Utilization lower, care quality higher in Medicare Advantage: study

Seniors enrolled in Medicare Advantage (MA) plans use fewer services, while quality performance is on par with or better than traditional Medicare, according to a new study.

Researchers led by a team at Harvard University compared quality and utilization between MA and traditional Medicare in 2010 and again in 2017 and found that MA health management organizations (HMOs) either outperformed or were the same as fee-for-service across seven patient-reported measures in 2017.

Performance was the same or better in HMOs as well as Medicare preferred provider organizations (PPOs) when compared to traditional Medicare in both 2010 and 2017, according to the study.

In addition, the study found that the number of emergency department visits was 30% lower in MA HMOs compared to fee-for-service Medicare, as was the number of back surgeries.

Findings like these are critical for policymakers to consider as they weigh reforms to Medicare Advantage. The program has come under scrutiny for billions in overpayments to insurers as a result of up-coding and other coding-related errors. Risk adjustment and payment policy for MA has been a key focus in the White House and on the Hill.

"As MA enrollment grows, performance differences between MA plans and traditional Medicare gain increasing policy significance," the researchers wrote. "Improved quality is balanced by recognition of substantial overpayments to MA plans as a result of more intensive diagnostic coding among those plans."

"As policy makers consider alternatives to address potential overpayments in Medicare Advantage, they should also consider the evidence that MA plans provide fewer services while also achieving equal or better quality performance relative to traditional Medicare on a broad array of measures," they said.

The study also found that there were 10% fewer hip and knee replacements in MA HMOs compared to traditional Medicare. The differences held for PPOs, too, though by slimmer margins, according to the analysis.

The findings also persisted even as the researchers adjusted data to account for biases that could have been introduced by private insurers' coding practices. In addition, the study findings don't support the idea that people who enroll in MA are more open to coordinated care from an integrated plan, compared to people who choose to stick with fee-for-service Medicare.

"If this explanation were plausible, we might have expected a narrowing of performance differences between Medicare Advantage and traditional Medicare as the pool of beneficiaries with differential care preferences was exhausted," the researchers wrote. "Instead, we observed that, particularly for MA HMOs, differences in clinical quality performance widened over time. These findings suggest that MA plans adopt systems and practices that result in higher clinical quality."