Medicare Advantage and Post-Acute Care

By January 25, 2017Commentary

Medicare Advantage now covers almost a third of all Medicare beneficiaries.  The program has been criticized at times for paying plans too much and other supposed shortcomings.  But increasing evidence suggests that the MA plans provide better care coordination and better patient outcomes, at similar cost to CMS.  Patients are generally satisfied with MA and they tend to have lower cost-sharing than if they were in the fee-for-service program.  A new study carried in Health Affairs extends the positive research by looking at how Medicare Advantage plans handle post-acute care.   (HA Article)   Post-acute care, which occurs after a hospitalization in a variety of settings, has been problematic for FFS Medicare, with significant spending and is the source of a fair amount of fraud and abuse.  The researchers looked at data from 2011 to 2013 on post-acute use for three common hospitalization conditions.  They excluded home health care and long-term care hospital use from their analysis, so the focus was on skilled nursing facility and inpatient rehab facilities.  They compared use of these settings between MA beneficiaries and FFS ones, on an adjusted basis that included factors like beneficiary health status.  And they examined outcomes like readmissions and mortality.

Over a million episodes were included in the analysis.  The MA patients were slightly more likely to be male, slightly younger, more likely to be African-Americans, and less likely to be non-Hispanic Caucasians than were the FFS Medicare ones.  Overall, medical severity was equivalent between the two populations.  MA patients were slightly more likely to be admitted to a SNF following joint replacement, but spent fewer days there.   MA beneficiaries were 6 percentage points less likely to be admitted to an inpatient rehab facility following joint replacement, but length of stay was similar to that for FFS patients.  Stroke patients showed a similar pattern and those with heart failure had significantly lower SNF use if they were MA beneficiaries.  MA patients across all conditions had lower rates of hospital readmissions and mortality rates were roughly equivalent across both groups.  If FFS beneficiaries were treated in the same manner as MA ones are, Medicare would spend 16% less on post-acute care annually, just for these three conditions.  A side finding was that hospitals discharged MA members to a smaller number of facilities, consistent with narrower networks for MA plans.  This research supports the notion that MA plans are doing a better job of managing the health needs of beneficiaries, and can lower costs for CMS.

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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