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Favorable selection in the Medicare+Choice program: new evidence
L M Greenwald1, J M Levy, M J Ingber
1Office of Strategic Planning, Health Care Financing Administration, Baltimore 21244, MD, USA. lgreenwald@hcfa.gov
Abstract:
Historically, studying the Medicare managed care favorable-selection issue has been difficult because direct data on managed care enrollees have been unavailable. In this study, we analyzed the first year of Balanced Budget Act (BBA)-mandated inpatient encounter data. Based on this comparison of actual managed care and fee-for-service (FFS) beneficiaries, it appears that there are significant differences between these populations. The most striking differences are found in the comparison of average risk factors, indicating a clear bias in the managed care populations toward beneficiaries predicted to be less costly.
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