Quality of Home Health Agencies Used by Medicare Advantage Plans

By October 17, 2019 Commentary

Medicare Advantage plans make money by the obvious means of managing care so that spending is lower than the revenues they receive from CMS.  In the course of doing this, most research has found that the plans provide as good or better quality than that received by fee-for-service Medicare beneficiaries.  A new study carried by the Journal of the American Medical Association Network Open, however, suggests that Medicare Advantage plans tend to use lower-quality home health care agencies, which may or may not mean they actually deliver lower quality care to the members of the plans.   (JAMA Article)   The authors looked at data from 2015 to assess the extent to which beneficiaries in traditional Medicare, low-quality rated Medicare Advantage plans or high-quality rated MA plans received care from high or low-quality rated home health agencies.  The quality of the home health agencies was solely determined by the CMS star rating system, so there is your first problem.  There isn’t a lot of research suggesting that that rating system is actually clearly associated with the most meaningful measure of quality–the actual health of beneficiaries.  75% of the over 5 million home health episodes included in the analysis were for traditional Medicare beneficiaries.  Of the the remainder, about 17% were enrolled in high-quality rated MA plans and about 8% in low-quality rated ones.

Lumping the home health agencies in low, middle and high quality buckets, fee-for-service beneficiaries received care from high-quality rated home health agencies 30.4% of the time and low-rated ones 17% of the time.  For comparisons with Medicare Advantage beneficiaries, the authors for some bizarre reason don’t give us a total analysis but split the MA results into highly and lowly-rated plans.  Doing my best to figure out enrollment-weighted numbers in total it appears that the MA beneficiaries may have been around 1.5 percentage points more likely to get care from a low-rated home health agency.  The authors’ hypothesis, of course, is that lower-quality home health agencies charge less, so the MA plans use them more often to save money.  They present zero evidence to suggest that lower-quality home health agencies are reimbursed at a lower level by MA plans.  They similarly present zero evidence to indicate that lower-quality rated home health agencies deliver actual lower-quality health outcomes to MA beneficiaries.  The authors minimized a finding that distance to the nearest high-quality home health agency accounted for most of the difference in use.  That is, if the nearest high-quality home health firm was far away, all beneficiaries were equally likely to receive care from the same-rating level agency.   So nothing but speculation in this study.  And even at the very superficial level of their analysis the difference in use of home health firms in different buckets is negligible.

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