Higher Medicare Advantage rates didn't always lead to better quality, RAND study finds

Seniors choosing a higher-cost Medicare Advantage (MA) plan may not necessarily get better healthcare quality, a new study from the RAND Corporation finds. 

The study, released Monday in the Journal of the American Medical Association, comes as the MA program has grown in popularity and makes up nearly half of total Medicare enrollment.

“Paying higher premiums is not necessary to receive high-quality care from a MA plan,” said Amelia Haviland, the lead study author, in a statement. “Seniors should look at metrics other than premium costs alone when looking for a MA plan that offers a high quality of care, including direct measures of quality such as Star Ratings.”

RAND analyzed more than 700 MA plans and found that roughly 40% of MA enrollees were in a plan with no premium and 6% were in plans that had a monthly premium of more than $120. 

The study’s researchers also surveyed more than 168,000 plan participants about their experiences with their plans and drug coverage.

Researchers looked at patient experience scores across the participants. RAND found that there was little variation among patient scores based on the premiums that plans offered. 

For instance, a plan that had a $60 to $120 monthly premium had a 1.4-point increase in patient experience scores compared with a zero-dollar premium plan. However, a plan that had more than $120 in monthly premiums had only a 2.2-point increase in their experience scores compared to a zero-cost plan. 

There was some variation in the amount of care that people received based on the premium. 

“For example, people enrolled in the highest premium tiers were more likely to receive annual flu shots,” a release on the study said.

But lower-tiered premium plans offered better care on average for osteoporosis compared to higher-cost plans, the release added.

The findings show that premiums may not be the biggest indicator of plan quality, RAND said. 

“Making plan quality information more accessible and salient to consumers remains key to reducing cost while improving quality,” the study said. 

MA has grown in popularity, with a new study estimating enrollment makes up nearly half of the total Medicare population.

As more and more insurers have entered the lucrative market, scrutiny of key parts of the program has also ramped up.

MA is facing a new congressional probe over aggressive marketing practices to steer seniors toward certain plans, and a federal watchdog has scrutinized MA plans’ process for denying prior authorization claims that meet Medicare coverage requirements. 

The Medicare Payment Advisory Commission (MedPAC), a congressional advisory board, has also raised questions about risk adjustment tactics employed by plans. MedPAC has reported findings that some plans have used chart reviews and health risk assessments to add unnecessary diagnoses for patients to inflate risk scores and get higher bonus payments.

MA advocates such as the Better Medicare Alliance have responded that the program remains very popular among seniors and that beneficiaries have high satisfaction rates for their plans.