High-cost patients with complex healthcare needs are more likely to use traditional Medicare in lieu of Medicare Advantage, a recent study suggests.
The study, published in Health Affairs, found between 2010 and 2011 those complex patients were more likely to switch from Medicare Advantage to traditional Medicare, rather than switch in the other direction. The phenomenon was magnified among dual-eligibles, who are enrolled in both Medicare and Medicaid, according to the report.
Medicare Advantage plans use risk-adjusted capitated reimbursement, which is meant to help retain high-cost members. However, since these capitated payments are received prospectively, there is some concern that Medicare Advantage plans favor healthier beneficiaries to control costs, according to the report. Past studies suggest a law passed in 2003 attempted to correct this favorable risk selection with a new risk-adjustment system, but instead caused many high-cost members to switch plans.
Researchers set out to determine the rates at which patients who used three high-cost services — inpatient, postacute, and long-term nursing home and home health services — switched from one Medicare plan to another.
They found the switching rate from 2010 to 2011 from Medicare Advantage to a traditional plan was:
- 17 percent for members using long-term nursing home care
- 9 percent for short-term nursing home care
- 8 percent for home healthcare
Conversely, the switching rate from 2010 to 2011 from a traditional Medicare plan to a Medicare Advantage plan was:
- 3 percent for members using long-term nursing home care
- 4 percent for short-term nursing home care
- 3 percent for home healthcare
"Our results raise questions about whether current Medicare Advantage regulations and payment formulas are designed to meet the needs of Medicare Advantage members who use postacute and long-term care," the authors wrote.
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