Clover Health aims to drive physician adoption of its software by paying Medicare Advantage enrollees to visit providers who 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 who 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 doctors 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 they use Clover Assistant to catalog patient conditions.

“Arming doctors 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 out of that idea,” Clover Health President Andrew Toy said during the company’s third-quarter earnings call on Monday.

The toy will be become CEO on January 1. Clover Health declined to comment for this article.

Clover Health has built its business around Clover Assistant.

The insurtech lures Medicare Advantage members with a large network and generous benefits and touts its Clover Assistant technology as able to manage their care and lower costs. The company claims that its user-friendly software appeals to physicians. “We believe our Clover Assistant-enabled model gives us a structural advantage over other industry players, enabling profitable and above-market growth,” Toy said.

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

Not all vendors under contract with Clover Health use its software. The company stopped disclosing the number of participating clinicians earlier this year because it said members moving from Medicare Advantage to its direct-pay entity made the numbers unmatched from quarter to quarter. The Centers for Medicare and Medicaid Services have redesigned the payment model for direct contracts in the Accountable Care Organization’s REACH program for 2023.

The adoption and use of Clover Assistant by vendors has been the subject of continued speculation.

Prior to 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 Clover Health network vendors, none of whom didn’t tell him they were using Clover Assistant, he said. . Taylor cited testimonials from doctors who said it wasn’t worth using a new tool for the small number of Clover Health policyholders they treat. Some doctors will enter their patients’ information into the system after the visit just to earn salary bonuses, Taylor says.

“If a patient sees a doctor who has that view, you won’t get any benefit from the model,” Taylor said. “So now you have to take that extra expense to try to direct patients to doctors who are actually using the software. It’s a kind of circular, a failed thesis.

A Hindenburg Research report published last year had similar findings. Dozens of doctors have 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 overcharging Medicare. Hindenburg Research also quoted doctors as saying that Clover Assistant is a tool to play Medicare Advantage risk adjustment, which pays carriers more if they manage care for the sickest patients. Several Medicare Advantage insurers are accused of exaggerating member illnesses to generate additional revenue.

Clover Health said the Department of Justice investigation was routine for industry and that he 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 who use its technology “sounds just scary to me,” said Aaron Miri, co-chair of the Federal Advisory Committee on Health Information Technology, a group of experts who advise 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 direction laws, he said.

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

The only way to pay patients to visit specific providers could make economic sense through Medicare’s Shared Savings Program, a payment model that rewards doctors for meeting quality and care metrics, a Miri said.

Clover Health does not currently participate in the Medicare Shared Savings Program, but will increase its participation in the ACO in 2023, executives announced Monday. The company plans to reduce its participation next year in Direct Contractingwhich is now the ACO REACH, and moving partner physicians to the shared savings program.

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

“We have a lot of [ACO REACH] applicants and they could move up to a program on the upside like the Medicare Shared Savings Program, go through the different stages of the Medicare Shared Savings Program, and then, if appropriate, move up to something like the ACO REACH Program” , said Vivek Garipalli, CEO of Clover Health. when the third quarter results are called.

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

Clover Health could collect referral bonuses to send patients to providers’ Medicare shared savings programs, Miri said. Health systems could also contract with Clover Health to help manage the payment model for referred patients and give them a share of Medicare premiums, he said.

“If they refer you to a specific ACO within a health system and they cut that deal with the health system, the health system then gives them a reduction of that percentage because you increase their covered lives. “Miri said. “That’s where they have to make money on it.”