High-Cost Patients Had Substantial Rates Of Leaving Medicare Advantage And Joining Traditional Medicare

Abstract

Medicare Advantage payment regulations include risk-adjusted capitated reimbursement, which was implemented to discourage favorable risk selection and encourage the retention of members who incur high costs. However, the extent to which risk-adjusted capitation has succeeded is not clear, especially for members using high-cost services not previously considered in assessments of risk selection. We examined the rates at which participants who used three high-cost services switched between Medicare Advantage and traditional Medicare. We found that the switching rate from 2010 to 2011 away from Medicare Advantage and to traditional Medicare exceeded the switching rate in the opposite direction for participants who used long-term nursing home care (17 percent versus 3 percent), short-term nursing home care (9 percent versus 4 percent), and home health care (8 percent versus 3 percent). These results were magnified among people who were enrolled in both Medicare and Medicaid. Our findings raise questions about the role of Medicare Advantage plans in serving high-cost patients with complex care needs, who account for a disproportionately high amount of total health care spending.

Association of Cost Sharing With Use of Home Health Services Among Medicare Advantage Enrollees

“…Our findings extend previous work demonstrating 15 that the persons with intensive care needs, including those with prior hospitalizations and long-term and short nursing home stays, are more likely to exit MA plans, compared with those who do not use these services. Further study of the reasons for disenrollment is urgently needed, because the benefits of managed care may be attenuated if patients exit their plans once they have complex medical needs.…”

Favorable Risk Selection in Medicare Advantage: Trends in Mortality and Plan Exits Among Nursing Home Beneficiaries

“…Others studies have found that there was no reduction in risk selection (Brown, Duggan, Kuziemko, & Woolston, 2014; Morrisey, Kilgore, Becker, Smith, & Delzell, 2013). Importantly, there are some data that switching from MA plans became concentrated among high-cost beneficiaries (Morrisey et al, 2013; Rahman et al, 2015)…”

Medicare Advantage Enrollees More Likely To Enter Lower-Quality Nursing Homes Compared To Fee-For-Service Enrollees

“…This raises the question of how the quality of SNF care received by MA beneficiaries may differ from that received by FFS patients. 17 It is possible to study these issues using the mandatory patient assessments that each SNF submits to CMS on all entering beneficiaries, including MA patients.…”