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KFF Finds Spending Higher When MA Enrollees Return To Traditional Medicare

A new analysis from Kaiser Family Foundation (KFF) finds higher Medicare spending among those who switch from Medicare Advantage (MA) to traditional Medicare as compared with similar beneficiaries who were in traditional Medicare all along.

KFF says Medicare spent an average of 27% more on those switching in, after adjusting for differences in health status and other characteristics. This amounts to a difference of $2,585 in Medicare spending per person, on average, between the two groups in 2022.

The difference in spending among people with certain health conditions varied from 15% for those with pneumonia to 34% for people with diabetes.

The causes for the higher spending are as follows: skilled nursing facility spending (34%), outpatient hospital spending (23%), and inpatient hospital spending (20%).

Differences in spending were greater for people of color and dual eligibles and increased with age.

KFF asks several questions on the reasons why spending is higher:

• Were switchers unable to get the medical care they felt they needed while enrolled in MA?
• Would more MA enrollees make the switch if people with pre-existing conditions did not face barriers to purchasing Medicare supplemental insurance?
• Do the disenrollments reduce costs and increase profits for MA plans?
• Does the current MA payment system adequately account for adverse selection into traditional Medicare?

KFF notes that previous KFF and MedPAC, the congressional policy arm, analyses found that people who enroll in MA have lower Medicare spending in the years before they enroll than similar people who remain in traditional Medicare, even after controlling for health status.

I don’t discount that some of the increased costs could come from higher needs of individuals and the potential to receive the care they think they need. But I would also argue that KFF has not covered the fact that MA is more efficient and seems to assume that all the increased spending is in the traditional program is absolutely justified.

Utilization management in MA is not a bad thing. As an example, the highest increased cost area is skilled nursing facility (SNF) care post acute stays. But there is every reason to believe that providers in traditional Medicare are doling out orders for SNF stays without really determining if lower costs of care could serve members just as well. The same holds true for even more expensive inpatient stays.

MA plans’ rate of inpatient (IP) stays and SNF stays has been markedly less. With a 2024 prior authorization change, MA IP and SNF stay costs will likely increase over time as the Centers for Medicare and Medicaid Services (CMS) have told MA plans to abide by the traditional program rules.

In essence, they took the managed care out of managed care. While KFF is largley balanced, it shows some of its anti-MA and big healthcare bias here. This is sure to be used on Capitol Hill and the industry has to be ready to push back.

Press release: https://www.kff.org/medicare/press-release/medicare-spent-an-average-of-27-more-on-people-who-switched-from-medicare-advantage-to-traditional-medicare-compared-to-those-who-were-only-in-traditional-medicare/

#kff #medicareadvantage #medicare #priorauthorization #coverage

https://www.kff.org/medicare/issue-brief/medicare-spending-was-27-percent-more-for-people-who-disenrolled-from-medicare-advantage-than-for-similar-people-in-traditional-medicare/

Primary Care Market To Shift by 2023

A Bain & Company study on primary care suggests non-traditional providers, including retailers, payers, and advanced primary care providers, are expected to capture 30% of the U.S. primary care market by 2030. Bain says payers will continue to invest in primary care and population-focused models and will capture 20% of the market. How retailers will fare is more of a question. Bain also says providers will pivot to and grow their value-based care focus.

#primarycare #healthplans #insurers #providers

https://www.fiercehealthcare.com/providers/primary-care-market-will-see-major-shifts-2030-payers-nontraditional-providers-gain

Tragedy In New York

A tragedy in New York today as UnitedHealthcare CEO Brian Thompson, the leader of UnitedHealth Group’s insurance subsidiary, was shot and killed just before an investor meeting in Manhattan. All indications point to the fact that the shooting was premediated and targeted and not a random act. Our thoughts and prayers are with Thompson’s family and the UnitedHealth community.

Additional articles: https://www.modernhealthcare.com/people/unitedhealthcare-ceo-brian-thompson-shot-new-york-city and https://www.healthcaredive.com/news/unitedhealthcare-ceo-brian-thompson-fatally-shot-nyc/734557/

(Some articles may require a subscription.)

#unitedhealthcare

https://www.fiercehealthcare.com/payers/reports-unitedhealthcare-ceo-brian-thompson-fatally-shot-manhattan

Government Spending Bill Needed In Next Two Weeks

With the government running out of money as of December 20, Congress is back for a lame-duck session and needs to pass a permanent funding bill or stop-gap continuing resolution (CR) soon. The latest guess is that the parties will come together in each chamber to pass a stop-gap CR and boot major funding and policy decisions until the next Congress. But that certainly puts Democrats at a disadvantage as they become the minority in both chambers. But the sheer work to get a permanent bill passed is likely just too much right now for anyone.

There is wide speculation on what will happen with various healthcare policy proposals. Many hope for a great deal of healthcare bills to be rolled up into an end-of-year act. But that hope is dying given all that needs to be done.

More likely are some carefully crafted healthcare fixes to get into the new year. Top among them are rolling back the Medicare physician rate cut.  It could be partially or fully rolled back. There is the possibility that it could turn into some hike right now. Certain programs face expiration and could be extended for some time, including telehealth and hospital-at-home. Community health centers are looking for an increase due to major patient load, but it is unclear if that will happen.

Some argue that payfors like site-neutral payments and pharmacy benefit manager (PBM) reform could be included in an end-of-year bill. These would likely face major opposition from lobbyists, but PBM reform could provide savings for some increases.

Look for a three-month CR and a narrow healthcare package.

(Article may require a subscription.)

#crs #governmentshutdown #congress

https://insidehealthpolicy.com/health-insider/congress-returns-scrambling-determine-lame-duck-endgame