A Prescription for Medicare Advantage Nightmares
Medicare Advantage Nightmares

By 2030, the baby boomer generation will be age 65 or older. That’s right, the baby boomers are becoming baby seniors, with about 10,000 a day crossing the age threshold. For many, that means Medicare Advantage nightmares, but that needn’t be the case.

According to the US Centers for Medicare & Medicaid Services (CMS), nearly half of the total Medicare population is enrolled in Medicare Advantage (MA), the private plan alternative to traditional Medicare.

In fact, MA is the fastest-growing insurance segment in the US and the one with the largest profit pool. We’re talking about a gross margin two to three-and-a-half times that of commercial and individual family plans. That’s huge news for payers—and, when managed appropriately, for members.


But here’s the thing, the average Medicare Advantage beneficiary has a whopping 43 plans available for enrollment. You read that right, 43. And for people with special needs—like nursing care, diabetes, or dementia—the number of plans available has more than doubled since 2018. Hence the issue of Medicare Advantage nightmares.

So many choices can be wonderful, but it can also be overwhelming. And that applies to payers and plans as well as members.

With so many options available, health plans experience an average member churn of about 10 percent every year. Different options. Cheaper premiums. Lower out-of-pocket costs. Better access to care services. Higher plan Star ratings (CMS’s ratings system for plan quality and member satisfaction). There are almost as many reasons to switch as there are plans.

The unfortunate reality for payers is that so much churn impacts top/bottom lines and plan ratings—and a Star rating decrease can lead to losing a contract with the CMS!

Even if that churn is controlled, payers without strong data strategies to govern their plan administration are still at risk of costly compliance costs. Trust us, you don’t want to deal with that kind of headache! A lack of quality in data submissions, overpayment audits, and potential whistleblower allegations under the False Claims Act (FCA) can lead to significant penalties, the loss of previously recognized revenues, and costly litigation.

Our client is a large payer that offers multiple MA plans nationally. Faced with the opportunities and challenges of the MA landscape, it came to us looking for a way to increase revenues, margins, and STAR ratings while reducing compliance risk. It wanted to do away with the Medicare Advantage nightmares.

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We were engaged over an 18-week period to evaluate our client’s plan Star ratings to uncover, assess, and categorize opportunities. There was a lot of work to do. We used our Medicare Outcomes Acceleration framework to guide our work. This framework prescribes a strategy with a set of tactics that helps payers:

  • Uncover the current state of Medicare Advantage business outcomes, practices, and interactions with key stakeholder personas (consumers, departments and employees, providers, partners, and CMS).
  • Review implemented digital capabilities and inventory-supporting technology ecosystems.
  • Assess gaps in business functions, digital capabilities, ecosystem integration, and enabling technology.
  • Compare against an industry best practice blueprint that supports all stakeholder journeys in meeting expected Medicare outcomes.

Our framework helped us deliver a business case with recommendations for maximizing opportunities for revenue, margin, Star ratings, and CMS compliance. As part of our recommendations, we leveraged our suite of IP-as-solution accelerators to demonstrate tangible proof of outcomes for a set of opportunities identified in the business case.


Once we had a clear plan for the business—one that would soothe those Medicare Advantage nightares—we created a roadmap to improve abilities in four key areas: people, processes, data, and technology. We focused on the most important opportunities and made progress step by step, gradually achieving the desired results over time:

  • Availability of a more comprehensive, quality-assured data set.
  • Additional process, people, and technology capabilities.
  • Organizational change management.

This business case demonstrated how the client could drive better population health management in collaboration with their Medicare Advantage provider network. If implemented, our recommendations would allow the client to:

  • Deliver more member-centric engagement experiences and better care outcomes.
  • Collectively improve the overall experience as well as member loyalty to the client’s brand.
  • Improve risk-adjusted and Star quality bonus (provided to 4 or 5-Star plans) revenues across plans.
  • Streamline business processes and automate IT processes to reduce administrative overhead and improve margins.
  • Build a reliable data foundation that can withstand scrutiny from CMS oversight and minimize the risk of regulatory non-compliance to help avoid revenue revisions or negative impacts on the reputation of payers.

Following our advice, the client has started taking steps to improve their data strategy. Their aim is to establish a reliable data foundation that will enable them to enhance stakeholder experience, boost revenue, ensure compliance, and increase margin value.

If you’re seeking a prescription for the challenges that ail your healthcare business, don’t worry—we’ve got you covered. Find out how we deliver connected care experiences in the moments that matter to improve experience, health, and growth outcomes.


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