Mandated Copayment Reductions in Medicare Advantage: Effects on Skilled Nursing Care, Hospitalizations, and Plan Exit

To address concerns that postacute cost-sharing may deter high-need beneficiaries from participating in Medicare Advantage (MA) plans, the Centers for Medicare and Medicaid Services have capped cost-sharing for skilled nursing facility (SNF) services in MA plans since 2011. This study examines whether SNF use, inpatient use, and plan disenrollment changed following stricter regulations in 2015 that required most MA plans to eliminate or substantially reduce cost-sharing for SNF care.

Difference-in-differences retrospective analysis from 2013 to 2016.

MA plans.

Thirty-one million MA members in 320 plans with mandatory cost-sharing reductions and 261 plans without such reductions.

Mean monthly number of SNF admissions, SNF days, hospitalizations, and plan disenrollees per 1000 members.

Mean total cost-sharing for the first 20 days of SNF services decreased from $911 to $104 in affected plans. Relative to concurrent changes in plans without mandated cost-sharing reductions, plans with mandatory cost-sharing reductions experienced no significant differences in the number of SNF days per 1000 members (adjusted between-group difference: 0.4 days per 1000 members [95% confidence interval (95% CI), -5.2 to 6.0, P=0.89], small decreases in the number of hospitalizations per 1000 members [adjusted between-group difference: 0.6 admissions per 1000 members (95% CI, -1.0 to -0.1; P=0.03)], and small decreases in the number of SNF users who disenrolled at year-end [adjusted between-group difference: -16.8 disenrollees per 1000 members (95% CI, -31.9 to -1.8; P=0.03)].

Mandated reductions in SNF cost-sharing may have curbed selective disenrollment from MA plans without significantly increasing use of SNF services.