Yakima hospital abandons Medicare plan after outcry

Oct. 10--YAKIMA, Wash. -- Virginia Mason Memorial, reversing course from a decision last week, will not require Medicare patients receiving primary care services to use Medicare Advantage insurance.

The health care organization sent out letters to patients that said as of Jan. 1, 2020, its primary care providers would only serve Medicare patients using Medicare Advantage plans.

Hospital officials said Tuesday while Virginia Mason Memorial is committed to finding ways for its primary care clinics to provide more efficient, safe and affordable health care, requiring Medicare patients to switch to a specific insurance plan was the wrong tactic.

"I take responsibility," CEO Russ Myers said during an interview Tuesday afternoon. "It was a decision, had I known about those complexities, I would have not made."

Patients will receive a letter in the coming days that explains why the hospital reversed its decision.

Myers said after receiving feedback from patients, it clearly would be difficult for many Medicare patients to switch to Advantage plans. About 12,000 Virginia Mason primary care patients are on Medicare, and out of that total, just a few thousand are on Advantage plans.

Medicare Advantage is sold and administrated by private insurance companies, rather than the federal government, which sells and administers what is known as original Medicare and several supplemental plans. For example, some patients were part of retirement plans that covered supplemental coverage premiums, a benefit they would lose if they switched to a Medicare Advantage plan, Myers said.

Rather than require patients to switch, Memorial will focus on an education campaign in the next year.

"Our goal is to allow for choice, but for people to choose (Medicare Advantage) when they are educated," Myers said.

The Advantage model

Health care providers receive monthly payments for each Medicare Advantage member, rather than reimbursement for each medical service, under Medicare Advantage.

The model, Myers said, puts the focus on positive health outcomes. Under the programs Memorial designed around Advantage coverage, a patient works with a care coordinator, who provides services ranging from appointment reminders to taking patients water when they are unable to leave home on a hot day. The coordinator also may administer more customized programs for those with health issues such as diabetes.

Through this model, Myers said, the provider can better assess the patient's health over time and provide more effective care.

Some of those specific services are not offered to patients covered by other Medicare plans, Myers said.

The move would help Memorial better weather continued reduction in reimbursements for services to Medicare and Medicaid patients, which make up about 70 percent of the hospital's reimbursements overall.

The letter to patients last week said the decision allowed providers to serve the greatest number of Medicare patients possible while "maintaining a sustainable clinic practice."

"We know based on fiscal policy that Medicare reimbursements are challenged, have been challenged and will continue to be challenged," Myers said. "Health care systems across the country are feeling that as we are."

Maintaining access

With a 60 percent cut to Medicare on the table in Congress, along with reduced reimbursement rates, there has been a trend among primary care groups -- but not hospitals -- to limit care to those with Medicare Advantage coverage, said Andrew Busz, policy director of finance for the Washington State Hospital Association.

"I think this has been the case for freestanding primary care groups for a long time," he said.

If the cuts to Medicare go through, Virginia Mason Memorial will be particularly impacted, with losses of millions of dollars annually in reimbursements, he said.

"All these things are part of a larger dynamic we have in our medical system," Busz said.

But Memorial is the only hospital he's heard of that considered a Medicare Advantage mandate.

Astria Regional Hospital wouldn't consider such a move because it would limit access to health care for many patients, said Dawn O'Polka, chief executive of marketing and communications.

"We believe that access to primary care physicians and providers is extremely important to the overall long-term health and well-being of the people living and working throughout the Yakima Valley," she said. "Establishing a trusting relationship with a primary care physician opens up communication and ensures patients receive the right care at the right time and place. This is especially important for older adults."

Adding a mandate without sufficient feedback from patients is problematic, as it could cause them to feel like their access to care or health care coverage is at risk, even if that's not actually the case, said Beionka Moore, executive director of the Washington Rural Health Association.

While Moore could not comment on Memorial's decision, since the hospital is not a member of the association, she felt in general that "organizations can do a lot better educating the public before they try to make changes."

Moore said it remains to be seen whether the Medicare Advantage coverage and payment model will yield significant long-term savings, either for patients or medical providers, as there's not a lot of data that measures those outcomes.

"We hope it's a better model, but we're not absolutely sure," Moore said.

Encouraging a switch

Myers said that with Memorial no longer requiring patients to switch, it will focus on talking to patients, either one-on-one or through public forums, to get feedback as well as to explain what it sees as the merits of switching to Medicare Advantage.

While Myers acknowledges the challenge of getting people to switch, he said he's still focused on the big picture -- providing quality care while reducing costs.

"When you have more quality, it is more efficient and less expensive," he said.

Richard Miller, a Yakima insurance broker who works with about 700 Medicare customers, said there would have not been enough providers outside Memorial's primary care network who could have taken on patients who weren't able or willing to switch to the Medicare Advantage plan.

Miller said premiums may be smaller with Medicare Advantage, but some people could pay more in out-of-pocket costs than an original Medicare plan with supplemental coverage.

He was glad Memorial reversed its decision but hoped that it would make more of an effort to engage with patients and other stakeholders.

"I would like Memorial involve other parties in their educational process if they're going to convince people that it's good for them," he said.

It may be hard to convince some to switch.

Selah resident Ron Caldwell, a retired beverage salesman, said he was shocked when he first heard about the Memorial's move, but he's thankful the hospital has backed off.

In addition to Medicare, he and his wife -- a retired schoolteacher -- rely on a supplemental insurance plan that covers other care original Medicare doesn't. Caldwell is undergoing cancer treatment and is happy with his current coverage, but would have to drop the supplemental plan provided through his wife's retirement from the Selah School District if he were to switch to an Advantage plan.

Caldwell and his wife pay $473 monthly premium for the supplemental insurance that provides additional medical, dental and unlimited eye care, he said.

He has an annual deductible but no co-pays that are charged in Advantage plans.

"Once you get past the deductible, the plan is pretty darn good," Caldwell said. "I don't think an Advantage plan is good for a retired guy like me. I don't know what I would get with an Advantage plan; I'm glad they backed off."

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