Clover Health aims to boost physician adoption of its software by paying Medicare Advantage enrollees to visit providers that have agreed to adopt its Clover Assistant tool next year.

The insurtech will give its Medicare Advantage members $150 when they schedule in-person, virtual or home visits with providers that use Clover Assistant. The company, which has 88,000 Medicare Advantage customers, describes Clover Assistant as an electronic medical record combined with an artificial intelligence tool that prompts physicians for diagnoses, code entries and care protocols.

The company announced the program last month when it unveiled its Medicare Advantage offerings for 2023. Clover Health already pays providers $200 for each visit during which they use Clover Assistant to catalog patient conditions. 

“Arming physicians with technology to simply help them make better decisions without forcing them to do anything they don’t want to do is crucial. Clover Assistant was born from that insight,” Clover Health President Andrew Toy said during the company’s third-quarter earnings call Monday.

Toy will be become CEO Jan. 1. Clover Health declined to comment for this article. 

Clover Health built its business around Clover Assistant. 

The insurtech attracts Medicare Advantage members with a wide network and generous benefits and touts its Clover Assistant technology as able to manage their care and reduce costs. The company contends its user-friendly software appeals to physicians. “We believe our Clover Assistant-enabled model gives us a structural advantage over other industry participants, allowing for profitable, above-market growth,” Toy said. 

Clover Health’s net loss grew 118% to $75.3 million during the third quarter on revenues of $856.8 million. 

Not every provider contracted with Clover Health uses its software. The company stopped disclosing how many clinicians participate earlier this year because it said members shifting between Medicare Advantage and its Direct Contracting entity made the numbers incomparable between quarters. The Centers for Medicare and Medicaid Services has redesigned the Direct Contracting payment model into the Accountable Care Organization REACH program for 2023. 

Providers’ adoption and use of Clover Assistant has been the subject of ongoing speculation. 

Ahead of Clover Health’s special purpose acquisition deal in January 2021, Gary Taylor, managing director and senior equity research analyst at Cowen, called a “handful” of providers in the Clover Health network, none of whom told him they used Clover Assistant, he said. Taylor cited accounts from doctors who reported it wasn’t worth the effort to use a new tool for the small number of Clover Health policyholders they treat. Some physicians will enter their patients’ information into the system following the visit solely to earn pay bonuses, Taylor said.

“If a patient is going to a physician that has that viewpoint, then you’re not going to get benefit out of the model,” Taylor said. “So now you have to take this additional expense to try to direct patients to physicians who are actually using the software. It’s all kind of this circular, failed thesis.” 

A Hindenburg Research report published last year contained similar findings. Dozens of physicians told the investment research firm that Clover Assistant is difficult to use.

The same report revealed that the Justice Department was investigating Clover Health for allegedly overbilling Medicare. Hindenburg Research also quoted doctors saying Clover Assistant is a tool for gaming Medicare Advantage risk adjustment, which pays carriers more if they manage care for sicker patients. Several Medicare Advantage insurers are accused of exaggerating members’ illnesses to generate additional revenue. 

Clover Health has said the Justice Department’s investigation is routine for the industry and that it disagrees with the Hindenburg Research report. 

Health insurance companies have long pushed providers to adopt their preferred software systems. But Clover Health paying patients to visit providers that use its technology “just seems creepy to me,” said Aaron Miri, co-chair of the federal Health Information Technology Advisory Committee, an expert panel that advises the federal government on health IT policy. The insurtech likely has to pay patients to choose providers who use its software to avoid violating patient steering laws, he said. 

“If there was money to be made, UnitedHealth, Blue Cross, all of them, would be doing the same thing. This seems like something that is too good to be true. I would be very, very cautious,” said Miri, who also is senior vice president and chief digital officer of Baptist Health South Florida in Jacksonville. “That sounds like an unsustainable funding mechanism.” 

The only way paying patients to visit specific providers might make economic sense is through the Medicare Shared Savings Program, a payment model that rewards physicians for meeting quality and care metrics, Miri said.

Clover Health does not currently participate in Medicare Shared Savings Program, but will ramp up its ACO participation in 2023, executives said Monday. The company plans to decrease its participation next year in Direct Contracting, which is now the ACO REACH, and shift physician partners to the Shared Savings Program. 

There are technical differences between the two models, but a key differentiator is how providers are rewarded. Under ACO REACH, participants can be penalized during their first year for exceeding the costs of caring for an individual patient, meaning they must accept downside risk. With the Medicare Shared Savings Program, qualifying physicians can only accept upside risk for up to seven years, meaning they can only make money during that time. 

“We have a lot of [ACO REACH] applicants and they could move into an upside-only program like the Medicare Shared Savings Program, move through the various stages of Medicare Shared Savings Program and then, when appropriate, graduate into something like the ACO REACH program,” Clover Health CEO Vivek Garipalli said during the third-quarter earnings call. 

“We think that’s closer to what CMS envisions anyway,” Garipalli said. “We can provide a very strong advantage in terms of selecting the right program for a doctor.” 

Clover Health could collect referral bonuses for sending patients to providers’ Medicare Shared Savings Programs, Miri said. Health systems could also contract with Clover Health to help run the payment model for the referred patients and give them a share of the Medicare pay bonuses, he said.

“If they’re steering you into a specific ACO within a health system and they cut that deal with the health system, the health system, then, is giving them a cut of that percentage because you increase their covered lives,” Miri said. “That’s where they must be making money on that.” 

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