Provider Integrated Medicare Advantage Plans Are Associated With Differences In Patterns Of Inpatient Care

Medicare Advantage Health Risk Assessments Contribute Up To $12 Billion Per Year To Risk-Adjusted Payments

With Medicare Advantage (MA) enrollment surpassing 50 percent of Medicare beneficiaries, accurate risk-adjusted plan payment rates are essential. However, artificially exaggerated coding intensity, where plans seek to enhance measured health risk through the addition or inflation of diagnoses, may threaten payment rate integrity. One factor that may play a role in escalating coding intensity is health risk assessments (HRAs)-typically in-home reviews of enrollees' health status-that enable plans to capture information about their enrollees. In this study, we evaluated the impact of HRAs on Hierarchical Condition Categories (HCC) risk scores, variation in this impact across contracts, and the aggregate payment impact of HRAs, using 2019 MA encounter data. We found that 44.4 percent of MA beneficiaries had at least one HRA. Among those with at least one HRA, HCC scores increased by 12.8 percent, on average, as a result of HRAs. More than one in five enrollees had at least one additional HRA-captured diagnosis, which raised their HCC score. Potential scenarios restricting the risk-score impact of HRAs correspond with $4.5-$12.3 billion in reduced Medicare spending in 2020. Addressing increased coding intensity due to HRAs will improve the value of Medicare spending and ensure appropriate payment in the MA program.

Legislative and Regulatory Options for Improving Medicare Advantage

The Medicare Advantage program was created to expand beneficiary choice and to reduce spending through capitated payment to private insurers. However, many stakeholders now argue that Medicare Advantage is failing to deliver on its promise to reduce spending. Three problematic design features in Medicare Advantage payment policy have received particular scrutiny: (1) how baseline payments to insurers are determined, (2) how variation in patient risk affects insurer payment, and (3) how payments to insurers are adjusted for quality performance. The authors analyze the statute underlying these three design features and explore legislative and regulatory strategies for improving Medicare Advantage. They conclude that regulatory approaches for improving risk adjustment and for recouping overpayments from risk-score gaming have the highest potential impact and are the most feasible improvement measures to implement.

Trends in Cumulative Disenrollment in the Medicare Advantage Program, 2011-2020

Importance

The Medicare Advantage (MA) program is rapidly growing. While previous work has found that beneficiaries with substantial health needs disenroll from plans at higher rates, the long-term frequency of disenrollment is not well understood.

Objective

To compare cumulative disenrollment trends in the MA program by beneficiary and plan characteristics.

Design, Setting, and Participants

This retrospective, serial cross-sectional study included beneficiaries with any MA enrollment from January 1, 2011, to December 31, 2020. Data analysis took place from September 2022 to March 2023.

Exposures

Beneficiary characteristics, including race and ethnicity, length of Medicare enrollment, dual eligibility, and comorbidity burden, and contract characteristics, including vertical integration status, premium, and MA star rating.

Main Outcomes and Measures

The main outcome was disenrollment from an MA contract within 5 years. Rates of cumulative disenrollment by beneficiary and contract characteristics were compared. Pearson correlation coefficients were calculated to assess the correlation between a contract's 1-year disenrollment and the contract's disenrollment over a longer period.

Results

The sample included 82 377 917 beneficiaries (524 442 225 beneficiary-year observations; 56.7% female; mean [SD] age, 71.9 [10.3] years). After 1 year, 13.2% of nondually enrolled and 15.9% of dually enrolled beneficiaries had left their contract, increasing to 48.3% and 53.4%, respectively, after 5 years. Black enrollees disenrolled at the highest rates among race and ethnicity categories, with 14.8% disenrolling after 1 year and 52.6% disenrolling after 5 years. Contracts had a median disenrollment rate of 9.8% (IQR, 4.5%-19.0%) after 1 year and 56.1% (IQR, 23.1%-79.0%) after 5 years. Contracts rated 5 stars had substantially lower 5-year disenrollment rates (23.0% after 5 years compared with 41.2% for 4- to 4.5-star contracts and 67.2% for 3- to 3.5-star contracts). Disenrollment from a contract after 1 year was not well correlated with disenrollment after 5 years (r, 0.46).

Conclusions and Relevance

This cross-sectional study found substantial cumulative rates of disenrollment from MA plans within 5 years between 2011 and 2020, with wide variation in 5-year disenrollment by contract. The findings suggest that evaluating long-term disenrollment rates in MA performance measures may capture different outcomes than single-year disenrollment alone.

Differences between integrated and non-integrated plans in Medicare Advantage

OBJECTIVE

To understand differences in financial performance, quality performance, supplemental benefits provision, and enrollee composition between integrated and non-integrated plans in the Medicare Advantage (MA) program.

DATA SOURCES

We used data from the Center for Medicare and Medicaid Services for 2015-2017. We included 156 integrated MA plans (31 unique contracts) and 2096 non-integrated MA plans (392 unique contracts).

STUDY DESIGN

We estimated linear probably models for financial performance, quality performance, supplemental benefits provision, and enrollee composition with state fixed effects and contract random effects. We adjusted for county-level market structure-related factors, cost-related factors, and demand-related factors. Our primary independent variable was an indicator of plan-provider integration.

PRINCIPAL FINDINGS

Integrated MA plans were associated with $19.4 (95% CI: 9.2, 29.7) and $16.6 (95% CI: 10.3, 22.9) higher Part C and Part D monthly premiums, but were associated with higher star quality ratings. There were no significant differences in revenues and plan payments per enrollee between integrated and non-integrated MA plans. Integrated MA plans were associated with $40.5 (95% CI: -54.0, -26.9) lower non-claims costs than non-integrated MA plans. There was limited evidence that integrated MA plans provided more generous supplemental benefits than non-integrated MA plans. Enrollment rates in integrated MA plans were particularly low among socially marginalized groups (3.4 [95% CI: -5.9, -1.0], 4.7 [95% CI: -8.5, -0.9], and 4.4 [95% CI: -6.4, -2.4] percentage points lower among non-Hispanic Black, Medicare-Medicaid dual eligible, and the disabled).

CONCLUSIONS

Our findings suggest that integrated MA plans may achieve higher efficiency and quality, but these benefits may not be experienced by all beneficiaries due to disparities in enrollment. As these models continue to spread, it is critical to develop policies to ensure that MA enrollees have equal access to integrated plans.

Hospital-physician integration and risk-coding intensity

Hospital-physician integration has surged in recent years. Integration may allow hospitals to share resources and management practices with their integrated physicians that increase the reported diagnostic severity of their patients. Greater diagnostic severity will increase practices' payment under risk-based arrangements. We offer the first analysis of whether hospital-physician integration affects providers' coding of patient severity. Using a two-way fixed effects model, an event study, and a stacked difference-in-differences analysis of 5 million patient-year observations from 2010 to 2015, we find that the integration of a patient's primary care doctor is associated with a robust 2%-4% increase in coded severity, the risk-score equivalent of aging a physician's patients by 4-8 months. This effect was not driven by physicians treating different patients nor by physicians seeing patients more often. Our evidence is consistent with the hypothesis that hospitals share organizational resources with acquired physician practices to increase the measured clinical severity of patients. Increases in the intensity of coding will improve vertically-integrated practices' performance in alternative payment models and pay-for-performance programs while raising overall health care spending.

Racial Disparities in Avoidable Hospitalizations in Traditional Medicare and Medicare Advantage

IMPORTANCE

Compared with traditional Medicare (TM), Medicare Advantage (MA) has the potential to reduce racial disparities in hospitalizations for ambulatory care sensitive conditions (ACSC). As racial disparities may be partly attributable to unequal treatment based on where people live, this suggests the need of examining geographic variations in racial disparities.

OBJECTIVE

The aim of this study was to examine differences in ACSC hospitalizations between White and Black beneficiaries in TM and MA and examine geographic variations in racial differences in ACSC hospitalizations in TM and MA.

METHODS

We analyzed the 2015-2016 Medicare Provider Analysis and Review files. We used propensity score matching to account for differences in characteristics between TM and MA beneficiaries. Then, we conducted linear regression and estimated adjusted outcomes for TM and MA beneficiaries by race. Also, we estimated racial differences in adjusted outcomes by insurance and hospital referral region (HRR).

RESULTS

While White beneficiaries in TM and MA had similar rates of ACSC hospitalizations (163.7 vs. 162.2/10,000 beneficiaries), Black beneficiaries in MA had higher rates of ACSC hospitalizations than Black beneficiaries in TM (221.2 vs. 209.3/10,000 beneficiaries). However, the racial differences were greater in MA than TM (59.0 vs. 45.6/10,000 beneficiaries). Racial differences in ACSC hospitalizations in MA were prevalent across almost all HRRs. 95.5% of HRRs had higher rates of ACSC hospitalizations among Black beneficiaries than White beneficiaries in MA relative to just 54.2% of HRRs in TM.

CONCLUSION

Our findings provide evidence of racial disparities in access to high-quality primary care, especially in MA.