More money is wasted in caring for beneficiaries in traditional Medicare than in Medicare Advantage (MA) plans, according to a study that examined data from nearly 2.5 million Humana members.
Researchers concluded that “MA beneficiaries received fewer low-value services than [traditional Medicare] beneficiaries, especially among MA beneficiaries enrolled in HMO products and those attributed to primary care organizations reimbursed within advanced value-based payment models.” MA enrollees received 9.2% fewer low-value care services than those enrolled in traditional Medicare.
Low-value services include tests, treatments and procedures that only marginally improve outcomes or don’t improve them at all. The authors note that despite much attention and effort over the years to make Medicare more efficient, nothing much seems to have changed.
“Low-value care in the Medicare program is prevalent, costly, potentially harmful, and persistent,” the authors note. They wanted to find out whether the flexibility inherent in MA regarding what sort of plans can be offered—e.g., preferred provider organizations (PPOs) and health maintenance organizations (HMOs)—can account for this difference.
It seems to, the researchers found.
“The study results suggest that low-value care is less common in MA than traditional Medicare, with elements of insurance design present in MA associated with fewer low-value services,” the study states.
Included in the study were 1,527,763 MA enrollees and 942,436 enrollees in traditional Medicare. The study period was Jan. 1, 2017, through Dec. 31, 2019, and researchers analyzed the data from July 2021 to March 2022.
Integrating value-based payment models into traditional Medicare could possibly do a lot to mitigate the use of low-value care, a strategy recently touted by the Centers for Medicare & Medicaid Services (CMS).
“When stratifying the MA population by product type (HMO or PPO), we found that both groups of beneficiaries received fewer low-value services than [traditional Medicare] beneficiaries, but that the difference was larger for beneficiaries enrolled in HMO products and largest among specialist driven services,” the study states. “Together, these findings suggest that elements of HMO product design, such as an increased incentive to seek in-network care and an accountable primary care relationship, moderate the association between MA enrollment and low-value care.”
CMS’ Center for Medicare and Medicaid Innovation published a white paper in October 2021 in which the agency outlined plans to move Medicare beneficiaries into a system in which providers are held accountable for quality and the total cost of care by 2030.
The white paper said that for providers, this means: "Transformation supports, such as data-sharing, learning opportunities, and regulatory flexibilities, as well as varying levels of options to assume risk will be available for primary care practices to transition to population-based payments and to sustain accountable care relationships.”
Medicare beneficiaries should also perhaps have the opportunity to enroll in preferred networks, the authors argue.
“Outside of the [traditional Medicare] program, where MA, Medicaid, and commercial plans have more flexibility to experiment with approaches to insurance design, there is an opportunity to refine and test how to optimize network design, product design, utilization management, value-based payment, and other elements of insurance design to reduce the prevalence of low-value care,” the study states.