Are Medicare Managed Plans Steering Members to Low-Quality Nursing Facilities?

Feb 9, 2018 / Amanda Chase, Horsesmouth Assistant Editor

Last year, about 19 million Americans, one-third of Medicare participants, were enrolled in MA plans. This model holds the promise of fully integrating health care and long-term services and supports—a great benefit for frail older adults. But critics worry that when managed care organizations are at financial risk for the cost of care, they may skimp on quality to save money.

A new study in the journal Health Affairs suggests that fear may be well-founded when it comes to skilled nursing care. The research concludes that seniors in traditional fee-for-service Medicare are more likely to be admitted to high-quality nursing facilities than MA enrollees. And they found that members of lower-quality MA plans were the most likely to receive care in the poorest-quality skilled nursing facilities (SNFs).

Many MA plans rely heavily on so-called narrow networks of providers, such as doctors, hospitals, and nursing facilities. Ideally, those networks should be based on value—a combination of quality and price. But there is some evidence that plans may focus primarily on cost. In effect, they send their members to those providers with which they can negotiate the best price. Quality of care is much less important.

Members of low-quality MA plans were admitted to SNFs with significantly higher hospitalization rates than those in higher-quality managed care plans or seniors in traditional Medicare. But the paper did not look at whether those Medicare Advantage patients themselves were hospitalized more frequently than similar patients in traditional Medicare.

You can find the full Forbes Personal Finance article here.


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