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Payers face more provider competition in the Medicare Advantage market

Avalere analysis finds that 54% of recent MA plan entrants are providers

The lines between providers and payers are blurring as more and more providers enter the health insurance market--many with an eye on lucrative Medicare Advantage enrollees, according to a new Avalere report.  

"A lot of capable hospitals are jumping into the [MA] game," Avalere CEO Dan Mendelson tells FierceHealthPayer in an exclusive interview. "So many hospitals are figuring out how to take capitation--this is the future for them. They have to figure out how to deliver meaningful quality."

The analysis found that between 2012 and 2015, 28 plans entered the MA market and now offer 104 plan options, available to 13.6 million individuals. More than half--54 percent of the 28 health plans--are provider-sponsored.

Avalere's findings come on the heels of a recent report from the Commonwealth Fund that shows there is little or no competition in the MA markets in 97 percent of U.S. counties.

But as the field gets more crowded, insurers should play defense by establishing relationships with providers that will reward them for managing patients' chronic conditions, share population health data and infrastructure with providers who might not be able to afford their own, and help them meet the federal government's Star Rating metrics to continually increase clinical quality.

But, Mendelson says, it's important to understand that seniors choose to opt into MA plans. Eligible beneficiaries have choices--they can choose a fee-for-service (FFS) in an accountable care organization, a FFS in a bundled payment option or go the MA route. And, Mendelson adds, the prominent competition for a MA plan isn't another MA plan; it's FFS.

Another reason seniors choose MA plans may be the "robust" plan choice enrollees enjoy, a trend that's expected to continue even as major insurers merge--in part to gain greater MA market share.

For more:
- here's the analysis

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