Whether We Want It Or Not, Medicare Is Transitioning To A Managed Care System

By Mary Johnson, editor

Behind the scenes, traditional Medicare is quietly changing from a fee-for-service system that allows you to see any doctor and pays for all medically - necessary services, to one modeled more like private Medicare Advantage managed care plans.  Medicare has announced plans to enroll more than 30 million beneficiaries currently in traditional Medicare, into Accountable Care Organizations (ACOs) by the end of this decade— whether we want it or not.

That could require those of us in traditional Medicare to get pre-authorization for services far more frequently than in the past, and to get referrals from a primary care physician when we need a specialist.  Medicare is testing new payment models in order to save money.  Networks of doctors and healthcare providers form Accountable Care Organizations (ACOs) which receive flat bundled fees to provide all Medicare covered benefits to enrollees.  If provider groups meet certain metrics for providing quality care, they get to keep part of the savings as profit.  While the changes may save the government a small amount of spending on Medicare — about 2% per year — half of those savings currently are shared with network doctor groups and healthcare providers.

So far, TSCL has seen no reports to indicate whether the savings will be financially advantageous for beneficiaries as well.  Will ACOs slow the rate of increase in the base Medicare Part B premiums (currently $170.10) or pricey supplemental Medigap insurance premiums that currently average about $235 a month for beneficiaries?

Similar to Medicare Advantage plans, ACO providers will profit from not providing whatever Medicare defines as “unnecessary” care.  Medicare is on course to enroll everyone who uses traditional Medicare in an ACO by 2030, whether they have chosen that form of coverage or not.

How should Congress address Medicare’s financing?  Please take our new Seniors Priority Plan survey: https://seniorsleague.org/2022-senior-priority-plan/.