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-------- Original Message --------
Subject: qotd: CMS shows that the healthy go in and the sick come out
of Medicare Advantage plans
Date: Mon, 4 Feb 2013 08:53:45 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>
Centers for Medicare & Medicaid Services
Medicare & Medicaid Research Review
2012: Volume 2, Number 4
Impact of Continued Biased Disenrollment from the Medicare Advantage
Program to Fee-for-Service
By Gerald F. Riley
Background: Medicare managed care enrollees who disenroll to
fee-for-service (FFS) historically have worse health and higher costs
than continuing enrollees and beneficiaries remaining in FFS.
Objective: To examine disenrollment patterns by analyzing Medicare
payments following disenrollment from Medicare Advantage (MA) to FFS in
2007. Recent growth in the MA program, introduction of limits on timing
of enrollment/disenrollment, and initiation of prescription drug
benefits may have substantially changed the dynamics of disenrollment.
Conclusions: Despite substantial changes in policies and market
characteristics of the Medicare managed care program, disenrollment to
FFS continues to occur disproportionately among high-cost beneficiaries,
raising concerns about care experiences among sicker enrollees and
increased costs to Medicare.
Discussion
Despite substantial changes in policies and market characteristics of
the Medicare managed care program, disenrollment to FFS continues to
occur disproportionately among high-cost beneficiaries. Disenrollees had
higher risk scores and incurred higher risk-adjusted payments than
beneficiaries in FFS. Their high risk scores are in contrast to the risk
scores of the general MA population, most of which is enrolled in plans
with average risk scores similar to or less than local FFS experience
(United States Government Accountability Office, 2010). Recent studies
have also shown that MA plans continue to experience favorable selection
through enrollment of low-cost beneficiaries (MedPAC, 2012; Riley,
2012). These research findings suggest a pattern of selective
disenrollment whereby disenrollees are sicker and more expensive than
the beneficiaries who remain enrolled in MA plans. This selective
disenrollment potentially increases Medicare costs through the return of
high-cost beneficiaries to the FFS sector, leaving behind a healthier
and lower-cost population in the capitated MA sector.
The Affordable Care Act mandated changes to MA payment methods that will
result in significant decreases in payment rates and bring them closer
in line with plan costs. This may intensify pressure on plans to
encourage selective disenrollment.
Disenrollees from PPOs and PFFS plans incurred lower payments
post-disenrollment than disenrollees from HMOs and similar types of
plans, and their average payments were closer to predicted levels.
Possible explanations include a less chronically ill disenrollee
population from PPO and PFFS plans, or less unmet demand for services
when they transitioned to FFS. Less selective disenrollment from PPO and
PFFS plans may be attributable to the more extensive network of
providers available under these types of plans. Beneficiaries with
chronic illnesses have a greater choice of physicians to manage their
conditions and have more opportunities to switch providers if they
become dissatisfied with their care. This expanded choice of providers
may reduce the incentives for chronically ill enrollees to leave these
types of plans.
http://www.cms.gov/Research-Statistics-Data-and-Systems/Research/MMRR/Downloads/MMRR2012_002_04_A08.pdf
Comment: Earlier studies of the Medicare + Choice plans and more recent
studies of the successor Medicare Advantage plans have shown that, when
it comes to managed care, the healthy go in and the sick come out.
Taxpayers are paying more for the healthier, less-costly patients who
are enrolled in the Medicare Advantage plans, and then pay more for the
sicker patients who return to the traditional Medicare program (adverse
selection). This CMS study adds to that evidence.
One interesting finding in this study is that those enrolled in PPO or
FFS Medicare Advantage plans did not show as great post-enrollment cost
increases. It is likely that the patients did not experience as much of
a limitation in services in PPO plans, such as those offered by Blue
Cross and Blue Shield, since their networks tend to include a much
larger percentage of the physician population.
There are two important take-home points here. One is that we should
stop wasting taxpayer funds on both the excesses of the Medicare
Advantage plans, and the costly adverse selection burden that they place
on the traditional Medicare program.
The other point is that we should reject the policies of the private
insurance sector that is taking away our health care choices by
establishing networks of health care providers. Our traditional Medicare
program includes a choice of any provider, except for the rare physician
who totally opts out of the Medicare program.
For greater economy and expanded choice, we should change to a program
of an improved Medicare for everyone.
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