Do Medicare Beneficiaries Under Accountable Care or Medicare Advantage Use Lower Quality Nursing Homes?

With the growing number of Medicare beneficiaries attributed to Accountable Care Organizations (ACO) or enrolled in Medicare Advantage (MA) and their financial incentives to lower the cost of the cared patients, it is essential to understand how these alternative payment models affect post-acute outcomes among beneficiaries, with or without dementia diagnoses. In this study, we examined the quality of skilled nursing facilities (SNFs) that beneficiaries entered after hospital discharge under different payment models.

Medicare beneficiaries who were discharged from hospitals and admitted to SNFs between 2013 and 2018.

The exposure variable was a payment indicator, including ACO, MA, or non-ACO traditional Medicare (TM) fee-for-service. The dependent variable was high overall quality SNF, defined as with at least 4-star rating in the CMS Nursing Home Care Compare.

We examined the payer distribution by dementia diagnosis using ZIP Code Tabulation Areas (ZCTAs) fixed effects and adjusted for age, gender, and race. We also estimated the probabilities of entering high-quality SNF as a function of payer status and dementia diagnosis each year using hospital and ZCTA fixed effects and accounting for beneficiary-level covariates.

Among SNF admissions from 2013 to 2018, the share of ACO-attributed beneficiaries increased from 7.6% to 20.2%, MA enrollees increased from 25.2% to 32.8%, and non-ACO-attributed TM enrollees decreased from 67.2% to 47.3%. Consistently, ACO-attributed beneficiaries were the most likely, while MA enrollees were the least likely to enter high-quality SNFs, regardless of dementia diagnosis.

Our findings highlight significant differences in access to high-quality SNFs across Medicare payment models, with ACO-attributed beneficiaries consistently experiencing better access than their MA or traditional Medicare counterparts, regardless of dementia diagnosis. These results underscore the need for further investigation into how payment models influence care quality and access, particularly for vulnerable populations.