Gerald F. Riley
Centers for Medicare & Medicaid Services
Background: Medicare managed care enrollees who disenroll to fee-for-service (FFS) historically have worse health and higher costs than continuing enrollees and beneficiaries remaining in FFS.
Objective: To examine disenrollment patterns by analyzing Medicare payments following disenrollment from Medicare Advantage (MA) to FFS in 2007. Recent growth in the MA program, introduction of limits on timing of enrollment/disenrollment, and initiation of prescription drug benefits may have substantially changed the dynamics of disenrollment.
Study design: The study was based on MA enrollees who disenrolled to FFS in 2007 (N=248,779) and a sample of “FFS stayers” residing in the same counties as the disenrollees (N=551,616). Actual Medicare Part A and Part B payments (excluding hospice payments) in the six months following disenrollment were compared with predicted payments based on claims experience of local FFS stayers, adjusted for CMS-Hierarchical Condition Category (CMS-HCC) risk scores.
Results: Disenrollees incurred $1,021 per month in Medicare payments, compared with $798 in predicted payments (ratio of actual/predicted=1.28, p < 0.001). Differences between actual and predicted payments were smaller for disenrollees of Preferred Provider Organizations and Private Fee-for-Service plans than of Health Maintenance Organizations. Analysis of 10 individual MA plans revealed variation in the degree of selective disenrollment.
Conclusions: Despite substantial changes in policies and market characteristics of the Medicare managed care program, disenrollment to FFS continues to occur disproportionately among high-cost beneficiaries, raising concerns about care experiences among sicker enrollees and increased costs to Medicare.
Keywords: Medicare Advantage, disenrollment, biased selection, managed care
doi: http://dx.doi.org/10.5600/mmrr.002.04.a08
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