Medicare Advantage beneficiaries see better health outcomes

Photo: Marko Geber/Getty Images

People with Medicare Advantage tend to have stronger health outcomes than those with fee-for-service Medicare, seeing fewer hospitalizations and readmissions, according to research published by Inovalon.

Using its unique data assets and analytics to look at a broad range of quality measures across care settings, the research shows that patients enrolling in MA realize substantially reduced rates of chronic and acute care complications.

To quantify the impact of MA vs. FFS on key quality outcomes, the research team analyzed quality measures for a large, nationally representative population over a two-year time span as beneficiaries transitioned from commercial insurance to MA or FFS coverage, while accounting for pre-existing differences prior to Medicare enrollment.

The results: Medicare Advantage has 70% fewer readmissions than fee-for-service Medicare. It also has 24% fewer preventable hospitalizations than FFS, primarily driven by 59% fewer preventable acute hospitalizations.

MA has 21% lower rates of high-risk medication use, while overall medication use is in line with FFS, the data showed.

WHAT'S THE IMPACT?

MA now covers more than half of Medicare beneficiaries, including a disproportionately large share of socioeconomically disadvantaged patient populations.

According to an analysis from KFF, enrollment in Medicare Advantage has increased dramatically in recent years. In 2007, less than one in five (19%) eligible Medicare beneficiaries were enrolled in a private plan. The growth in enrollment is due to a number of factors, said KFF, including the attraction of extra benefits offered by most plans, such as vision, hearing and dental services, and the potential for lower out-of-pocket spending, particularly compared to traditional Medicare with the need for supplemental coverage.

Another driver of MA growth has been people switching from traditional Medicare, especially younger and healthier patients, according to a September Health Affairs study. Switching from fee-for-service Medicare to MA more than tripled between 2006 and 2022, whereas switching from MA to fee-for-service Medicare decreased, a trend that started to gain steam around 2019.

Between 2006 and 2009 the switching rates from fee-for-service Medicare to MA and from MA to fee-for-service Medicare were similar. But the trends diverged after that, with a general decline in switching from MA to fee-for-service Medicare since 2010, and a general increase in switching from fee-for-service Medicare to MA. By 2022 the switching rate from fee-for-service Medicare to MA outpaced the switching rate from MA to fee-for-service Medicare by more than six times.

Authors said this is likely attributable to legislative provisions in the Affordable Care Act that attempted to bring down the higher MA payments to comparable fee-for-service-based MA payment rates, and the fact that MA payment remained higher than fee-for-service payment, despite the narrowing of the payment differential.

THE LARGER TREND

MA plans have recently come under fire for claim denials, and Democratic lawmakers in the U.S. House of Representatives are concerned about the use of artificial intelligence in those denials. Democrats recently penned a letter to the Centers for Medicare and Medicaid Services, asking the federal agency to analyze AI use in Medicare Advantage plans with an eye toward reducing claims denial rates.

Last month, the Centers for Medicare and Medicaid Services released the Medicare Advantage, Part C and Medicare Part D Star Ratings that rank MA plans by the quality of health and drug services received by consumers. Thirty-one contracts for both Medicare Advantage and the Part D drug plan earned 5 stars, compared to 57 in 2023. Four contracts received the low overall ranking of 2 stars, the same number as in 2023.

The Star Ratings for Medicare Advantage and Medicare Part D prescription drug plans are released annually and reflect the experiences of people enrolled in Medicare Advantage and Part D prescription drug plans. Plans are rated on a one-to-five scale, with one star representing poor performance and five stars representing the highest level of performance.

Federal spending on bonus payments to insurance companies that offer Medicare Advantage plans will reach at least $12.8 billion in 2023, according to a new KFF analysis. That's a nearly 30% increase from 2022, and more than quadruple the spending in 2015.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com