High Quality Hospitals Treat Less Medicare Advantage Enrollees

Medicare Advantage enrollees had a 2.8 percentage point lower probability of being admitted to a highly rated hospital compared to traditional Medicare enrollees, according to a report from Brown University School of Public Health.

Published in JAMA Network Open on January 15, the cross-sectional study of 12,190,280 hospitalizations in the US from 2012 to 2016 showed that there were notable differences in the quality of hospitals MA patients were admitted to, which suggested that Medicare Advantage contracts may be steering their patients toward specific hospitals. 

Using Medicare Provider and Analysis Review (MedPAR) claims, researchers assessed trends in hospital entrance over time. The main portion of the study focused on 2016 data. 

The data showed that Medicare Advantage enrollees were more likely to be treated at an average ranking hospital according to the 5-star rating system used by CMS. The enrollees had a 5.5 percentage point higher probability of being admitted to one of these average hospitals compared to their traditional Medicare counterparts. 

However, Medicare Advantage enrollees were also less likely to be admitted to a low-quality hospital. The report showed that the enrollees were 2.6 percentage points less likely to be admitted to a 1 or 2-star hospital.

The difference in hospital quality was also observable when researchers accounted for zip code of enrollees in the study.

Patients who lived close to a hospital with a rating of fewer than 3 stars, 3 stars, or 4 or 5 stars were likely to be admitted to that specific hospital. But MA patients were less often admitted to a 3-star hospital, and less often admitted to hospitals rated 4 or 5 stars than traditional Medicare patients who lived within the same zip code. 

Researchers also found that enrollees in highly rated Medicare Advantage plans has the strongest association with hospital quality, with enrollees in these plans being significantly less likely to be admitted to lower-quality hospitals versus enrollees in low-rated plans.

However, they did not find a “consistent association between plan premiums and the quality of networks, indicating that enrollees may not be paying higher premiums in return for higher-quality networks.”

The researchers emphasized that enrollment in higher rated MA plans, plans that have national presence, plans with high concentrations in a local market, and non-HMO plans all had lower probabilities of admission to lower rated hospitals and a better chance of admission to higher rated hospitals. 

Medicare Advantage plans may avoid contracting with higher quality hospitals altogether if they demand higher reimbursement rates, which would exclude them from the network completely, researchers hypothesized. But if lower quality hospitals have higher rehospitalization rates, MA plans may avoid them due to their higher costs. 

But the report found no noticeable difference in the use of higher quality hospitals between traditional Medicare and MA enrollees in rural areas, which suggest that there is limited ability of MA plans to selectively contract with hospitals and to steer enrollees towards network hospitals. 

“With its continued growth, MA has become a vital component of the healthcare system. The study found differences in the quality of hospitals admitting MA patients compared with TM patients, suggesting that policy makers should monitor the quality of hospitals available in MA plans’ network and make this information available to enrollees,” the report concluded. 

Although many believe that Medicare Advantage is slated to be the future for value-based care, enrollees may not actually be receiving the best quality care possible. 

A 2018 study by researchers at Brown University found that enrollees who require a skilled nursing facility may not have a high quality option. In fact, traditional Medicare enrollees were more likely to enter higher-quality skilled nursing facilities than MA enrollees. 

Across most zip codes, researchers found that traditional Medicare beneficiaries were admitted to facilities that were rated substantially higher on a 5-star government rating system. 

Nearly 55 percent of traditional Medicare patients went into a skilled nursing home that was ranked 4 or 5 stars versus 50 percent of lower quality MA enrollees and 52 percent of higher quality MA patients, researchers found. 

Because Medicare Advantage plans tend to cost more, patients believe this means higher quality care. But Meyers explained that this isn’t the case. 

“It seems like these fewer choices Medicare Advantage plans offer might not be as high quality,” Meyers said. He concluded by explaining that the moment that MA patients experience a health crisis that requires quality, expensive care, they will begin to switch to traditional Medicare.