The persistence of medicare advantage spillovers in the post-Affordable Care Act era

Primary Care Physicians In Medicare Advantage Were Less Costly, Provided Similar Quality Versus Regional Average

The use of many services is lower in Medicare Advantage (MA) compared with traditional Medicare, generating cost savings for insurers, whereas the quality of ambulatory services is higher. This study examined the role of selective contracting with providers in achieving these outcomes, focusing on primary care physicians. Assessing primary care physician costliness based on the gap between observed and predicted costs for their traditional Medicare patients, we found that the average primary care physician in MA networks was $433 less costly per patient (2.9 percent of baseline) compared with the regional mean, with less costly primary care physicians included in more networks than more costly ones. Favorable selection of patients by MA primary care physicians contributed partially to this result. The quality measures of MA primary care physicians were similar to the regional mean. In contrast, primary care physicians excluded from all MA networks were $1,617 (13.8 percent) costlier than the regional mean, with lower quality. Primary care physicians in narrow networks were $212 (1.4 percent) less costly than those in wide networks, but their quality was slightly lower. These findings highlight the potential role of selective contracting in reducing costs in the MA program.

Is there an advantage? Considerations for researchers studying the effects of the type of Medicare coverage

OBJECTIVE

To describe common methodological problems that arise in comparisons of Medicare Advantage (MA) and Traditional Medicare (TM) and within-MA studies and provide suggestions of how researchers can address these issues.

STUDY SETTING

Published research evaluating Medicare coverage options in the United States.

STUDY DESIGN

We considered key conceptual challenges and promising solutions that have been used thus far and suggest additional directions.

DATA COLLECTION

Not available.

PRINCIPAL FINDINGS

Many existing studies of MA versus TM include significant limitations, such as failing to account for unobserved confounders driving both beneficiary coverage choice and health outcomes once enrolled, not accounting for variation in benefit generosity, provider networks, or plan design across MA plans, and/or having been conducted at a time when MA enrollment was less than a third of all Medicare beneficiaries. We provide a review of methods that can help researchers to overcome these weaknesses and suggest additional methods and data sources that may aid future research.

CONCLUSIONS

The MA program is becoming an essential part of the US healthcare system. By accounting for non-random movement into and out of MA and studying the heterogeneity of beneficiary experience across plan and market characteristics, researchers can provide the high-quality evidence necessary for policymakers to design the program and reform TM in ways that maximize beneficiary outcomes.

Association Between the Medicare Advantage Quartile Adjustment System and Plan Behavior and Enrollment

Importance

Medicare Advantage (MA) has grown in popularity, but critics believe that insurers are overpaid, partially due to the quartile adjustment system that determines plan benchmarks. However, elimination of the quartile adjustments may be associated with less generous benefits and fewer plan offerings, which could slow MA enrollment growth.

Objective

To examine whether the quartile adjustment system is associated with differences in county-level benefits, insurer offerings, and MA enrollment.

Design, Setting, and Participants

The quartile adjustments create discontinuous jumps in county-level base payments based on historical traditional Medicare spending. Data from January 2017 to December 2021 and a regression discontinuity design were used to examine changes in insurer behavior and MA enrollment between quartiles. The analytic sample included 1557 county observations.

Main Outcomes and Measures

Study outcomes included monthly premiums, the share of plans charging premiums, primary care copayments, the share of plans using rebates to reduce Part B premiums, supplemental benefits, plan and contract availability, and MA enrollment.

Results

Discontinuities were found in the quartile adjustments and benchmarks. A 1-percentage point (pp) increase in the quartile adjustment was associated with a $6.36 increase in monthly benchmarks (95% CI, 5.10-7.62), a $0.51 decrease in monthly premiums (95% CI, -0.96 to -0.07), and a 0.68 pp decrease in the share of plans charging premiums (95% CI, -1.25 to -0.10). Significant changes were not found in primary care copayments (-$0.04; 95% CI, -0.17 to 0.09), the share of plans using rebates to reduce Part B premiums (-0.17 pp; 95% CI, -0.34 to 0.01), supplemental benefits (eg, preventive dental coverage; 0.17 pp; 95% CI, -0.25 to 0.0), the number of plans (1.06; 95% CI, -3.44 to 5.57) or contracts (0.31; 95% CI, -0.18 to 0.81), or the MA enrollment rate (0.16 pp; 95% CI, -0.61 to 0.94).

Conclusions and Relevance

The study results suggest that MA plans are not very sensitive to modest changes in payment rates. Modifications to the quartile adjustment system may generate savings without substantially affecting MA beneficiaries.

No Improvement In Mental Health Treatment Or Patient-Reported Outcomes At Medicare ACOs For Depression And Anxiety Disorders

Accountable care organizations (ACOs) have become Medicare's dominant care model because policy makers believe that ACOs will improve the quality and efficiency of care for chronic conditions. Depression and anxiety disorders are the most prevalent and undertreated chronic mental health conditions in Medicare. Yet it is unknown whether ACOs influence treatment and outcomes for these conditions. To explore these questions, this longitudinal study used data from the 2016-19 Medicare Current Beneficiary Survey, linked to validated depression and anxiety symptom instruments, among diagnosed and undiagnosed fee-for-service Medicare patients with these conditions. Among patients not enrolled in ACOs at baseline, those who newly enrolled in ACOs in the following year were 24 percent less likely to have their depression or anxiety treated during the year than patients who remained unenrolled in ACOs, and they saw no relative improvements at twelve months in their depression and anxiety symptoms. Better-designed incentives are needed to motivate Medicare ACOs to improve mental health treatment.

Effects of Medicare Advantage on preventive care use and health behavior

OBJECTIVE

To examine the effects of Medicare Advantage (MA) enrollment on preventive care use and health behavior.

DATA SOURCES

The Medicare Current Beneficiary Survey, the Area Health Resources File, the Geographic Variation Public Use File, and the Centers for Medicare and Medicaid Services annual risk and ratebook files for 2012-2016.

STUDY DESIGN

Outcomes included 11 measures of preventive care use and six measures of health behavior. My primary independent variable was MA enrollment. For each outcome, I first conducted linear regression analysis while adjusting for individual-level and county-level characteristics. Then, I conducted the following alternative analyses to account for differences in observed and/or unobserved characteristics between MA and traditional Medicare (TM) enrollees: propensity score (PS) matching analysis and instrumental variable (IV) analysis.

DATA COLLECTION/EXTRACTION METHODS

I extracted 9399 MA enrollees and 15,543 TM enrollees.

FINDINGS

Linear regression and PS matching analyses showed that MA enrollment was statistically significantly associated with higher likelihood of having blood pressure measurement, cholesterol measurement, and influenza vaccine, lower likelihood of receiving an HbA1C test, and higher likelihood of currently smoking. However, the magnitude of the associations was small. There were no statistically significant associations in other measures. IV analyses also found no or limited evidence that MA enrollment led to statistically significant changes in preventive care use and health behavior. Specifically, MA enrollment led to statistically significant improvements in the likelihood of doing any physical activities (1.29 [95% CI: 0.51-2.07]) or doing muscle-strengthening activities (0.72 [95% CI: 0.03-1.41]). No statistically significant changes were observed in other measures.

CONCLUSIONS

MA plans may not necessarily increase the use of preventive services and improve health behaviors. As improvements in preventive services and health behavior may have the potential to achieve better outcomes while lowering costs, policy makers should consider developing targeted interventions for MA to achieve those improvements.

Increased Medicare Advantage Penetration Is Associated With Lower Postacute Care Use For Traditional Medicare Patients

Medicare Advantage (MA) plans, which accounted for 45 percent of total Medicare enrollment in 2022, are incentivized to minimize spending on low-value services. Prior research indicates that MA plan enrollment is associated with reduced postacute care use without adverse impacts on patient outcomes. However, it is unclear whether a rising MA enrollment level is associated with a change in postacute care use in traditional Medicare, especially given growing participation in traditional Medicare Alternative Payment Models that have been found to be associated with lower postacute care spending. We hypothesize that market-level MA expansion is associated with reduced postacute care use among traditional Medicare beneficiaries-a "spillover" effect of providers modifying their practice patterns in response to MA plans' incentives. We found increased MA market penetration associated with reduced postacute care use among traditional Medicare beneficiaries, without a corresponding increase in hospital readmissions. This association was generally stronger in markets with a greater share of traditional Medicare beneficiaries attributed to accountable care organizations, suggesting that policy makers should account for MA penetration when evaluating potential savings in Alternative Payment Models within traditional Medicare.

Comparison of the Pathway to Hospice Enrollment Between Medicare Advantage and Traditional Medicare

Importance

Older adults in Medicare Advantage (MA) enroll in hospice at higher rates than those in traditional Medicare (TM), but it is unclear whether the pathway of care prior to hospice use differs between MA and TM.

Objective

To examine the site of care prior to hospice enrollment for MA beneficiaries compared with those in TM.

Design, Setting, and Participants

This population-based, retrospective cross-sectional study used Medicare claims data for decedents in calendar years 2011, 2013, 2016, and 2018 who enrolled in hospice in the last 90 days of life. Data were analyzed from February 11, 2022, to October 24, 2022.

Exposures

Enrollment in MA or TM in the last month of life.

Main Outcomes and Measures

The main outcome was the site of care prior to hospice enrollment, defined as hospital, nursing home, and home with or without home health, dichotomized as community vs hospital in a logistic regression model. Covariates included decedent demographics, hospice primary diagnosis, and county-level MA penetration. Differences in hospice length of stay between MA beneficiaries and TM beneficiaries were assessed using linear and logistic regression models.

Results

In this study of 3 164 959 decedents, mean (SD) age was 83.1 (8.6) years, 55.8% were female, and 28.8% were enrolled in MA. Decedents in MA were more likely to enroll in hospice from a community setting than were those in TM, although the gap narrowed over time from an unadjusted 11.1% higher rate of community enrollment in MA vs TM in 2011 (50.1% vs 39.0%) to 8.1% in 2018 (46.4% vs 38.3%). In the primary adjusted analysis over the entire study period, MA enrollment was associated with an 8.09-percentage point (95% CI, 7.96-8.21 percentage points) higher rate of hospice enrollment from the community vs all other sites. This association remained in multiple sensitivity analyses to account for potential differences in the populations enrolled in MA vs TM. The mean overall hospice length of stay was 0.29 days (95% CI, 0.24-0.34 days) longer for MA decedents compared with TM decedents.

Conclusions and Relevance

Compared with TM beneficiaries, those in MA were more likely to enroll in hospice from community settings vs following inpatient stays. However, hospice length of stay was not substantially different between MA and TM. Further research is needed to understand how MA plans influence hospice use and the direct association with quality of end-of-life care as reported by older adults and their families.

Effect of Medicare Advantage on health care use and care dissatisfaction in mental illness

OBJECTIVE

To examine the effects of Medicare Advantage (MA) enrollment on health care use and dissatisfaction with care received among Medicare beneficiaries with mental illness.

DATA SOURCES

I identified traditional Medicare (TM) and MA beneficiaries with mental illness using the Medicare Current Beneficiary Survey for 2012-2016.

STUDY DESIGN

I included two types of outcomes: four measures of health care use and 10 measures of care dissatisfaction. My primary independent variable was enrollment in TM versus MA. To address selective enrollment into MA, I used an instrumental variable (IV) approach. Following prior research, I decomposed the MA benchmark into exogenous and endogenous components and then used the exogenous component as my instrument.

DATA COLLECTION/EXTRACTION METHODS

Not Applicable.

PRINCIPAL FINDINGS

IV analyses showed that compared with TM enrollment, MA enrollment significantly decreased outpatient hospital visits and medical provider visits by 6.73 (95% CI: -12.10 to -1.36) and 36.48 (95% CI: -52.67 to -20.28). However, there were no significant changes in inpatient hospital admissions and prescription drug purchases. Compared with TM enrollment, MA enrollment significantly increased dissatisfaction with out-of-pocket expenses by 25.51 percentage points (95% CI: 0.43 to 50.60). However, there were no significant changes in other measures of care dissatisfaction in terms of access to care, quality of care, and prescription medication.

CONCLUSIONS

These findings suggest that MA enrollment may lead to low health care use among those with mental illness, indicating efficient care delivery. Also, MA enrollment may not preclude those with mental illness from accessing needed care. However, high dissatisfaction with out-of-pocket expenses among MA beneficiaries may imply the use of out-of-network providers. Further research is warranted to investigate whether high dissatisfaction with out-of-pocket expenses may be attributable to MA's narrow networks for mental services.

Association of Race and Ethnicity and Medicare Program Type With Ambulatory Care Access and Quality Measures

IMPORTANCE

There are racial inequities in health care access and quality in the United States. It is unknown whether such differences for racial and ethnic minority beneficiaries differ between Medicare Advantage and traditional Medicare or whether access and quality are better for minority beneficiaries in 1 of the 2 programs.

OBJECTIVE

To compare differences in rates of enrollment, ambulatory care access, and ambulatory care quality by race and ethnicity in Medicare Advantage vs traditional Medicare.

DESIGN, SETTING, AND PARTICIPANTS

Exploratory observational cohort study of a nationally representative sample of 45 833 person-years (26 887 persons) in the Medicare Current Beneficiary Survey from 2015 to 2018, comparing differences in program enrollment and measures of access and quality by race and ethnicity.

EXPOSURES

Minority race and ethnicity (Black, Hispanic, Native American, or Asian/Pacific Islander) vs White or multiracial; Medicare Advantage vs traditional Medicare enrollment.

MAIN OUTCOMES AND MEASURES

Six patient-reported measures of ambulatory care access (whether a beneficiary had a usual source of care in the past year, had a primary care clinician usual source of care, or had a specialist visit) and quality (influenza vaccination, pneumonia vaccination, and colon cancer screening).

RESULTS

The final sample included 6023 persons (mean age, 68.9 [SD, 12.6] years; 57.3% women) from minority groups and 20 864 persons (mean age, 71.9 [SD, 10.8] years; 54.9% women) from White or multiracial groups, who accounted for 9816 and 36 017 person-years, respectively. Comparing Medicare Advantage vs traditional Medicare among minority beneficiaries, those in Medicare Advantage had significantly better rates of access to a primary care clinician usual source of care (79.1% vs 72.5%; adjusted marginal difference, 4.0%; 95% CI, 1.0%-6.9%), influenza vaccinations (67.3% vs 63.0%; adjusted marginal difference, 5.2%; 95% CI, 1.9%-8.5%), pneumonia vaccinations (70.7% vs 64.6%; adjusted marginal difference, 6.1%; 95% CI, 2.7%-9.4%), and colon cancer screenings (69.4% vs 61.1%; adjusted marginal difference, 7.1%; 95% CI, 3.8%-10.3%). Comparing minority vs White or multiracial beneficiaries across both programs, minority beneficiaries had significantly lower rates of access to a primary care clinician usual source of care (adjusted marginal difference, 4.7%; 95% CI, 2.5%-6.8%), specialist visits (adjusted marginal difference, 10.8%; 95% CI, 8.3%-13.3%), influenza vaccinations (adjusted marginal difference, 4.3%; 95% CI, 1.2%-7.4%), and pneumonia vaccinations (adjusted marginal difference, 6.4%; 95% CI, 3.9%-9.0%). The interaction of race and ethnicity with insurance type was not statistically significant for any of the 6 outcome measures.

CONCLUSIONS AND RELEVANCE

In this exploratory study of Medicare beneficiaries in 2015-2018, enrollment in Medicare Advantage vs traditional Medicare was significantly associated with better outcomes for access and quality among minority beneficiaries; however, minority beneficiaries were significantly more likely to experience worse outcomes for most access and quality measures than White or multiracial beneficiaries in both programs.

Measuring the Scope of Prior Authorization Policies

Question

How common and expensive are medical services that can require prior authorization?

Findings

This cross-sectional study examined medical services paid for by government-administered Medicare Part B, which lacks prior authorization requirements, for approximately 6.5 million beneficiaries; 2.2 services per beneficiary per year would have been subject to prior authorization under the coverage rules of a large Medicare Advantage insurer, and these services accounted for 25% of annual Part B spending.

Meaning

In Medicare, the scope of prior authorization policies differs considerably between government-administered insurance and privately administered insurance.

Importance

Health insurers use prior authorization to evaluate the medical necessity of planned medical services. Data challenges have precluded measuring the frequency with which medical services can require prior authorization, the spending on these services, the types of services and clinician specialties affected, and differences in the scope of prior authorization policies between government-administered and privately administered insurance.

Objectives

To measure the extent of prior authorization requirements for medical services and to describe the services and clinician specialties affected by them using novel data on private insurer coverage policies.

Design, Setting, and Participants

Fee-for-service Medicare claims from 2017 were analyzed for beneficiaries in Medicare Part B, which lacks prior authorization. We measured the use of services that would have been subject to prior authorization according to the coverage rules of a large Medicare Advantage insurer and calculated the associated spending. We report the rates of these services for 14 clinical categories and 27 clinician specialties.

Main Outcomes and Measures

Annual count per beneficiary and associated spending for 1151 services requiring prior authorization by the Medicare Advantage insurer; likelihood of providing 1 or more such service per year, by clinician specialty.

Results

Of 6 497 534 beneficiaries (mean [SD] age, 72.1 [12.1] years), 41% received at least 1 service per year that would have been subject to prior authorization under Medicare Advantage prior authorization requirements. The mean (SD) number of services per beneficiary per year was 2.2 (8.9) (95% CI, 2.17-2.18), corresponding to a mean (SD) of $1661 ($8900) in spending per beneficiary per year (95% CI, $1654-$1668), or 25% of total annual Part B spending. Part B drugs constituted 58% of the associated spending, mostly accounted for by hematology or oncology drugs. Radiology was the largest source of nondrug spending (16%), followed by musculoskeletal services (9%). Physician specialties varied widely in rates of services that required prior authorization, with highest rates among radiation oncologists (97%), cardiologists (93%), and radiologists (91%) and lowest rates among pathologists (2%) and psychiatrists (4%).

Conclusions and Relevance

In this cross-sectional study, a large portion of fee-for-service Medicare Part B spending would have been subject to prior authorization under private insurance coverage policies. Prior authorization requirements for Part B drugs have been an important source of difference in coverage policy between government-administered and privately administered Medicare.