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Medicare Advantage Control of Post-Acute Costs: Perspectives from Plans, Hospitals, and Skilled Nursing Facilities

2018 Conference Presentation

Care integration United States

12 September 2018

Medicare Advantage Control of Post-Acute Costs: Perspectives from Plans, Hospitals, and Skilled Nursing Facilities

Emily Gadbois, Brown University, United States

Denise Tyler, RTI International, United States
Renee Shield, Brown University, United States
John McHugh, Columbia University, United States
Ulrika Winblad, Uppsala University, United States
Amal Trivedi, Brown University, United States
Vincent Mor, Brown University, United States


Objectives: Medicare Advantage (MA) offers Medicare beneficiaries the option of receiving benefits through private health insurance plans. Because MA plans receive capitated, per beneficiary payments in exchange for bearing the risk of providing Medicare-covered services, plans have strong incentives to control costs, including post-acute spending. To our knowledge no research has qualitatively examined the methods that MA plans use to control or reduce post-acute spending. The present study aimed to understand such MA efforts and their impact, including possible unintended consequences.

Methods: A multiple case study method was conducted. Qualitative interviews were conducted with 154 staff from 10 MA plans, 16 hospitals, and 25 nursing facilities in eight geographically diverse markets across the United States. Interview participants included Chief Medical Officers and care managers at each MA plan, VPs of Strategy, Chief Medical Officers, discharge planners, and hospitalists at each hospital, and administrators, directors of nursing, and admissions coordinators at each nursing facility.

Results: Interview participants discussed how MA plans attempted to reduce post-acute care (PAC) spending by controlling the PAC destination and length of stay. Plans typically controlled PAC destination by narrowing networks, e.g., providing patients with a restricted list of facilities in which their care would be covered. To influence length of stay, MA plans most commonly authorized patient stays in nursing facilities for a certain number of days and required that nursing facilities adhere to this limitation; however, they did not provide guidance or assistance in ensuring that the length of stay goals were met. Hospital and nursing facility responses to the largely authorization-based system were frequently negative, and participants expressed concerns about potential unintended consequences primarily on patient quality of care.

Conclusions: In their interactions with hospitals and nursing facilities, MA plans have the power to control patient flow. However, exerting too much control over hospitals and nursing facilities, as these results seem to indicate, can have the negative consequence of delays in hospital discharge and nursing facilities avoiding burdensome plans.