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Medicare Advantage plans that place greater restrictions on home health agency care delivery may have more adverse patient outcomes than plans that provide episodic payments, according to new research examining Medicare Advantage home health reimbursement structures published in The American Journal of Managed Care.
Why Medicare Advantage Home Health Reimbursement Structure Matters
Medicare Advantage plans provide fewer home health services than traditional Medicare, but MA plans vary in how they reimburse home health agencies. Like traditional Medicare, episodic MA plans allow agencies to determine the number and type of visits. Alternatively, per-visit MA plans dictate a specific number of visits and which disciplines provide them. This study examined differences in home health care delivery and patient outcomes among traditional Medicare, episodic MA, and per-visit MA plans.
How Researchers Studied This Question
Researchers used inverse probability of treatment weighting regression across 285,297 home health stays from January 2019 to December 2022, comparing traditional Medicare against each MA plan type and comparing per-visit versus episodic MA plans directly. They examined length of stay; visits from nursing, therapy disciplines, social work, and aides; transfer to an inpatient facility; improvement in self-care and mobility function; and community discharge.
What the Study Found About Care Delivery Differences
Compared with traditional Medicare, both MA plan types had shorter stays and fewer visits from nursing, therapy, and aides, and episodic MA plans had fewer social work visits. Comparing MA plans with each other, per-visit MA had 2.3% shorter stays, 3.0% more physical therapy visits, and 6.8% fewer social work visits versus episodic MA.
Why Per-Visit Plans Showed Higher Transfer Rates
Differences in outcomes between MA and traditional Medicare varied by MA plan type, but compared with traditional Medicare, per-visit MA had a 6% higher likelihood of inpatient transfers. Comparing MA plans directly, per-visit MA had a 12% higher likelihood of inpatient transfers than episodic MA, the study’s most significant finding regarding Medicare Advantage home health reimbursement structure and patient safety.
The Backdrop Behind This Medicare Advantage Home Health Reimbursement Research
MA insurers are incentivized to reduce costs to improve margins, and they frequently employ cost-saving strategies not commonly used by traditional Medicare, such as prior authorization, limited provider networks, cost sharing, and lower payments to providers. Despite these strategies, MA plans remain attractive to enrollees because they offer additional benefits such as vision and dental coverage, often with no additional premium compared with traditional Medicare.
A Costly Program Despite Cost-Saving Strategies
MA costs the federal government 22%, or more than $2,300, more per beneficiary annually than traditional Medicare, due in part to potential upcoding by MA plans to make enrollees appear sicker and garner higher payments. There are also concerns that MA insurers excessively deny care and do not adequately pass savings to enrollees through benefits.
How Episodic and Per-Visit Plans Actually Work
Similar to traditional Medicare, episodic MA plans pay agencies a lump sum to cover all costs anticipated during an authorized 60-day episode. Although the agency’s total payment is typically less from an episodic MA insurer than traditional Medicare, episodic payments allow the agency to determine the number of visits, distribution of visits across the stay, and which disciplines are necessary for each patient’s care plan.
Why Per-Visit Plans Create More Administrative Burden
In contrast, per-visit MA plans dictate the total number of visits, and the number of visits per discipline, covered during a specified duration, and the agency must seek reauthorization to add covered days or additional visits for any individual discipline. This requirement is unique to per-visit plans and increases administrative burden on the agency, offering minimal flexibility for determining how many visits, and from which disciplines, each patient receives.
What This Medicare Advantage Home Health Reimbursement Research Means for Outcomes
Worse outcomes were often seen for the MA plan type that had the fewest visits from disciplines that target that specific outcome. For example, episodic MA plans had the fewest physical and occupational therapy visits alongside the worst functional improvement outcomes, whereas per-visit MA plans had the fewest social work and nursing visits but the most adverse inpatient transfer events, potentially related to restrictive preauthorization processes that limit an agency’s ability to send the discipline that could better address the issue ultimately causing the transfer.
What This Means for Home Health Agencies
Home health agencies negotiating with MA insurers may want to prioritize episodic payments, which the research suggests carry reduced administrative burdens and potentially fewer adverse outcomes than per-visit MA contracts. Given the study’s finding that episodic MA plans, which allow agency flexibility in determining visit delivery, may have fewer adverse inpatient transfer outcomes compared with MA plans that dictate the amount and type of care provided, this research offers home health agencies a concrete data point to bring into contract negotiations with Medicare Advantage insurers.
What Comes Next for Medicare Advantage Home Health Reimbursement Policy
As the first study to quantitatively examine the different MA reimbursement structures’ impact on home health care delivery and patient outcomes, this research may inform future regulatory and policy efforts, negotiations between home health providers and MA plans, and beneficiary decisions during enrollment. Researchers noted that the optimal number and mix of visits by discipline remain unknown, and future work should examine direct relationships between care delivery variables and home health outcomes to further clarify how Medicare Advantage home health reimbursement structures should be designed to minimize adverse patient outcomes.
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