What does voluntary disenrollment from Medicare+Choice plans mean to beneficiaries?

The Balanced Budget Act (BBA) of 1997 required CMS to report publicly Medicare managed care (MMC) plan voluntary disenrollment rates. To ensure disenrollment rates would be meaningful to beneficiaries in health plan choice, CMS funded the development of surveys and reporting formats to identify and present the reasons that beneficiaries voluntarily leave plans. Public reporting of reasons on the Medicare Web site began in 2002. We discuss results from extensive audience testing of disenrollment rates and reasons materials. Medicare beneficiaries do not easily understand disenrollment. We also discuss challenges in presenting useful disenrollment information and policy implications for public reporting.     

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.     

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.     

Consumer perspectives on information needs for health plan choice

The premise that competition will improve health care assumes that consumers will choose plans that best fit their needs and resources. However, many consumers are frustrated with currently available plan comparison information. We describe results from 22 focus groups in which Medicare beneficiaries, Medicaid enrollees, and privately insured consumers assessed the usefulness of indicators based on consumer survey data and Health Employer Data Information Set (HEDIS)-type measures of quality of care. Considerable education would be required before consumers could interpret report card data to inform plan choices. Policy implications for design and provision of plan information for Medicare beneficiaries and Medicaid enrollees are discussed.     

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.     

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 Effect of Health Plan Characteristics on Medicare+Choice Enrollment

Objective. To provide national estimates of the effect of out-of-pocket premiums and benefits on Medicare beneficiaries' choice among managed care health plans.
Data Sources/Study Setting. The data represent the population of all Medicare+Choice (M+C) plans offered to Medicare beneficiaries in the United States in 1999.
Study Design. The dependent variable is the log of the ratio of the market share of the j th health plan to the lowest cost plan in the beneficiary's county of residence. The explanatory variables are measures of premiums and benefits in the j th health plan relative to the premiums and benefits in the lowest cost plan.
Data Collection Methods. The data are from the 1999 Medicare Compare database, and M+C enrollment data from the Centers for Medicare and Medicaid Services (CMS).
Principal Findings. A $10 increase in an M+C plan's out-of-pocket premium, relative to its competitors, is associated with a decrease of four percentage points in the j th plan's market share (i.e., from 25 to 21 percent), holding the premiums of competing plans constant.
Conclusions. Although our price elasticity estimates are low, the market share losses associated with small changes in a health plan's premium, relative to its competitors, may be sufficient to discipline premiums in a competitive market. Bidding behavior by plans in the Medicare Competitive Pricing Demonstration supports this conclusion.     

Medicare Advantage Chronic Special Needs Plan boosted primary care, reduced hospital use among diabetes patients

The Affordable Care Act of 2010 authorized the continued availability of Medicare Advantage Chronic Condition Special Needs Plans (C-SNPs). This case study examines the model of care used by the largest such plan, Care Improvement Plus, and compares utilization rates among its diabetes patients with those of other beneficiaries enrolled in fee-for-service Medicare in the same five states. This special-needs plan emphasizes direct contacts with patients to help identify gaps in care and promote primary and preventive health care. The comparative analysis indicates that people with diabetes in the special-needs plan-particularly nonwhite beneficiaries-had lower rates of hospitalization and readmission than their peers in fee-for-service Medicare. For example, risk-adjusted hospital days per enrollee among special-needs plan participants were 19 percent lower than for fee-for-service Medicare enrollees (27 percent lower for nonwhite enrollees). Risk-adjusted physician office visits were 7 percent higher among C-SNP enrollees than among comparable fee-for-service enrollees (26 percent higher for nonwhite enrollees). Although this study does not include a cost analysis, we believe that savings from reduced hospitalizations are likely to more than offset the additional costs of enhanced primary care programs. Our study suggests that the Centers for Medicare and Medicaid Services may be able to adapt methods used by the C-SNP program to improve care and outcomes for beneficiaries with a broad range of chronic diseases.     

Reporting of CAHPS quality information to medicare beneficiaries

OBJECTIVES: To assess which Consumer Assessment of Health Plans (CAHPS) survey measures Medicare beneficiaries find the most meaningful, how beneficiaries and information intermediaries interpret different formats for presenting CAHPS information, and how beneficiaries have reacted to the CAHPS information included in the annual mailing to beneficiaries called Medicare & You 2000. DATA SOURCES: Fourteen focus groups of beneficiaries and State Health Insurance Assistance Program counselors, more than 200 cognitive interviews, and 122 mall-intercept interviews with beneficiaries were conducted from spring 1998 through winter 2000. STUDY DESIGN: In 1998 focus groups and cognitive interviews were conducted with Medicare beneficiaries and State Health Insurance Assistance Program counselors to determine which CAHPS measures to report to Medicare beneficiaries and how to report this information. In 1999 additional focus groups and mall-intercept interviews were conducted to determine which measures to include in Medicare & You 2000. To obtain feedback on the CAHPS information in Medicare & You 2000 additional focus groups were conducted in winter 2000. PRINCIPAL FINDINGS:Focus group participants indicated that getting the care they need quickly, having access to specialists, and communicating well with doctors were more important to them than nonmedical characteristics of plans. Most beneficiaries had problems interpreting quality information. Many misinterpreted star charts, and while bar charts appear easier to read, many beneficiaries still had trouble interpreting the information on these charts. Most beneficiaries did not consider quality information important to them and most were unaware of the availability of CAHPS information. CONCLUSIONS: Many challenges lie ahead in making quality information meaningful to Medicare beneficiaries. These challenges include increasing awareness of the existence of this information, educating beneficiaries about how this information can help in choosing a health plan, continuing to simplify reporting formats, assuring beneficiaries that this information comes from a credible source, and providing guidance to beneficiaries about how quality information can help with health care decisions.     

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.     

Who Switches from Medigap to Medicare HMOs?

OBJECTIVE: To determine the factors affecting whether Medigap owners switch to Medicare managed care plans. DATA SOURCES: The primary data were the 1993-1996 Medicare Current Beneficiary Survey (MCBS) Cost and Use Files. These were supplemented by data available from the Centers for Medicare & Medicaid Services (CMS) website. STUDY DESIGN: Individuals on the MCBS files with Medigap coverage in the period 1993-1996 were included in the study. The person-year was the unit of analysis. We used multivariate logistic regression analysis to determine whether or not a Medigap owner switched to a Medicare-managed care plan during a particular year. Independent variables included measures of affordability, need for services, health insurance benefits, sociodemographics, and supply of managed care plans. PRINCIPAL FINDINGS: We did not detect strong evidence that beneficiaries in poorer health were more likely than others to switch from Medigap coverage to Medicare-managed care. In addition, higher Medigap premiums did not appear to induce beneficiaries to switch into managed care. CONCLUSIONS: We examined selection bias in joining managed care plans among the subset of Medicare beneficiaries who have Medigap policies. No strong evidence of selection bias was found in this population. We conclude that there was no evidence that the Medigap market is becoming prohibitively expensive as a result of unfavorable selection.     

Health care use and expenditures of Medicare HMO disenrollees

We examine the impact of the first wave of Medicare health maintenance organization HMO withdrawals. With data from CMS and United Health Group, we estimate use and expenditure changes between 1998 and 1999 for HMO enrollees who were involuntarily dropped from their plan and returned to fee-for-service (FFS) Medicare using a difference-in-difference model. Compared to those who voluntarily left an HMO, involuntarily disenrolled beneficiaries had higher out-of-pocket expenditures, an 80 percent decrease in physician visits, 38 percent higher emergency room (ER) use and a higher probability of dying. The results suggest beneficiaries face significant costs and reduced health outcomes from unstable Medicare managed care markets.     

Beneficiary selection, use, and charges in two Medicare capitation demonstrations.

Findings with regard to health status, service use, and charges are presented for Medicare beneficiaries who received care under Medicare risk contracts with two health maintenance organizations from 1980 through 1982 and for fee-for-service comparison groups. Health status of plan enrollees and fee-for-service beneficiaries were compared using mortality data, preenrollment claims, and self-reported health measures. Patterns of use and expenditures during preenrollment and postenrollment periods were examined using Medicare records and data supplied by the plans.     

Using Medicare Enrollment Data to Identify Beneficiaries in Assisted Living

ObjectivesDevelop an approach for identifying Medicare beneficiaries residing in US assisted living (AL) communities in calendar year 2018.DesignWe used the following data sources: national directory of licensed ALs, file of US addresses and their associated 9-digit ZIP codes (ZIP+4), Medicare Enrollment Database (EDB), Master Beneficiary Summary File (MBSF), and the Minimum Data Set (MDS).Setting and ParticipantsA total of 412,723 Medicare beneficiaries who lived in ZIP+4 codes associated with an AL were identified as residents. Approximately 28% of the 16,682 ALs in which these beneficiaries resided were smaller communities (<25 beds).MethodsFor each AL, we identified ZIP+4 codes associated with its address. Using this ZIP+4 file, we searched through the Medicare EDB to identify beneficiaries who lived in each ZIP+4 code. The MBSF and MDS were used to exclude beneficiaries who died before 2018 and those whose AL and nursing home stays overlapped. We identified 3 cohorts of Medicare beneficiaries: (1) residents of a specific AL (one AL address per ZIP+4), (2) most likely AL residents, and (3) not likely AL residents. Comparisons across these cohorts were used to examine construct validity of our approach. Additional comparisons were made to AL residents based on the National Survey of Long-Term Care Providers (NSLTCP) and to fee-for-service (FFS) Medicare community-dwelling and long-stay nursing home residents.ResultsThe cohorts of beneficiaries identified as AL residents exhibited good construct validity. AL residents also showed similarity in demographic characteristics to the 2018 sample from the NSLTCP, and as expected were different from FFS community and nursing home beneficiaries.Conclusion and ImplicationsWe developed a methodology for identifying Medicare beneficiaries who reside in ALs. As this residential setting continues to grow, future studies will need effective approaches for identifying AL residents in order to evaluate the quality of care they receive.     

An economic history of Medicare part C

Context: Twenty‐five years ago, private insurance plans were introduced into the Medicare program with the stated dual aims of (1) giving beneficiaries a choice of health insurance plans beyond the fee‐for‐service Medicare program and (2) transferring to the Medicare program the efficiencies and cost savings achieved by managed care in the private sector. Methods: In this article we review the economic history of Medicare Part C, known today as Medicare Advantage, focusing on the impact of major changes in the program's structure and of plan payment methods on trends in the availability of private plans, plan enrollment, and Medicare spending. Additionally, we compare the experience of Medicare Advantage and of employer‐sponsored health insurance with managed care over the same time period. Findings: Beneficiaries’ access to private plans has been inconsistent over the program's history, with higher plan payments resulting in greater choice and enrollment and vice versa. But Medicare Advantage generally has cost more than the traditional Medicare program, an overpayment that has increased in recent years. Conclusions: Major changes in Medicare Advantage's payment rules are needed in order to simultaneously encourage the participation of private plans, the provision of high‐quality care, and to save Medicare money.     

Medicare interim payment system's impact on Medicare home health utilization

The Medicare home health interim payment system (IPS) implemented in fiscal year 1998 provided very strong incentives for home health agencies (HHAs) to reduce the number of visits provided to each Medicare user and to avoid those beneficiaries whose Medicare plan of care was likely to exceed the average beneficiary cost limit. We analyzed multiple years of data from the Medicare Current Beneficiary Survey (MCBS) to examine how the IPS affected subgroups of the Medicare population by health and socioeconomic characteristics. We found that the IPS strongly reduced overall utilization, but that few subgroups were disproportionately affected.