Analysis Finds Beneficiaries Using High Cost Services Shift Out of Medicare Advantage Plans
Medicare pays private Medicare Advantage (MA) plans a fixed amount for each enrollee, which is adjusted based certain health and economic risk factors, to provide comprehensive coverage for that person each month. This adjustment and monthly, per-person payment was implemented to discourage MA plans from adopting discriminatory practices, such asencouraging only healthy people to enrolling or encouraging people who use high-cost services to disenroll.
A recent study published in Health Affairs evaluates the success of this payment structure. Researchers examined the rates at which participants who used certain high-cost services switched between Medicare Advantage and Original Medicare in 2010.
According to the findings, individuals who use high-cost services, like nursing home care and home health services, shifted out of Medicare Advantage into Original Medicare more frequently than they changed from Original Medicare into a Medicare Advantage plan. This imbalance was even greater among dually eligible beneficiaries who have both Medicare and Medicaid. In conclusion, the authors identify several potential reasons behind these trends, some related to payment and risk adjustment method and others related to beneficiary satisfaction with provider access in MA plans.