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Driving Medicare Success Across Market Cycles: A Comprehensive Strategy for Success

April 12, 2024


Industry headlines in early 2024 continue to highlight the lapse in guidance reported by national payors and value-based enablers alike as Medicare Advantage headwinds accelerated at the end of 2023. Several prominent health plans, for instance, concluded the year with Medical Loss Ratios higher than initial projections. They attributed this adverse outcome to unexpectedly higher utilization rates for both inpatient and outpatient care. The factors driving this surge in utilization vary, including expensive specialty treatments, new regulations around Medicare admissions, ancillary benefit utilization (i.e. OTC benefits, flex cards, etc.), and a rise in incidents related to respiratory viruses. Compounding these medical expense pressures are top line impacts on revenue related to declining Star scores (nationally only 42% of plans were greater than 4 Star for 2024 vs. 68% in 2022), the release of CMS-HCC v28, and Inflation Reduction Act changes to Medicare Part D plans. The culmination of all these challenges in the Medicare Advantage market suggests that 2024 is likely to mirror the preceding year, with healthcare organizations navigating a complex landscape of financial strains and regulatory shifts.

The financial pressure on payors is anticipated to increase in the short-term, as these challenges underscore the imperative to contain costs. A key lesson learned for health plans will be the prioritization of investments to sufficiently achieve growth expectations and Star-rating aspirations. While the public carriers are facing a reckoning with their investors, caught in the middle of this utilization increase and revenue shortfall were several value-based care enablers who didn’t foresee the emerging trends and were caught off-guard, failing to protect their almost entirely risk-based business. Now exposed, it is abundantly clear that payors and enablers alike failed to anticipate trends developing throughout the prior year and missed an opportunity to intervene and manage the evolving landscape effectively.

As a leading Medicare Advantage plan, Essence Healthcare, alongside its operational enabler, Lumeris, have consistently demonstrated capability to foresee emerging trends and deploy clinical programs to bend the curve, while maintaining the highest quality patient care. While Essence Healthcare has consistently delivered 5 Star performance for three years in a row, Lumeris has grown to manage $13B in medical spend and nearly 2M value-based lives across the country. Leveraging extensive experience and population data sophistication enables Lumeris to uniquely understand the uncertainties facing the industry and harness the transformative potential of analytics-driven healthcare interventions. Lumeris’ approach to healthcare delivery prioritizes a data-driven approach to enable providers to proactively manage the populations they serve throughout the year, rather than reactively trying to respond to utilization spikes. Lumeris feels strongly that providers leveraging data in this way will sit in the driver’s seat over the next decade as they effectively align their business models to focus on health outcomes, higher quality, and appropriate cost of healthcare through a risk-bearing financial model.

Addressing the complexities of managing cyclical utilization trends requires a multifaceted approach. The last quarter of 2023 showed that those relying on lagging indicators and performance reports were vulnerable to macro trends rather than actively shaping their outcomes in the MA program.

Risk-bearing organizations must be able to both predict and intervene when population data shows a meaningful increase or decrease in care patterns (e.g., decline in year over year preventative visits) in a timely manner.

Lumeris focuses on three key pillars to ensure proactive management of the population and pre-emptively addressing swings in local utilization to ensure strong financial performance while delivering high quality care and patient outcomes. Central to accomplishing this are three primary domains:

Three Primary Domains

Intrigued by our insights on navigating the Medicare Advantage market? Dive deeper into our strategies and solutions by downloading the full whitepaper. Gain comprehensive knowledge on how Lumeris is reshaping the future of healthcare. Don’t miss out on the opportunity to stay ahead in this ever-evolving landscape.




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