Increased payments to Medicare Advantage plans for dually eligible beneficiaries

To address concerns about payment adequacy in Medicare Advantage (MA) plans, a 2017 federal policy change increased risk scores and associated capitated payments for community-dwelling dually eligible beneficiaries with full Medicaid benefits. This study examined whether this payment change was associated with changes in health care utilization or mortality for dually eligible beneficiaries.

Difference-in-differences analysis comparing dually eligible beneficiaries who qualified for risk score increases (full Medicaid enrollees) vs those who did not (partial Medicaid enrollees).

CMS plan payment files for 2014-2022 provided plan-level information on mean risk scores. We linked 2013-2019 Medicare data and Minimum Data Set nursing home assessments to analyze inpatient use, nursing home use, and mortality for community-dwelling dually eligible beneficiaries. We also investigated hospital readmissions, stays lasting longer than 100 days, and mortality within 365 days among dually eligible beneficiaries with skilled nursing facility (SNF) use.

Among plans in which more than half of members had full Medicaid, plan-level risk scores increased 8.9% from 2014-2016 to 2017-2022 relative to the change observed in other plans. The payment change was associated with small declines in mortality, inpatient use, and nursing home use among beneficiaries 65 years and older, but these findings were not clinically significant or robust in sensitivity analyses. No significant changes were observed for dually eligible beneficiaries younger than 65 years or among SNF users in either age group.

These results raise questions about whether payment increases to MA plans led to meaningful improvements in quality of care for dually eligible members. As MA participation increases among dually eligible beneficiaries, policy makers should pay attention to whether higher MA payment levels for these beneficiaries translate to improved outcomes.