A new study on Medicare Advantage has found that the program’s lower use of post-acute care has a “spillover” effect when it comes to traditional Medicare plans.
The research examined Medicare Advantage market penetration and the impact it has on how post-acute care is managed for both Medicare Advantage and traditional Medicare beneficiaries. Since Medicare Advantage incentivizes services that improve the quality of care and outcomes, it can influence both hospital discharge patterns and healthcare investments, study authors noted.
The study, published Monday in Health Affairs, confirmed that a reduction in post-acute care use did not have an adverse impact on traditional Medicare patients’ short-term outcomes.
Researchers from Brown and Harvard universities examined data for both traditional Medicare and Medicare Advantage beneficiaries from 2013 to 2018 who suffered congestive heart failure, hip fracture or a stroke — the three most common conditions associated with post-acute care. They focused on care initiated within a week after discharge from a hospital, total post-acute care spending, 30-day hospital readmissions for any reason, and 30-day mortality due to any cause.
Greater MA penetration was associated with a larger reduction in use of post-acute care for patients hospitalized for stroke and CHF compared with hip fracture.
“This may be because rehabilitation of patients with hip fracture typically requires immediate and more intensive care delivered in institutional settings,” the researchers reported, noting that more than 80% of those cases were still discharged to a skilled nursing facility or inpatient rehabilitation facility.
The data indicated that greater market shares of Medicare Advantage and traditional Medicare ACOs resulted in better post-acute care for traditional Medicare beneficiaries, study authors said.
“It’s important to consider both direct effects on MA spending and indirect effects for [traditional Medicare], as well as potential financial losses for post-acute care providers in areas of high MA penetration. It’s also important for policymakers to consider how their decisions might impact Medicare beneficiaries’ access to post-acute care,” lead author Fangli Geng, a PhD candidate in the Program of Health Policy at Harvard University, told McKnights Long-Term Care News on Monday.
“Ultimately, we hope our research can help policymakers make more informed decisions when it comes to evaluating potential savings in alternative payment models within traditional Medicare,” Geng added.
One key takeaway for policymakers: Large-scale reductions in post-acute care use could lead to financial losses for skilled nursing facilities in areas of high MA penetration.
“If this increased penetration leads to downstream facility closures, it will become important to monitor access to post-acute care providers in areas with high MA penetration,” the study concluded.
In 2022, 48% of eligible beneficiaries were enrolled in Medicare Advantage plans, which can pay out bonuses to providers with higher quality ratings. That incentivizes reducing waste and improving efficiency, the study noted. The year prior, 15% of total Medicare program spending was on post-acute care, making it a target area for savings, the researchers said.
The researchers also looked specifically at the role accountable care organizations (ACOs) played.
“We found that having more ACOs in an area actually strengthens the impact of Medicare Advantage plans on post-acute care use among traditional Medicare patients,” Geng said. “This could be because a greater ACO share may cause hospital discharge planners to be more receptive to shifting discharge settings in the context of [Medicare Advantage] penetration, thereby potentially magnifying the spillover effect.”
Other researchers on the study were Derek Lake, Brown University; David J. Meyers, PhD, Brown University; Linda J. Resnik, PhD, Brown University; Joan M. Teno, MD, Brown University; Pedro Gozalo, PhD, Brown University and Providence Veterans Affairs Medical Center in Providence, RI; and David C. Grabowski, PhD, Harvard University.
