Impact of Medicare managed care market withdrawal on beneficiaries

The 2001 Survey of Involuntary Disenrollees was conducted to investigate the impact of Medicare+Choice (M+C) plan withdrawals on Medicare beneficiaries. Eighty-four percent of a total of 4,732 beneficiaries whose Medicare managed care (MMC) plan stopped serving them at the end of 2000 responded to the survey. Their responses indicated that the withdrawal of plans from Medicare affected beneficiaries in terms of concerns about getting and paying for care, increased payments for premiums and out-of-pocket costs, and changes in health care arrangements. Of particular concern were the impacts on those in vulnerable subgroups such as the disabled, less educated, and minorities.     

Medicaid confronts a changing managed care marketplace

After two decades of concerted efforts, more than one-half of all Medicaid beneficiaries are now enrolled in managed care arrangements. Most States appear strongly committed to continued reliance on managed care, but the contemporary managed care marketplace is undergoing a number of significant changes. We describe how several of these developments are being revealed in commercial managed care and discuss implications for Medicaid purchasers and beneficiaries. State Medicaid agencies will have to adapt managed care strategies to respond to the evolving products and practices of managed care plans and their interest in public sector product lines.     

Reconsidering the effect of Medicaid on health care services use.

OBJECTIVE: Our research compares health care use by Medicaid beneficiaries with that of the uninsured and the privately insured to measure the program's effect on access to care. DATA SOURCES/STUDY SETTING: Data include the 1987 National Medical Expenditure Survey and the Survey of Income and Program Participation for 1984-1988. STUDY DESIGN: We predict annual use of ambulatory care and inpatient hospital care for Medicaid beneficiaries receiving AFDC cash assistance and compare it to what their use would be if uninsured or if covered by private insurance. Comparisons are based on multivariate models of health care use that control for demographic and economic characteristics and for health status. Our model distinguishes among Medicaid beneficiaries on the basis of eligibility to account for the poor health of beneficiaries in some eligibility groups. PRINCIPAL FINDINGS: AFDC Medicaid beneficiaries use considerably more ambulatory care and inpatient care than they would if they remained uninsured. Use among the AFDC Medicaid population is about the same as use among otherwise similar, privately insured persons. Use rates differ substantially among different Medicaid beneficiary groups, supporting the expectation that some beneficiary groups are in poor health. CONCLUSIONS: Although Medicaid has increased access to health care services for beneficiaries to rates now comparable to those for the privately insured population, because of lower cost sharing in Medicaid we would expect higher service use than we are finding. This suggests possible barriers to Medicaid patients in receiving the care they demand. Enrollment of less healthy individuals into some Medicaid beneficiary groups suggests that pooled purchasing arrangements that include Medicaid populations must be designed to ensure adequate access for the at-risk populations and, at the same time, to ensure that private employers do not opt out because of high community-rated premiums.     

Shifting the paradigm: monitoring access in Medicare managed care

Medicare managed care enrollment growth points to the need to develop an approach for monitoring access to care for the increasing number of beneficiaries who use these arrangements. This article describes the issues to be addressed in designing a system for monitoring managed care plan enrollees' ability to obtain needed medical care on a timely basis. We review components of the monitoring approach used for traditional fee-for-service (FFS) Medicare, including the conceptual framework, data, measures, and subgroups targeted in monitoring efforts, and discuss the adaptation of that approach for monitoring access in Medicare managed care.     

Service Use of Rural and Urban Medicaid Beneficiaries Suffering From Depression: The Role of Supply

Despite the prevalence and consequence of depression in rural areas, the literature on treating depression in rural areas is relatively scarce and inconclusive. The use of mental health services by rural people suffering from depression and the role that supply may play in explaining these differences are not well understood. Understanding these issues for rural Medicaid beneficiaries is important as Medicaid managed carefor physical and behavioral health care is expanded to rural areas. This study compares the mental health service use of rural and urban Medicaid beneficiaries, ages 18 to 64, in Maine suffering from depression and examines what influence mental health and primary care supply have in explaining observed differences. Two models are used to estimate the use of ambulatory mental health services: (1) a logit likelihood estimate of whether a beneficiary uses any outpatient mental health services for depression; (2) an ordinary least squares regression estimating the number of annualized ambulatory mental health care visits among users. Rural beneficiaries suffering from depression have lower utilization than urban beneficiaries. Rural and urban Aid for Families with Dependent Children (AFDC)--and Supplemental Security Income (SSI)--beneficiaries suffering from depression rely more on mental health than on general health care providers to receive ambulatory mental health care. Rural beneficiaries (AFDC and SSI) rely relatively more on general health care providers than urban beneficiaries. Multivariate analysis suggests that mental health supply and patient-level factors, but not primary care supply, account for utilization differences. This article describes the need to better understand factors limiting participation of primary care providers and to study the role of supply across multiple states.     

Impact of Critical Access Hospital Conversion on Beneficiary Liability

ABSTRACT: Context: While the Medicare Critical Access Hospital (CAH) program has improved the financial viability of small rural hospitals and enhanced access to care in rural communities, the program puts beneficiaries at risk for paying a larger share of the cost of services covered under the Medicare part B benefit. Purpose: This paper examines the impact of hospital conversion to CAH status on beneficiary out‐of‐pocket coinsurance payments for hospital outpatient services. Methods: The study is based on a retrospective observational design using administrative data from Medicare hospital cost reports and fee‐for‐service beneficiary claims from 1999 to 2003. The study compares changes in beneficiary co‐payments before versus after CAH conversion with payment trends among small rural non‐converting hospitals over the same period. Findings: Conversion to CAH status is associated with an increase in beneficiary coinsurance payments per outpatient visit of $17.19, equivalent to 34% of the sample average. However, CAH designation had no significant effect on the share of outpatient costs paid by the beneficiary. Most of the increase in beneficiary liability associated with conversion is attributable to the provision of more services per outpatient visit. Conclusions: While this and other studies show that conversion to CAH status results in more intensive outpatient care, CAH conversion does not appear to inadvertently create financial barriers to accessing ambulatory services in remote rural communities by forcing beneficiaries to pay a higher share of their Medicare part B costs.     

Patient assessments of care and utilization in Medicaid managed care: PCCMs vs. PSOs

States are experimenting with different forms of delivery and financing to make Medicaid expenditures more predictable. Florida Medicaid is experimenting with a relatively new form of managed care, the provider-sponsored organization (PSO). Using the Donabedian structure-process-outcome (SPO) model, patient experiences and utilization in Florida PSOs and primary care case management (PCCM) were compared. The study analyzed Consumer Assessments of Healthcare Providers and Systems (CAHPS) data for 1,257 Medicaid beneficiaries in Florida in 2005. Results showed that beneficiaries in the PSOs had similar ratings and reports of care to those in the PCCM. However, PSOs had lower physician visits compared to the PCCM, indicating potential access barriers to primary care. The PSO's impact on emergency department (ED) utilization and specialist utilization was similar to that of the PCCM. The PSOs may lower costs, but the savings may be due to lower physician utilization rather than better case management. This is important since states that are experimenting with PSOs in their Medicaid programs are looking to these organizations to improve beneficiary care while lowering costs.     

Ambulatory Care Sensitive Hospitalization Rates in the Aged Medicare Population in Utah, 1990 to 1994: A Rural-Urban Comparison

The objective of this study is to compare the likelihood of hospitalization for conditions that are related to the adequacy and use of ambulatory health care services for Medicare beneficiaries residing in rural and urban regions in Utah. The Health Care Financing Administration's (HCFA) hospital discharge database (Utah hospitals: 1990 to 1994) was used to estimate hospitalization rates (with adjustment for out-of-state admissions) for ambulatory care sensitive conditions. Population estimates were obtained from HCFA beneficiary files. Regional hospitalization rates were obtained through ZIP code matching of the hospital discharge and beneficiary files. Medicare beneficiaries aged 65 and older residing in Utah during 1990 to 1994 are the subjects for the study. The main outcome measures include age and sex-adjusted hospitalization rates by region for the entire state and rate ratio estimates for nonurban regions. The results of the study show that Medicare beneficiaries residing in two rural-frontier regions were more likely than urban beneficiaries to be hospitalized for ambulatory care sensitive conditions. Rate ratio estimates were greater than 1.4 for both regions during the study period. These findings suggest a pattern of an increased burden of avoidable secondary complications and disease progression among Utah Medicare beneficiaries residing in some rural regions. This increased burden may be the result of limitations in the ambulatory care system, medical care provider supply, and/or beneficiary propensity to seek care. Variation in disease prevalence or hospital use patterns for these conditions also may be responsible for all or part of the observed variation in ambulatory care sensitive admission rates.     

Managed care: a critical review.

Widely perceived and accepted as the simplest way to control escalating health care costs, managed care is the way health care is now, and will continue to be, delivered in the foreseeable future. Growing numbers of Medicaid beneficiaries are required to participate in managed health care and Medicare beneficiaries are strongly encouraged to do so. In essence, America's poor and elderly are serving as the vanguard for health care reform. This article describes the evolution of managed care in the United States, then examines the implications of the transfer of financial risk to health care providers; the impact of managed care on existing inequalities in access to health care and services; the quality of managed care compared with fee-for-service arrangements; and the delivery of mental health services under managed care. We suggest that the role of the social work profession in managed care should be to mitigate the costs borne by clients, and offer specific suggestions for advocates in this arena.     

Medicare's risk-adjusted capitation method

Since 1997, the method to establish capitation rates for Medicare beneficiaries who are members of risk-bearing managed care plans has undergone several important developments. This includes the factoring of beneficiary health status into the rate-setting calculations. These changes were expected to increase the number of participating health plans, accelerate Medicare enrollment growth, and slice Medicare spending.     

Health insurance knowledge among Medicare beneficiaries

OBJECTIVE: To assess the effect of new consumer information materials about the Medicare program on beneficiary knowledge of their health care coverage under the Medicare system. DATA SOURCE: A telephone survey of 2,107 Medicare beneficiaries in the 10-county Kansas City metropolitan statistical area. STUDY DESIGN: Beneficiaries were randomly assigned to a control group and three treatment groups each receiving a different set of Medicare informational materials. The "handbook-only" group received the Health Care Financing Administration's new Medicare & You 1999 handbook. The "bulletin" group received an abbreviated version of the handbook, and the "handbook + CAHPS" group received the Medicare & You handbook plus the Consumer Assessment of Health Plans (CAHPS) survey report comparing the quality of health care provided by Medicare HMOs. Beneficiaries interested in receiving information were oversampled. DATA COLLECTION METHODS: Data were collected during two separate telephone surveys of Medicare beneficiaries: one survey of new beneficiaries and another survey of experienced beneficiaries. The intervention materials were mailed to sample members in advance of the interviews. Knowledge for the treatment groups was measured shortly after beneficiaries received the intervention materials. PRINCIPAL FINDINGS: Respondents' knowledge was measured using a psychometrically valid and reliable 15-item measure. Beneficiaries who received the intervention materials answered significantly more questions correctly than control group members. The effect on beneficiary knowledge of providing the information was modest for all intervention groups but varied for experienced beneficiaries only, depending on the intervention they received. CONCLUSIONS: The findings suggest that all of the new materials had a positive effect on beneficiary knowledge about Medicare and the Medicare + Choice program. While the absolute gain in knowledge was modest, it was greater than increases in knowledge associated with traditional Medicare information sources.     

The effects of benefit design and managed care on health care costs

Recently, the Department of Defense replaced its traditional fee-for-service insurance plan for military health care beneficiaries with an HMO/PPO hybrid. Using survey and claims data, we compare changes in costs over two years at sites that implemented this initiative (CRI) with changes at matched control sites. The results indicate that CRI substantially raised per beneficiary government costs for providing benefits (as compared to predicted costs in the absence of CRI). We attribute this difference to the higher overhead of managed care and the increased expenditures by HMO participants.     

The costs of decedents in the Medicare program: implications for payments to Medicare + Choice plans

OBJECTIVE: To discuss and quantify the incentives that Medicare managed care plans have to avoid (through selective enrollment or disenrollment) people who are at risk for very high costs, focusing on Medicare beneficiaries in the last year of life-a group that accounts for more than one-quarter of Medicare's annual expenditures. DATA SOURCE: Medicare administrative claims for 1994 and 1995. STUDY DESIGN: We calculated the payment a plan would have received under three risk-adjustment systems for each beneficiary in our 1995 sample based on his or her age, gender, county of residence, original reason for Medicare entitlement, and principal inpatient diagnoses received during any hospital stays in 1994. We compared these amounts to the actual costs incurred by those beneficiaries. We then looked for clinical categories that were predictive of costs, including costs in a beneficiary's last year of life, not accounted for by the risk adjusters. DATA EXTRACTION METHODS: The analyses were conducted using claims for a 5 percent random sample of Medicare beneficiaries who died in 1995 and a matched group of survivors. PRINCIPAL FINDINGS: Medicare is currently implementing the Principal Inpatient Diagnostic Cost Groups (PIP-DCG) risk adjustment payment system to address the problem of risk selection in the Medicare+Choice program. We quantify the strong financial disincentives to enroll terminally ill beneficiaries that plans still have under this risk adjustment system. We also show that up to one-third of the selection observed between Medicare HMOs and the traditional fee-for-service system could be due to differential enrollment of decedents. A risk adjustment system that incorporated more of the available diagnostic information would attenuate this disincentive; however, plans could still use clinical information (not included in the risk adjustment scheme) to identify beneficiaries whose expected costs exceed expected payments. CONCLUSIONS: More disaggregated prospective risk adjustment methods and alternative payment systems that compensate plans for delivering care to certain classes of patients should be considered to ensure access to high-quality managed care for all beneficiaries.     

Racial and ethnic differences in receipt of primary care services between medicaid fee-for-service and managed care plans

We used a cross-sectional, population-based sample of Medicaid beneficiaries aged 18-64 to determine whether managed care enrollment was associated with reduced racial/ethnic disparities in self-reported access to primary care services compared with fee-for-service. Managed care beneficiaries reported greater access in each racial/ethnic category and for each outcome than did fee-for-service beneficiaries, although associations were not always statistically significant. Racial/ethnic minorities enrolled in managed care plans reported as much benefit from managed care enrollment as did whites. Within Medicaid, interventions aimed at the health insurance delivery model can facilitate increased access to primary care services without enhancing racial/ethnic disparities.     

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.     

Outcomes for medicaid beneficiaries with schizophrenia under a prepaid mental health carve-out

This study examines the impact of a mental health carve-out program in Utah on mental health status of Medicaid beneficiaries with schizophrenia. Three community mental health centers contracted to provide mental health care for all Medicaid beneficiaries in their service areas under managed care arrangements, while beneficiaries in the remainder of the state remained under traditional Medicaid. A pre-post evaluation was utilized, with a contemporaneous control group of Utah Medicaid beneficiaries with schizophrenia under traditional Medicaid. From 1991 to 1994, the average beneficiary's mental health status improved, but the improvement was less under the carve-out program than under traditional fee-for-service Medicaid. The difference was the greatest for beneficiaries with the worst mental health status at baseline, with effects growing over time. Medicaid beneficiaries with schizophrenia experienced less improvement in mental health status under a carve-out arrangement for mental health care compared to what would have happened under traditional Medicaid.     

Market Variations in Intensity of Medicare Service Use and Beneficiary Experiences with Care

Objective

Examine associations between patient experiences with care and service use across markets.

Data Sources/Study Setting

Medicare fee-for-service (FFS) and managed care (Medicare Advantage [MA]) beneficiaries in 306 markets from the 2003 Consumer Assessments of Healthcare Providers and Systems (CAHPS) surveys. Resource use intensity is measured by the 2003 end-of-life expenditure index.

Study Design

We estimated correlations and linear regressions of eight measures of case-mix-adjusted beneficiary experiences with intensity of service use across markets.

Data Collection/Extraction

We merged CAHPS data with service use data, excluding beneficiaries under 65 years of age or receiving Medicaid.

Principal Findings

Overall, higher intensity use was associated (p<.05) with worse (seven measures) or no better care experiences (two measures). In higher-intensity markets, Medicare FFS and MA beneficiaries reported more problems getting care quickly and less helpful office staff. However, Medicare FFS beneficiaries in higher-intensity markets reported higher overall ratings of their personal physician and main specialist. Medicare MA beneficiaries in higher-intensity markets also reported worse quality of communication with physicians, ability to get needed care, and overall ratings of care.

Conclusions

Medicare beneficiaries in markets characterized by high service use did not report better experiences with care. This trend was strongest for those in managed care.     

Favorable selection in the Medicare+Choice program: new evidence

Historically, studying the Medicare managed care favorable-selection issue has been difficult because direct data on managed care enrollees have been unavailable. In this study, we analyzed the first year of Balanced Budget Act (BBA)-mandated inpatient encounter data. Based on this comparison of actual managed care and fee-for-service (FFS) beneficiaries, it appears that there are significant differences between these populations. The most striking differences are found in the comparison of average risk factors, indicating a clear bias in the managed care populations toward beneficiaries predicted to be less costly.