Impact of HMO withdrawals on vulnerable Medicare beneficiaries

The Medicare+Choice (M+C) program has faced successive waves of plan withdrawals since 1999. We collected data from 1,055 beneficiaries who were involuntarily disenrolled from a health maintenance organization (HMO) that withdrew from six large markets in 1999 to investigate how they were impacted by the forced change in coverage. Administrative data from this HMO were used to oversample beneficiaries who were perceived to be vulnerable based on their poor health status in the period before the HMO withdrawal. Although most beneficiaries dealt with the withdrawals without major problems, appreciable numbers of beneficiaries did report adverse impacts. These negative impacts were more likely to occur for low-education, low-income, minority beneficiaries. We found little evidence, however, that beneficiaries who were vulnerable due to their poorer health experienced more adverse effects.     

Biased enrollment of Medicare beneficiaries in HMO plans--implications for Medicare costs

Policymakers assumed that the enrollment of Medicare beneficiaries in health maintenance organization (HMO) plans would generate significant cost savings for Medicare. The Health Care Financing Administration (HCFA) calculates the reimbursement to HMOs per Medicare beneficiary on the basis of individual and community-specific characteristics. Estimates of the individual-specific profitability rate for enrolling an individual in a Medicare HMO risk plan suggest that the probability of enrollment in HMOs increases with a higher profitability score. The probability of not enrolling high-loss cases is found to be high, indicating that the biased selection in HMO plans actually increases the overall cost of running the Medicare program.     

Predicting hospital choice for rural Medicare beneficiaries: the role of severity of illness.

Previous research has confirmed that desirable hospital attributes as well as increased distance, or travel time, have an impact on hospital choice. These studies have become increasingly sophisticated in modeling choice. This study adds to the existing literature by estimating the effect of both hospital and individual characteristics on hospital choice, using McFadden's conditional logit model. Some patient characteristics have not previously been accounted for in this type of analysis. In particular, the effect of a patient's complexity of illness (as measured by Disease Staging) on the choice of hospital is taken into account. The data consist of over 12,000 Medicare discharges in three overlapping rural market areas during 1986. The hospital choice set was aggregated into seven groups of urban and rural hospitals. Results indicate that rural Medicare beneficiaries tend to choose hospitals with a large scope of service and with teaching activity over those with a lower scope of service and no teaching activity, holding other factors constant. Distance is a deterrent to hospital choice, especially for older Medicare beneficiaries. The more complex cases tend to choose larger urban and rural hospitals over small rural hospitals more often than less complex cases do.     

Estimating Medicare advantage lock-in provisions impact on vulnerable Medicare beneficiaries

Beginning January 2006, Medicare beneficiaries will have limited ability to change health plans. We examine the Medicare managed care enrollment and disenrollment behavior of traditionally vulnerable beneficiaries from 1999-2001 to estimate the potential impact of the new enrollment restrictions. Findings that several such groups were more likely to make multiple health plan elections, leave their managed care plan midyear, and/or have higher voluntary disenrollment rates and transfers to original fee-for-service (FFS) Medicare suggest that the lock-in provisions may have greater negative impacts on vulnerable beneficiaries. This article identifies several recommendations that CMS might consider to lessen the detrimental effects on at-risk groups.     

Medicare physician payment changes: impact on physicians and beneficiaries

The Balanced Budget Act (BBA) of 1997 generally reduced Medicare payments for surgical services while increasing them for other services. Concern about implications of these fee reductions prompted the Medicare Payment Advisory Commission to sponsor a national survey of physicians to learn their views on Medicare payment and whether access to care has changed for Medicare beneficiaries. Results suggest that beneficiaries' access to care has not declined. While physicians are concerned about Medicare reimbursement, they are more concerned about reimbursement from managed care plans and Medicaid. Continued monitoring will be important to detect any emerging access problems accompanying upcoming payment reductions.     

Nonuse of local hospitals by rural Medicare beneficiaries

Previous studies of hospital utilization by rural residents suggest that local hospitals were often bypassed for treatment in larger, urban hospitals. This study examines hospital utilization by aged rural Medicare beneficiaries in Minnesota and Kentucky residing in zip codes that have local hospitals using FY 1987 Medicare discharge data. Most of these beneficiaries were hospitalized locally. Beneficiaries not using hospitals likely did so because cardiovascular surgical procedures were required and were often only performed in large urban teaching hospitals. Bypassing appears to be due to regionalization of care rather than dissatisfaction with local hospitals.     

Disenrollment from an HMO and its relationship with the characteristics of Medicare beneficiaries

To examine the relationship between Medicare beneficiaries' characteristics and disenrollment, a longitudinal study was conducted in an HMO in California. Approximately 10 percent of the Medicare beneficiaries disenrolled within the first year of enrollment. There was no difference between those who continuously enrolled and those who disenrolled in terms of age, gender, mental and physical health status, previous utilization, and anticipated utilization in the coming year. However, people with limited social activities and people not living in a single-family house were more likely to disenroll. The authors also examined the disenrollment rates among physicians groups. The rates were significantly different.     

Hospital back-up days: impact on joint Medicare and Medicaid beneficiaries

In this article the question of whether nursing home market characteristics affect the ability of hospitals to discharge patients to nursing homes is examined. Also examined is the question of whether joint Medicare and Medicaid beneficiaries have a more difficult time being placed than do other patients. The principal conclusions are first, that the nursing home bed supply and the type of Medicaid payment system affect the ability of hospitals to discharge patients to nursing homes. Joint Medicare and Medicaid beneficiaries have a more difficult time being placed in nursing homes in States with fewer beds and more restrictive Medicaid payment policies, and joint beneficiaries do not appear to have longer stays in hospitals. Rather, they have a greater likelihood of being discharged to home.     

Physician choice directories: the impact on HMO members' perceptions.

It is a generally held belief that enrolled members of a health maintenance organization (HMO) will be more satisfied with their HMO and physicians if those members have a relationship with a personal physician. Public relations and marketing managers, therefore, in an attempt to encourage the establishment of such relationships, spend significant resources producing physician choice directories for their HMO members. But to what extent do these directories impact members? Do the HMO members read them? If so, do they take advantage of the opportunity to choose a personal physician? And if they do choose, what affect does that choice behavior have on satisfaction levels? The experience of one large, group model HMO suggests that physician choice directories enhance members' confidence in their physicians and their satisfaction with personalized care.     

Risk differential between Medicare beneficiaries enrolled and not enrolled in an HMO.

Medicare provides incentive reimbursements to health maintenance organizations (HMOs) which enroll Medicare beneficiaries on a risk option and provide care at a lower cost than expected. The incentive reimbursements are tied to an actuarial calculation of Medicare Adjusted Average Per Capita Cost (AAPCC). The AAPCC adjusts for a number of variables which affect Medicare reimbursements and for which data are available: place of residence, age, sex, welfare status, and institutional status of beneficiaries. These factors account for much of the expected difference in health care reimbursements. They do not, however, account for differences in health status. Because of this, AAPCC calculations of expected costs may be too high if a selected group of beneficiaries is healthier than average, or too low if the selected group has a poorer health status than average. This case study examines the utilization behavior and reimbursement experience of a group of Medicare beneficiaries prior to their joining an HMO (during an open enrollment period) under a risk-sharing option. Their use was compared with a comparable Medicare population (the comparison group) to determine if their usage rates were greater, equal, or less than average. Results show that beneficiaries who joined during open enrollment had a rate of hospital inpatient use over 50 percent below the comparison group and a reimbursement rate for inpatient services 47 percent below the comparison group. These beneficiaries' use of Part B services also appears to be lower than the comparison group. These results must be interpreted with care. The information came from a single case study. Specific aspects of the open enrollment process, described in the paper, further limit the general liability of the findings. Also, while some studies of the same subject support the results, many others do not.     

Provider specialty choice among Medicare beneficiaries treated for psychiatric disorders

This study estimates the probability of mental health specialist use among elderly and disabled Medicare beneficiaries treated for a primary psychiatric diagnosis, based on the 1991 Medicare Current Beneficiary Survey (MCBS) and physician claims. Beneficiaries with psychotic and affective disorders or multiple psychiatric diagnoses had a higher probability of specialty use, as did beneficiaries in counties with greater psychiatrist density. Elderly in counties with greater general practitioner density and disabled in counties with greater psychologist density were less likely to see a specialist, suggesting possible provider substitution. Government programs to recruit and retain mental health professionals in underserved areas may change provider specialty choices among Medicare beneficiaries treated for psychiatric disorders.     

Marketing prevention to elderly Medicare beneficiaries enrolled in an HMO. The San Diego Medicare Preventive Health Project

A comprehensive marketing effort--using direct mail, telemarketing, and orientation seminars--to enroll elderly participants in a Medicare preventive health services demonstration project was undertaken in 1989. Out of the more than 11,000 eligible members in a large Medicare HMO plan in San Diego County, 1,800 (16.2%) agreed to participate. The authors describe the recruiting effort in detail and postulates reasons why the elderly resisted enrolling in the study. These results have important policy implications for the nation's Medicare program and are relevant to promoting other useful health care services in this population.     

Effect of Medicare advantage payments on dually eligible Medicare beneficiaries

This study estimates the effect of Medicare Advantage (MA) payments and State Medicaid policies on the choice by Medicaid eligible Medicare beneficiaries to either join a MA plan, remain in the fee-for-service (FFS) and enroll in Medicaid (dually enrolled), or remain in FFS Medicare without joining Medicaid. Individual plan choice was modeled using a multinomial logit. The sample includes Medicaid-eligible Medicare beneficiaries (including specified low income Medicare beneficiaries [SLMBs] and qualified Medicare beneficiaries [QMBs]) drawn from the 2000 Medicare Current Beneficiary Survey (MCBS). We find a $10 increase in monthly MA payment reduces the probability of dual enrollment by four percentage points, and FFS Medicare enrollment by 11 percentage points.     

The impact of Medicaid expansion on spending and utilization by older low-income Medicare beneficiaries

Objective

To examine indirect spillover effects of Affordable Care Act (ACA) Medicaid expansions to working-age adults on health care coverage, spending, and utilization by older low-income Medicare beneficiaries.

Data Sources

2010–2018 Health and Retirement Study survey data linked to annual Medicare beneficiary summary files.

Study Design

We estimated individual-level difference-in-differences models of total spending for inpatient, institutional outpatient, physician/professional provider services; inpatient stays, outpatient visits, physician visits; and Medicaid and Part A and B Medicare coverage. We compared changes in outcomes before and after Medicaid expansion in expansion versus nonexpansion states.

Data Collection/Extraction Methods

The sample included low-income respondents aged 69 and older with linked Medicare data, enrolled in full-year traditional Medicare, and residing in the community.

Principal Findings

ACA Medicaid expansion was associated with a 9.8 percentage point increase in Medicaid coverage (95% CI: 0.020–0.176), a 4.4 percentage point increase in having any institutional outpatient spending (95% CI: 0.005–0.083), and a positive but statistically insignificant 2.4 percentage point change in Part B enrollment (95% CI: −0.003 to 0.050, p = 0.079).

Conclusions

ACA Medicaid expansion was associated with more institutional outpatient spending among older low-income Medicare beneficiaries. Increased care costs should be weighed against potential benefits from increased realized access to care.     

Cost of caring for Medicare beneficiaries with Parkinson's disease: impact of the CMS-HCC risk-adjustment model.

Previous studies have demonstrated that Medicare risk-adjusted capitation models do not adequately compensate programs serving primarily disabled or frail populations. Using the Medicare Current Beneficiary Survey, we demonstrate that the Centers for Medicare and Medicaid Services-Hierarchical Condition Categories (CMS-HCC) model calculates Medicare capitation payments for Parkinson's patients more accurately than for the general population. The discrepancies between the predicted and actual expenditures estimated at various disability levels were smaller for Parkinson's patients than for other beneficiaries. If the CMS-HCC payment model were to apply to programs that draw a significant percentage of their participants from the Parkinson's disease community, these programs likely would be compensated fairly.