Q&A with SCAN Group CEO Dr. Sachin Jain on combination with CareOregon, future of Medicare Advantage

Sachin Jain, MD, has been president and CEO of SCAN Group since 2020. He sat down with Becker's to discuss the company's recently announced combination with CareOregon, along with current and future trends in Medicare Advantage.

With the deal expected to close in 2023, SCAN Group will become HealthRight Group and Dr. Jain will serve as CEO. SCAN Health Plan and CareOregon will remain unchanged for consumers.

SCAN serves about 283,000 MA members and another 30,000 members through four care delivery divisions. CareOregon has about 500,000 members, predominantly in managed Medicaid. The new organization is projected to have annual revenues of $6.8 billion.

Question: You've just picked up about 500,000 new members by combining with CareOregon, mostly in managed Medicaid. Why did you want to enter this space?

Dr. Sachin Jain: We do administer Medicaid through our D-SNP product, which is one of the largest, fully integrated duals plans in the country with 13,000 beneficiaries. But we've never done pure Medicaid.

In the work of both Medicare and Medicaid, our impact is really being a value over replacement health plan. If SCAN were to disappear tomorrow, those members would go to another plan, and they would keep their provider group. Our value is what we do at the interface that's above and beyond the value of the replacement health plan.

My job as CEO of HealthRight will be to increase the replacement value of our respective health plans so that we are better and more impactful than the competitor — otherwise, we're just delivering a commodity. 

Q: There's a record number of MA plans available this year and SCAN is expanding as well. What are your predictions for MA as we head into the new year?

SJ: I think a lot more scrutiny on MA, which is appropriate. Like any policy innovation, there's always going to be unintended consequences that arise from it, and the job of regulators and policymakers is to take a look at some of those consequences and begin to work to address them. The few different categories I think will be focused on are risk adjustment, utilization management and marketing practices. 

One of the things we have to increasingly start doing as people put more and more scrutiny on MA is actually looking at the program that it's replacing — people have chosen MA for a reason. It's a higher value program. The latest estimates I've seen is that after this annual enrollment period, more people will seek MA than traditional fee for service.

I've been thinking about something that I'm calling "Medicare Advantage never events." A big part of our model is administering people's care and sometimes that introduces frictions that unfortunately get in the way of the right things happening. We should be taking a proactive stance on the set of things that traditional Medicare has never done and will never do, such as truly coordinating people's care or operating as someone's health advocate in a critical life event. 

One of the problems that people point out is that our risk adjustment in some cases really overpays for care. What we really want is appropriate payment for the intensity of services, and we want people to require fewer and fewer services, meaning they're healthier. We should be looking at the design of the program to use technologies available to us now so that we can appropriately quantify risk and use something more sophisticated than the hierarchical condition codes that we use right now. 

The CMS Innovation Center could be testing new models of risk adjustment that include real time evaluations using electronic data to apply real risk scores, as opposed to predictive risk scores. Instead, I think we've framed the argument inelegantly by asking if fee for service is better or worse than managed Medicare, as opposed to saying, these are two programs that now exist and they're probably better for different people in different markets. 

I believe the right chassis is some version of global risk and giving risk to clinical provider groups so that they are incentivized to focus on prevention and upstream management, but with the appropriate guardrails to make sure they're not skimping the American taxpayer in the delivery of care. We are now the stewards of health for America's seniors, more responsible than even CMS. That's a pretty awesome and significant responsibility, so we as a society need to make sure that MA plans are delivering on the promises they make. 

Q: CMS star rating measures fell on average this year across the industry. What's your best advice to managed care leaders looking to boost quality ratings?

SJ: Everyone thinks super short term about star ratings. They're not taking that big step back to think about what is fundamentally driving these ratings: low member satisfaction or low participation in preventive healthcare measures, etc. I've been in organizations where people say, 'it's the social determinants of health and these are complex patients.' That's nonsense — our job as an industry is to do better for people. 

It's easy for me to say because I run a plan that's been 4.5 stars for six years in a row, but I think that we allow ourselves to get into sloppy explanations for why things aren't working. Some of the challenges that we're facing is in the investor owned environment — people are squeezing pennies out of rocks in order to meet margin targets, and they're doing it at the expense of the beneficiaries.

Q: CMS is proposing a rule to tie health equity measures to star ratings in 2027. What impact do you think this will have on improving care quality?

SJ: SCAN already does this — we tie closing disparities in our population to executive compensation, so we have an opportunity to really lead in this space. It's important for star ratings to be tied to the things that actually matter and we should really be taking a year to year look at what's relevant in a particular time. For example, COVID-19 vaccination rates in 2023 as a star measure could make things a bit more dynamic.

Q: With all the competition, there's a lot of innovative plans on the market, including the nation's first MA plan for LGBTQ seniors from SCAN. Are there lessons around innovation that can be shared with Medicaid?

SJ: Some of the issues with Medicare and Medicaid are exactly the same, so the themes that we're seeing are health equity, specifically through hyper segmentation of populations in an acknowledgment that people are not all the same. It drives me nuts when people say 'seniors want...' I'm like, which senior? Seniors want a lot of different things because seniors are a lot of different people, so we have to build different product offerings. I would say the same thing about Medicaid beneficiaries. We need to get off the idea that Medicaid people want this and Medicare people want that.

Q: We're seeing a lot of movement around MA and Part D prior authorization regulations, both in Congress and from CMS. What policy changes really need to happen to improve the process for both payers and providers?

SJ: There's a set of things when we do MA prior authorization where we're just applying commercial models of PA to broader populations. If we're going to do PA in Medicare Advantage or in Medicaid, then it should be tied to specific things. We should have thresholds. If something gets approved 99 percent of the time, then we're just introducing administrative waste and it should be outlawed. If the value proposition is built around the 1 percent that we're going to deny, that's a big problem and something I think our industry has gotten wrong.

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