By David J. Meyers, MPH; Emmanuelle Belanger, PhD; Nina Joyce, PhD; John McHugh, PhD; Momotazur Rahman, PhD; Vincent Mor, PhD
JAMA Internal Medicine, February 25, 2019
From the Introduction
More than one-third of Medicare beneficiaries are now enrolled in MA (Medicare Advantage), an increase from 19% in 2007. Medicare Advantage differs from TM (Traditional Medicare) in that private insurance plans are paid by the Centers for Medicare & Medicaid Services (CMS) on a capitated basis to cover the care of their enrollees. Because payments are fixed, this model incentivizes payers to reduce spending. Medicare Advantage plans may emphasize better primary care and care management services for high-need enrollees to prevent expensive acute services down the line. Two potential barriers to these benefits exist: capitated payments when not properly risk adjusted may incentivize “cream skimming” and “lemon dropping” (ie, attracting healthier individuals and dropping those with higher needs). Medicare Advantage plans may also restrict physician networks and require prior authorization for care. These policies may be challenging for high-need enrollees, potentially leading to poorer experiences. Understanding the experiences of high-need beneficiaries enrolled in MA is vital if the benefits of managed care are to work for this group.
A growing body of literature suggests that concerns remain regarding MA plans for high-need enrollees. Although some disenrollment may be driven by error in plan choice, MA switch to TM occurs at higher rates after significant health events and kidney failure. Evidence from the nursing home industry suggests that MA enrollees have access to lower-quality nursing homes and have high rates of disenrollment after admission. The Government Accountability Office has expressed concern that sicker patients disenroll in a biased manner. This possibility is of particular concern for patients with complex chronic conditions or multiple morbidities who stand to lose the most in disruptions to continuity of care. Disenrollment is often a sign of revealed preference, perhaps even more so if disenrollment rates are differential by patient type, which might suggest that the program does not address the preferences of these enrollees with high use of medical services.
From the Results
Across all groups, high-need enrollees had the highest rate of MA disenrollment by the end of 2015, with 2.6% (95% CI, 2.4%-2.7%) non– dual-eligible enrollees leaving the highest-rated plans and 10.6% (95% CI, 10.0%-11.2%) non–dual-eligible enrollees leaving the lowest rated plans. Disenrollment rates tended to be higher among those enrolled in lower-quality plans. Full dual-eligible enrollees left MA at the highest rates, with 11.1% (95% CI, 10.6%-11.6%) leaving the highest-rated plans and 18.5% (95% CI, 17.8%-19.3%) leaving the lowest-rated plans. However, dual-eligible beneficiaries also left TM to enter MA at the high rates, with more than 15% of non–high-need, fully dual-eligible TM enrollees switching to MA during the study period.
23.0% (95% CI, 22.3%-23.9%) of non–dual-eligible, high-need enrollees in low-rated MA plans disenrolled to TM, and disenrollment was even higher at 42.8% (95% CI, 40.5%-45.1%) among comparable high-need dual-eligible enrollees. Generally, enrollees in lower-rated plans disenrolled at higher rates than enrollees in higher-rated plans. Even in 5.0-star plans, however, high-need enrollees were more likely to disenroll (4.9% [95% CI, 4.6%-5.2%] of non–dual-eligible high-need enrollees compared with 1.8% [95% CI, 1.8%-1.9%] of non–dual-eligible and 2.4% [95% CI, 2.1%-2.7%] of dual-eligible non–high-need enrollees).
From the Discussion
We find that high-need and dual-eligible enrollees have substantially higher disenrollment rates when compared with non–high-need enrollees. This finding aligns with that of the recent Government Accountability Office report on disenrollment and other recent examples from the literature that suggest that MA plans may not currently meet the preferences of high-need enrollees. We also found large movement of TM enrollees into MA during the study period, particularly among dual-eligible beneficiaries, indicating a high level of switching in this population.
Several factors may explain differential disenrollment during this study period. Although risk adjustment has mitigated some cream skimming, plans may still not have an incentive to retain their high-need enrollees, leading to adverse selection not on who enrolls in plans but on those who disenroll. The limitations (eg, narrow networks, prior authorizations, etc) enacted by MA plans to control costs may not align with the preferences of enrollees who have complex care needs. Lower disenrollment rates from high-rated plans may be indicative of these plans providing fewer restrictions in access to care or other benefits to such enrollees. Beneficiaries with better health and socioeconomic status may also be better equipped to make more informed plan choices when first enrolling in MA. High-need enrollees may select suboptimal contracts when they first enroll in the program, and, when faced with the limitations those contracts contain, may be prompted to switch more often than healthier enrollees. High-need enrollees may also be enrolled in lower-rated plans because their more serious health needs exert a downward pull on the overall contract rating.
The largest changes in enrollment status from TM to MA and from MA to TM occurred among enrollees with dual eligibility with Medicaid. This finding is likely explained in part by dual-eligible enrollees being able to switch plans at any point during the year. An interplay between a state Medicaid managed care program and an MA plan may encourage more switching.
We find that high-need enrollees, particularly those who are dual eligible, disenroll from MA at substantially higher rates than other enrollees. Thus, our findings suggest that caution is warranted when evaluating the performance of MA plans owing to the potential for selection bias stemming from differential disenrollment. As of now, disenrollment is only 1 of 35 to 45 measures included in the MA star ratings system. Weighting disenrollment more heavily may help incentivize plans to address these concerns further. Although MA may have the potential to provide greater care coordination to address complex patient needs, it is unclear whether high-need enrollees who stand to benefit the most from care coordination are in fact benefiting.
By Don McCanne, M.D.
The private Medicare Advantage insurers have been successful in marketing their plans, presumably because the enrollees perceive the plans to be superior to the traditional Medicare program, perhaps partly because of the touted benefits of managed care. However, this study shows that high-need enrollees, particularly those who are dual eligible (enrolled in both Medicare and Medicaid) disenroll from Medicare Advantage plans at substantially higher rates than other enrollees.
Supporters of privatization of Medicare through Medicare Advantage plans claim that patients are very satisfied with their coverage, but this report suggests that may be true only for individuals who do not have high health care needs. If they do have greater needs, they disenroll at higher rates.
Back in the days of the managed care revolution and the earlier Medicare + Choice plans, it quickly became evident that the healthy go into the plans and the sick come out. It appears that the tools of the current private Medicare Advantage plans have not reversed this trend. The plans seem to succeed primarily by keeping the low-cost healthy patients happy (lower cost sharing and extra benefits funded by the taxpayers), but shouldn’t we expect more out of our health care system?
Why don’t we improve Medicare and then expand it to cover everyone while using equitable public financing to make it affordable for each of us? Then everyone would be happy with the system, regardless of their medical needs.
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