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Medicare Advantage startup Clover Health has doubled lives managed with the introduction of a new Medicare direct contract model and has brought in two home care providers to help her succeed with the program.
The Nashville-based insurance company plans to pool some high-risk patients through its direct contracting program with Spiras Health and Upward Health, which will provide primary care at home. Clover is one of over 50 companies participating in the 2021 Global and Professional Medicare Direct Contract Model. Other companies include insurers such as Humana and providers such as Oak Street Health and VillageMD.
“We want to remain flexible to benefit our members, whether or not we have our own staff there,” said Dr. Kumar Dharmarajan, Clover’s deputy chief medical officer and chief clinician for the direct contracting company.
Clover said it has about 66,300 Medicare Advantage members and about 65,000 patients it calls “Agreed Beneficiaries” under Medicare Direct Contracts, bringing the total number of lives under its management to more than 130,000.
Company higher growth projects in the direct contracting program this year, the number of aid recipients is expected to increase by 8% to 54% by the end of 2021. By contrast, Clover expects Medicare Advantage membership to grow by just under 3% to 5.5%.
If that doesn’t work, Clover, which went public through a specialized acquisition company, could find itself even deeper in the hole. The company reported a net loss of $ 48.4 million on revenues of $ 200.3 million. quarter ended March 31, which is 71% more than in the previous period. This is due in part to the fact that its insurance claim costs more than doubled compared to premium income over that period: 47% versus 22%, respectively.
Clover’s CFO attributed the loss to the updated SEC accounting guidance. Clover’s share price plummeted after a short-selling group fired the company in February due to a Justice Department investigation. Last week, stock traders raised the price of his shares.
The new Medicare direct contract model is designed to add cost-based services to traditional Medicare that has historically paid for. Clover members have historically been eligible for Medicare Advantage, so its direct contract program will consist of entirely new members. The insurer will bear the full cost of the care for these members as well as for Medicare Advantage members.
Dharmarajan said he believes Clover will succeed in direct contracts because its patented technology uses claim data and other information to determine which of its participants in the program will benefit from primary health care in the home, a program that he has. offered for many years… According to him, the result is from 5% to 10% of members.
“This is really important,” Dharmarajan said.
From there, Clover informs these members’ health care providers, who in turn refer them to a primary home care program. This assistance will not be provided exclusively by Spiras and Upward. Later this year, Clover’s employed doctors will provide primary health care at home, Dharmarajan said.
Commercial primary care provider One Medical also hopes to benefit from direct Medicare contracts through its waiting to buy Iora Health, a primary care provider specializing primarily in Medicare. Iora currently has about 2 million Medicare Pay-for-Service members, or about 40% of its members. Combined with One Medical, this could expand to 11 million members or a potential revenue opportunity of $ 140 billion, the companies split slide presentation announcing their pending transaction.
The Biden administration recently spilled cold water on Medicare direct contracts when it suspended new apps for 2022, which will disrupt the plans of many providers for the next year. Dharmarajan said that this will not affect Clover, which intends to continue with the program until 2022.
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