Value-based Medicare Advantage models see better outcomes, finds Optum
Patients in such models were 18% less likely to be admitted to the hospital and had a 9% lower 30-day readmission rate.
Photo: Marko Geber/Getty Images
Value-based Medicare Advantage models see better outcomes and better efficiency for patients, both in general and across specific metrics such as avoidable emergency department visits and readmissions, according to a new study commissioned by Optum and published in JAMA Network.
Patients in such models were 18% less likely to be admitted to the hospital and had a 9% lower 30-day readmission rate than those in Medicare fee-for-service models, numbers showed. They were also 11% less likely to visit the emergency room and 44% less likely to be readmitted for complications linked to chronic pulmonary disorder.
These improvements over fee-for-service Medicare are likely related to the care management infrastructure, which in turn is funded by the risk-adjusted payment for this specific population of patients, the study found. The infrastructure includes features such as enhanced use of telephone triage to ensure urgent outpatient appointments, primary care physician–directed disease management services; investments in electronic health record point-of-care technology for the deployment of care algorithms, patient-shared decision-making, hospitalist services and complex care coordination.
The results also showed that, compared to the their FFS counterparts, patients in value-based MA models saw 6% lower odds of inpatient acute admission through the ED, 6% lower rates or return to the ED within 30 days, 14% lower odds of avoidable ED visits, and 10% lower odds of admission for stroke or myocardial infarction.
WHAT'S THE IMPACT?
Medicare Advantage currently serves 44% of Medicare beneficiaries. Compared with fee-for-service Medicare, studies have suggested that Medicare Advantage is associated with improved outcomes, reductions in total cost of care and lower patient out-of-pocket expense.
A retrospective study looked at two populations of beneficiaries, one enrolled in Medicare Advantage and one in FFS Medicare, one year before and one year after they transitioned from commercial to Medicare enrollment in the 2020-2021 calendar years. The effect of coding intensity in the MA population – which has been the subject of a Risk Adjustment Data Validation final rule – was eliminated by using the diagnosis codes available for both cohorts while they were enrolled in commercial health plans.
In the first year of Medicare Advantage enrollment, there was a $95 per member per month reduction in the Part A spending related to a decrease in inpatient days of 212 days per 1,000 members per year. There was a reduction in total spending of $142 per member per month, which was 36% of total spending in Medicare.
The patient impact of this spending reduction is important, authors said. The literature suggests that most surplus funds get passed through to patients in the form of lower out-of-pocket costs, improved supplemental benefits and lower premiums. For example, a 2017 comparative analysis of out-of-pocket costs showed a $51 per member per month lower cost for Medicare Advantage compared with FFS Medicare, resulting in a yearly reduction in beneficiary out-of-pocket costs of more than $600.
THE LARGER TREND
Insurers expect that the Centers for Medicare and Medicaid Services' RADV final rule will result in a 2.27% cut to plans if finalized, and this could have a negative impact on members' premiums and benefits, as well as slow MA growth, according to a new Avalere study commissioned by Better Medicare Alliance.
On a Zoom call with reporters last week, BMA President and CEO Mary Beth Donahue said the RADV final rule would raise costs and cut benefits for the roughly 30 million seniors and people with disabilities who are on Medicare Advantage.
Payers' estimates of a more than 2% payment cut contradict projections from CMS, which said it expected a 1.03% increase for plans from the advance notice for Medicare Advantage and Part D plans for 2024 after factoring in a decline in payments when accounting for risk adjustment changes.
CMS has pushed back, but payers are adamant the changes would result in cuts.
A two-part 2021 article published in Health Affairs offered a severe critique of the Medicare Advantage program. A chief criticism was that the MA risk-adjusted coding system results in significant overpayment because of risk score inflation.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
