more people who were trying to fix things, such as mandates concerning access to health care services, the more new problems arose. The rapid development and subsequent deployment of the MRNA vaccine stretched the borders of supply chain management, as does the delivery of booster doses.
One of the things that makes health care unique in terms of supply chain considerations is that we are in the business of manufacturing health.
While it is a tangible commodity and subject to more measurement than any other industry sector, through more different lenses and metrics, it can also be extremely subjective, employing concepts such as quality-adjusted years of life. Health care supply chain dynamics are further complicated by radical variation in how and where the care is provided. The supply chain concerns of a two-physician primary care office are just as legitimate as those of the Mayo Clinic, but the scale and challenges are very different. As a teaching hospital serving many of the counties We saw prices increase most underserved, Hennepin Healthcare System by 100%-200% where (HHS) has different demands than systems such we had to utilize third as Allina Health or M Health Fairview, but there party local distributors.. are also many base line similarities.
Assessing the challenges
To address the difficulties of being certain our providers have the tools necessary to deliver the best possible care for our patients, HHS has spent many years developing a department of supply chain management. To get where we are today took a methodical approach to our maturity progression spanning over five years. The mindset and determined needs are embraced by everyone on the team, and it ensures we are all in this together. We evaluated our maturity in three areas: people, process and technology. People We needed to make sure we had top talent that embraced change. Leadership was a key factor in this progression, as we needed to make sure we kept the team engaged and involved in the decision making process. We therefore created a sense of ownership with team members. Another key factor was mindful hiring. As staff moved on to other positions, we made sure we brought in top talent to help progress the maturity journey. We looked for talent that was good fit with our existing leadership structure, as well as candidates who had forward thinking ideas about improving and committing to operational excellence and employee engagement. Process As we evaluated the operations as a whole, the one factor that stood out was the daily inconsistency of the work we performed. Everybody had their own way of performing a task or running a report. This led to gaps in service and information that adversely affected the reliabilty of business decisions. An example is the way we reviewed our contracts. Each individual FOR ALL STAGES OF LIFE had their own style of review and timeline. We brought the group together Low- and high-risk obstetrics, for a working session to discuss possible improvement tactics, which resulted including advanced maternal age. in an increase in completion on time from 50% to 98%. This practice is Certified nurse midwifery. still maintained and is monitored bi-weekly. We also looked at our logistics, Gynecologic care, including procurement and sterile processing departments and decided to go back to well-woman screenings and the basics. We therefore developed standard operating procedures (SOPs), in-office procedures as well as updating our departmental policies to reflect the future state of Gynecologic surgeries, including minimally invasive supply chain. Once all our SOPs were updated, the next phase was to train surgeries and robotics for all staff to the new standards. This enabled us to feel confident that the conditions such as endometriosis continued improvement of our processes would drive efficiencies across the and pelvic organ prolapse board and not for just one individual or shift. In addition, when asked to present data or opportunities to our executives, we knew the information was accurate and everyone was now running the same reports. Technology In order for technology to work, you need the people and processes working in sync. Technology is meant to enhance your people and
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processes. If they aren’t working together, technology will be impaired. This was by far the most challenging area to drive maturity as capital funding was limited. Our approach was to inventory our existing system instead of going out to the market to find the best of the best. What we found was we already had what we needed to create a maturity path in this area. We looked at our reporting process and how we could make our customers understand the data a bit more easily. We used Power BI (Business Intelligence) to help provide a clear, one screen visual of what our reports were meant to convey. By using Power BI, rather than Excel spreadsheets, we eliminated the potential for confusion.
Enter the pandemic
When our people, processes and technology were in place with positive results realized daily, the pandemic hit. It was stressful at first because we didn’t know the length or impact it would have on our organization. However, by having processes and systems in place, we were able to pivot and create new processes to accommodate this new normal. We seemed to have a grasp on the demand until our manufacturers and vendors weren’t able to keep up with demand and product was dried up. Our driving force was to ensure our patients and staff had what they needed to feel safe.
We had multiple command centers open (system wide and supply chain) to keep the communication fluid. Our supply chain command center sometimes met three times per day to determine where we were able to source hospital-grade personal protective equipment (PPE) and other vital supplies and equipment. We looked at our backorders daily and worked to identify third party smaller trusted distributors from whom we could source product. This helped us grow our vendor relationships, which we would need to ensure we were prioritized for future procurement. We also quickly realized the need for updated days on hand (DOH) of our inventory to send to our hospital incident command center (HICS), as well as our departments across the hospital, to facilitate understanding of their inventory levels. We established a visual stop light dashboard (red for < 14 DOH, yellow for 14 through 29 DOH, and green for > 29 DOH). This enabled everyone within our health care system to easily identify our PPE status. By redefining and standardizing our processes we were able to pull reliable data quickly and efficiently when needed.
Rethinking the future
By having our people, process, and technology in line, we were able to come together as a team to understand the situation at hand and implement systems and processes adapted to the pandemic. As we come up on two years of the pandemic and our PPE distributors are now healthy with their inventory, we are seeing a shift in supply chain shortages which have been more disruptive than those at the onset of the pandemic. We are seeing our supply and equipment shortages move from a couple dozen items to now several hundred at any given time. Whether longer lead times to items held at ports, lack of cargo containers to transport product, lack of trains and trucks due to worker shortages, or just a sheer lack of raw material to manufacture goods, we are not seeing a pattern of specific categories being affected; rather this shortage is showing all across the board. The challenge seems to be a new backorder every day our team needs to addres.
Early on in our maturity journey we identified an opportunity to use product substitutions in the event we couldn’t obtain the original product. This initiative took several years and is still ongoing to this day. By placing clinically approved substitutions up front, we didn’t have to go through the rigor of tying up critical resources at critical times.
As we look to the future of supply chain, we learned a lot over these two years. Previously, we relied heavily on driving business and value through one distributor; diversification among distributors will help driving standardization across our organization. In the future, we want to be as flexible as possible, so we have not put all of our eggs in one basket. Neither just-in-time inventory or lean inventory will be sustainable methodologies with all product lines, as these practices will now lead to shortages and stockouts as lead times have lengthened. Another way we are rethinking future supply chain is by looking at offshore versus onshore manufacturing and distribution. Offshore will help cut down lead times and increase product reliability. However, we need to realize this new supply chain comes at a cost. Managing cost will be the biggest challenge as health systems already have narrow margins. We saw our transportation costs double, we saw our prices increase by 25% where there were raw material shortages and we saw prices increase by 100%-200% where we had to utilize third party local distributors. This will challenge health care supply chains as we continue to mature and drive non-value-added cost out of our system to accommodate the new norm. But by having your people, processes and technologies in place, it’s achievable.
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K Luis Valadez is Senior Director, Supply Chain Administration at Hennepin Healthcare.
3Medicare Advantage Overpayments from cover
These tactics includes incentives to order fewer services, limiting patient choice of doctor and hospital and micromanaging doctors.
But the introduction of HMOs (and after 1997, all types of insurance companies) into Medicare did not cut Medicare’s costs. Throughout the half century during which insurance companies have participated in Medicare, they have raised Medicare’s costs. They have been paid more, at times much more, to insure their enrollees than if those enrollees had remained in the original Medicare program.
The Medicare Advantage program
Not surprisingly, the large overpayments have facilitated enormous growth in the Medicare Advantage program, the current name of the Medicare program in which insurance companies participate. Today, 46% of all Medicare beneficiaries in the country, and 56% of beneficiaries in Minnesota, are enrolled in one of the Medicare Advantage insurance companies. Minnesota’s rate is second only to the 57% rate for Hawaii. Ten giant insurance companies, led by UHC Healthcare, Humana and CVS Health Corporation, account for four-fifths of the enrollment in Medicare Advantage plans.
How did this happen? Medicare was enacted, after all, because the insurance industry did not want to insure the elderly. And HMOs were allowed into Medicare only because they were expected to lower Medicare’s costs. Why has Medicare overpaid insurance companies for half a century?
We can eliminate one explanation immediately: that Congress didn’t know about the overpayments. Beginning in 1980, analysts inside and outside the federal government regularly published research demonstrating that Medicare was overpaying HMOs. Note that the phrase fee-for-service (FFS) refers to the traditional Medicare program in which doctors and hospitals are paid a fee only after they render a service. In contrast, Medicare Advantage insurance companies are paid a lump sum per enrollee in advance. In a 1995 report to Congress entitled “Growing Enrollment Adds Urgency to Fixing HMO Payment Problem,” the US General Accounting Office (GAO) stated, “Medicare has paid HMOs more than it would have paid for the same patients’ care by fee-for-service providers.” In a 2005 report entitled “Payments Exceed Cost of Fee-for-Service Benefits, Adding Billions to Spending,” the GAO stated, “It is largely . . . excess payments, not managed care efficiencies, that enable plans to attract beneficiaries by offering a benefit package that is more comprehensive than the one available to FFS beneficiaries, while charging modest or no premiums. Nearly all of the 210 plans in our study received payments in 1998 that exceeded expected FFS costs….”
The explanation for the overpayments is two-fold: the insurance companies have always enrolled healthier beneficiaries (a problem known as favorable selection), but they have been paid as if they attracted beneficiaries of average health. For example, if the average annual cost of insuring a beneficiary in the traditional Medicare program was $10,000 and United Healthcare (UHC) enrolled healthier beneficiaries whose average cost was $9,000, it could be said UHC enjoyed favorable selection. If the Centers for Medicare and Medicaid Services (CMS, the current name of the agency that runs Medicare) were to pay United $10,000 for each enrollee, the overpayment would equal $1,000 per enrollee. The obvious solution would be for CMS to pay UHC a premium commensurate with the health status of its enrollees – in this case, $9,000. But CMS has never been able to reduce its payments to insurance companies to match the lower cost of the healthier beneficiaries they enroll.
There is no solution to either problem. The favorable selection problem will persist as long as a Medicare Advantage program exists alongside the traditional program. CMS’s effort to improve the accuracy of its payments to Medicare Advantage plans only made the problem worse.
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Favorable selection
Medicare beneficiaries and Medicare Advantage plans both contribute to the favorable selection problem.
Medicare beneficiaries contribute because they vary in their willingness to give up choice of provider (doctor and hospital) in exchange for the extra services the Medicare Advantage plans can afford to offer (because they are overpaid). Sicker beneficiaries are less likely to want to join an HMO or any other type of insurance company that limits choice and attempts to influence physician-patient decisions.
The insurance companies aggravate favorable selection by their advertising and recruiting tactics (cherry-picking) and their treatment of the sicker enrollees they cannot avoid (lemon-dropping). Medicare Advantage plans are not allowed to refuse to enroll applicants, but they can encourage healthier beneficiaries to apply by their marketing tactics (where they market, what they say in their advertisements and what they cover at little or no expense to the enrollee), and they can encourage sicker enrollees to disenroll and return to traditional Medicare by denying or delaying services.
Dozens of studies published over the last half century have shown that insurance companies that participate in Medicare have enjoyed favorable selection. Here are five examples spanning the last 40 years.
A study published by Paul Egger in 1980 concluded that beneficiaries who joined Group Health Cooperative of Puget Sound (one of the nation’s oldest HMOs) “had a rate of hospital inpatient use over 50% below the comparison group” consisting of beneficiaries in traditional Medicare.
A 1988 report to the Health Care Financing Administration (the former name of the agency that runs Medicare) stated that the beneficiaries who enrolled in Medicare HMOs cost 21% less than those who stayed in traditional Medicare.
A study published in “Medical Research and Review” in 1997 concluded “in the six months prior to their enrollment, new HMO enrollees use on average 37% fewer services than do beneficiaries in traditional fee-for-service Medicare. Furthermore, HMO disenrollees use 60% more services in the six months after disenrollment than do fee-forservice beneficiaries.”
A study published in the “New England Journal of Medicine” in 1997 found HMO enrollees were much healthier than traditional Medicare beneficiaries when they signed up with HMOs, and those that later disenrolled from HMOs were much sicker. The authors reported, “Before
their enrollment in HMOs, the HMO enrollees had a rate of hospital admissions that was two-thirds the rate in the fee-for-service group.The members of the HMO-disenrollment group had a substantially higher rate of [hospital] admissions than the fee-for-service beneficiaries…” The title of this article was, appropriately enough, “The Medicare-HMO revolving door: The healthy go in and the sick go out.” A study published by the Kaiser Family The money currently spent Foundation in 2019 found that Medicare on insurance companies’ beneficiaries who enrolled in a Medicare Advantage overhead could be used to raise plan were 13% less expensive than the average reimbursements to doctors. cost of a traditional Medicare enrollee. In 2016, beneficiaries who stayed in traditional Medicare incurred Part A (hospital) and B (physician) medical expenses of $9,362 on average, while those who signed up with a Medicare Advantage plan cost just $8,109.
Risk adjusting premiums accurately is impossible
If favorable selection and the overpayments have been obvious for four decades, why hasn’t CMS eliminated the overpayments? Why doesn’t CMS just reduce the premiums down to a level commensurate with the better health–the lower cost–of the insurance companies’ enrollees? Medicare Advantage Overpayments to page 144
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3Medicare Advantage Overpayments from page 13
Answer: because CMS sets the premiums prior to the year for which the beneficiaries are enrolled, and predicting what each insurance company’s pool of enrollees will cost the next year is a primitive science.
Between 1973 and 2004, CMS (and its predecessor, the Health Care Financing Administration) tried to risk adjust premiums downward using four factors: age, sex, Medicaid status and nursing home status. Although each of these factors is correlated with medical spending (80-year-olds typically cost more than 65-yearolds, for example), the correlation between these demographic factors and spending is very weak. They only predict one percent of the variation in spending. To explain what that means, let’s go back to the United Healthcare example. If UHC was overpaid by $1,000, CMS’s demographic risk adjuster would only call for reducing UHC premium payments by one percent, or $10, from $10,000 to $9,990. UHC would still be overpaid by $990.
In the Balanced Budget Act of 1997, Congress instructed CMS to improve the risk adjuster by adding diagnoses to the four demographic factors. It’s easy to see the logic in that proposal: People diagnosed with diseases and conditions cost more than people with no diagnoses, and people with serious diagnoses cost more than those with mild or temporary diseases or conditions. Medicare beneficiaries with diabetes, for example, cost 1.5 times as much as the average beneficiary; beneficiaries with a cancer diagnosis cost 1.7 times as much. CMS spent the next seven years preparing a new risk adjuster called the Hierarchical Condition Categories (HCC) risk adjuster. To the four demographic factors, CMS added 3,000 codes for diagnoses. The addition of all those codes greatly improved the accuracy of the risk adjuster. The new HCC could predict 11%, and within a few years, 12% of the variation in spending between individual beneficiaries. But 12% is still negligible. To return to our United Healthcare example, now CMS can reduce UHC’s overpayment by 12% from $1,000 to $880. The overpayment is still immense. Twelve percent is obviously 12 times better than one percent, but it still gives Medicare Advantage plans an enormous incentive to continue cherry-picking and lemon-dropping. Another way to illustrate the crudeness of the HCC risk adjuster is to demonstrate its disparate impact on the healthy and the sick. According to the Medicare Payment Advisory Commission (MedPAC, an agency created by the Balanced Budget Act of 1997 to advise Congress on Medicare), the HCC results in huge overpayments for the healthiest beneficiaries and enormous underpayments for the sickest. For example, looking at the healthiest 20% of beneficiaries; it overpays by 62% but for the sickest one percent, it underpays by 29%. MedPAC and researchers at CMS who were hired to develop the HCC have made it clear that for both technical and financial reasons it is not possible to improve the HCC by even a small amount. The HCC was implemented between 2004 and 2007. It backfired immediately. It gave the insurance companies an incentive to make sure every disease and condition is listed in patients’ medical records (which is legal), as well as an incentive to add diagnoses to medical records that are inaccurate (they overstate the seriousness of the condition), inappropriate (the diagnosis was made by someone not authorized to make the diagnosis) or flat out fraudulent. Adding inappropriate or fraudulent codes is called upcoding. Both behaviors–more thorough listing of legitimate diagnoses and upcoding– increased CMS’s payments to the Medicare Advantage plans more than the increased accuracy of the HCC reduced them.
Exceptional Personalized This conclusion is supported by the Medicare Advantage plans’ Neurologic Care behavior following the implementation of the HCC. Medicare Advantage plans began to advertise richer benefits for lower premiums, and that in
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How much is enough?
Insurance companies cannot make a profit off Medicare beneficiaries if they are paid no more than what those beneficiaries would have cost had they remained in traditional Medicare. The reason is their high overhead.
UHC and all other Medicare Advantage plans incur administrative costs equal to about 15% of their total Parts A and B expenditures on average. Those costs include the cost of advertising, creating networks of providers that enrollees must use, influencing and overruling doctors, lobbying and profit. Profit constitutes a quarter to a third of that 15% figure. But insurance companies cannot cut spending on hospitals and clinics by 15%. Experts guesstimate they can only cut medical spending by about five percent. Research on how much Medicare Advantage plans reduce utilization of medical services is sparse and inaccurate because plans do not publish information on how they allocate their revenues. This means insurance companies must be overpaid by at least 10% in order to induce them to participate in Medicare Advantage. And since insurance companies need additional overpayments to finance the extra benefits, e.g., dental care, eye glasses, hearing aids, that lure beneficiaries out of the traditional program into Medicare Advantage, the overpayments must be even higher than 10%.
Bruce Vladeck, who administered CMS during Bill Clinton’s presidency, discussed this issue in an article he co-authored two decades ago for the journal “Health Affairs.”
Managed care plans do not have to be just more efficient than FFS Medicare,” he wrote, “they have to be a lot more efficient. With administrative expenses in the range of 8 to 25%, [plans] have to incur medical expenditures 10 to 20 % less than FFS…just to break even. In most markets…plans cannot attract enrollees unless they offer additional benefits, which also cost money…”
The subtitle of Vladeck’s article was “Theory meets reality, and reality wins.” That accurately sums up the problem: the theory that insurance companies could save Medicare money was always inconsistent with reality. It was based on hype, not evidence. If it wasn’t inconsistent with reality, why did Congress need to enact Medicare in the first place? Congress enacted Medicare because the insurance industry did not want to insure the elderly (or the disabled, who were added to Medicare in 1972). Overpayment is the reason 46% of all Medicare beneficiaries are insured by health insurance companies today, 50 years after Congress first allowed HMOs into Medicare. If they were paid no more than CMS pays for traditional beneficiaries–a requirement Congress wrote into the original 1972 law allowing HMOs into Medicare–they would not participate.
A deadline looms
Payments to Medicare Advantage plans (including the overpayments) are financed directly by taxpayers and indirectly by lower reimbursements to doctors and hospitals that treat Medicare patients. Taxpayers include: people of all ages who pay the Medicare payroll tax that funds Medicare’s Part A trust fund, all Americans who pay federal taxes and all Medicare beneficiaries who pay what are called Medicare Part B premiums. Thus, virtually all health care professionals and all Americans have a stake in terminating the Medicare Advantage overpayments. It is true that people who enroll in Medicare Advantage plans are getting some of the benefit of the overpayments in the form of coverage for services they couldn’t get if they remained in traditional Medicare. But those services are being purchased by the taxpayer at an unnecessarily high price.
Medicare Advantage Overpayments to page 284
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