Medicare Advantage plans — which currently face significant regulatory scrutiny for inflating healthcare costs and denying seniors’ care — are driving better outcomes for their beneficiaries than traditional Medicare, a new study suggests.
Researchers from health data company Inovalon and Harvard Medical School compared outcomes data for beneficiaries in MA and original Medicare, and found MA members had fewer hospital readmissions, fewer preventable hospitalizations and lower rates of high-risk medication use.
In MA, the government contracts with private payers to manage the care of Medicare seniors. Multiple studies have found enrollment in MA is associated with lower healthcare utilization, including for post-acute care.
However, past research has generally found a more modest association than the new analysis.
The Harvard and Inovalon researchers argued prior studies have often been “restricted to narrow sets of quality measures and limited sample populations.”
They said their study instead evaluates a broad set of measures for a nationally representative group — and adjusts for underlying population differences between traditional Medicare and MA, which is more likely to include socioeconomically disadvanted people.
“Previous comparisons of quality under MA vs. [fee-for-service Medicare] may have underestimated outcomes in MA by not fully accounting for the greater socioeconomic disadvantages faced by MA members,” the researchers wrote.
Enrollment in MA has increased dramatically to more than 30 million people — over half of all Medicare beneficiaries. Nearly six in 10 beneficiaries are expected to be MA members by 2030.
The plans are popular in part because they can offer more supplemental benefits than traditional Medicare, like dental and hearing services, or subsidized transportation and gym memberships.
Yet as MA grows, there is a debate raging in the health policy world over the future of the program, which is increasingly weighing on Medicare’s financial solvency.
Spending on MA has snowballed: Plans were overpaid almost $10 billion a year from 2017 to 2020, according to one study. Another piece of research estimates the U.S. could be on the hook for $75 billion in overpayments this year.
Critics blame factors like insurers upcoding the disease severity of their members and inflated bonus payments in quality programs.
Proponents of MA point to research, like the new study, finding that plans result in better health outcomes than traditional Medicare. For their analysis, Harvard and Inovalon researchers analyzed beneficiary data in the year after seniors joined either traditional Medicare or MA, and controlled for patient characteristics.
They found seniors in traditional Medicare had a 3.8 times higher rate of readmission to the hospital after 30 days than seniors in MA. Traditional Medicare had a 1.7 times higher rate of avoidable hospitalization overall. Rates of high-risk medication usage were 1.4 times higher in traditional Medicare.
MA and traditional Medicare had similar rates of medication adherence.
The researchers said the results boost findings from their earlier report that found MA had lower overall utilization than traditional Medicare, and that lower utilization was driven by fewer inpatient visits.
Other health policy researchers say lower utilization in MA raises red flags, due to health plans curbing medical costs by delaying or denying needed healthcare. Such care restrictions could be contributing to MA beneficiaries with greater health needs disenrolling at higher rates than healthier seniors.
The Harvard and Inovalon researchers argued their findings suggest the reduction in inpatient visits comes from reduced preventable and readmission visits. That would mean lower MA utilization is due to improved care quality, rather than care rationing on the part of plans.
Lawmakers on the Hill have grown increasingly skeptical of MA payment denials. During a May hearing of the Senate Permanent Subcommittee on Investigations, senators expressed bipartisan support for paring back the use of prior authorizations to restrict care, especially payers’ use of algorithms in coverage determinations. Government watchdogs found last year that 18% of MA payment denials should have been approved under Medicare coverage rules.
Earlier this year, the Biden administration finalized a rule reiterating that MA plans are required to comply with coverage rules in traditional Medicare. Top CMS officials have also promised the agency will get tougher in regulating bad actors in MA.
