A recent study found that in areas with a higher percentage of people enrolled in Medicare Advantage (MA) plans, traditional Medicare beneficiaries use less post-acute care services.
Additionally, those areas did not see an increase in hospital readmissions, despite the drop in post-acute care services.
The study also found that hospital readmissions were lower in areas with a higher number of Accountable Care Organizations (ACOs).
“Our study revealed that a higher share of ACOs can actually magnify the effects of Medicare Advantage,” Fangli Geng, the study’s lead author and a PhD candidate in the program of health policy at Harvard University, told Home Health Care News. “We thought this was a really interesting finding that highlights the potential benefits of ACOs in relation with Medicare Advantage plans.”
The goal of the study was to shed light on the effect of MA expenses on traditional Medicare beneficiaries and to provide insights into how policymakers can improve post-acute care delivery for the Medicare population, Geng said.
These results are also relevant for home-based care providers.
If a provider is willing to accept more MA business, it could also lead to more traditional Medicare business down the line as hospitals gain trust in referring to that provider.
MA plans also have the chance to shape post-acute care markets through health care investments, or by signing contracts with post-acute care providers with cost-containing clauses.
For example, if MA incentivizes more home health care, it could lead to a rise in the number of – and utilization of – home health agencies in the local market, Geng said.
One of the main takeaways for home health and home care providers is the need to adapt to hospital discharge planning patterns.
“Providers need to adapt to these changes as MA contracts become more popular in different marketplaces,” Geng said. “We found that even though MA expansion was associated with a reduction in post-acute care use for traditional Medicare patients, it did not significantly impact the payment amounts. We think that this change we observed was likely due to the change in hospital discharge planning practice, rather than the change in the actual practice of those post-acute care providers.”
This, the study’s authors hypothesized, could be due to hospitals with a large proportion of MA patients using similar rates of post-acute care for all of their patients regardless of their insurance type.
One figure that did stand out to Geng was a slight increase in the all-cause 30-day mortality rate for patients who suffered from a stroke as MA penetration increased in the market.
Looking ahead, Geng and her colleagues suggest that policymakers should consider the effect of MA plans on traditional Medicare when evaluating potential cost savings in alternative payment models.
“At the system level, there may be gains from encouraging MA penetration in terms of lower post-acute care use and spending,” the authors wrote. “Although our results do not speak to the adequacy of existing MA payment rates, they do suggest that observed spillovers may help offset a small percentage of the historical overpayments to MA plans relative to traditional Medicare spending.”
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