However, Medicare Advantage (MA) patients experience higher rates of emergency department (ED) direct discharges and observation stays.
MA beneficiaries have a lower risk of hospitalization for ambulatory care sensitive conditions (ACSCs) than traditional Medicare members, according to a study published in JAMA Health Forum.
That tendency may be due to shifting MA patients to other care settings though, with the research also finding that MA beneficiaries are more likely to be directly discharged from the ED or stay for observation.
The study examined 2018 administrative claims and encounter data for patients enrolled in MA and traditional Medicare to compare utilization of hospitalizes, observations, and ED direct discharges with ACSCs.
"Medicare Advantage plans have strong incentives to reduce potentially wasteful health care, including costly acute care visits for ambulatory care−sensitive conditions (ACSCs)," researchers stated.
It's unclear, however, if MA plans lower acute care use compared to traditional Medicare, or if they shift patients to other settings of care.
Based on the study's findings, "apparent gains in lowering rates of potentially avoidable acute care have been associated with shifting inpatient care to settings such as ED direct discharges and observation stays."
MA plans are known to use tools such as prior authorization to treat patients at the lowest cost site of care allowed, the researchers highlighted, pointing to 70% of MA enrollees being in a plan that required prior authorization for inpatient stays in 2018.
A recent report by Kaiser Family Foundation found that more than two million prior authorization requests, accounting for six percent of the 35 million total requests, were denied MA plans in 2021.
Site shifting can save on out-of-pocket costs, but the tradeoff may be in care quality, resulting in MA members incurring higher costs from other care settings.
"Additionally these findings suggest the need for caution in relying on hospitalizations for ACSCs to serve as an indicator of higher-quality care in ambulatory settings," the researchers concluded.
Jay Asser is the contributing editor for strategy at HealthLeaders.
KEY TAKEAWAYS
Research published in JAMA Health Forum analyzed 2018 administrative claims and encounter data for Medicare Advantage and traditional Medicare enrollees.
The findings reveal that Medicare Advantage beneficiaries are less likely to be hospitalized for ambulatory care sensitive conditions, but more likely to be directly discharged from the emergency department or stay for observation.
Medicare Advantage plans could be shifting patients to the lowest care setting to save on costs, but lower quality of care could eventually result in higher costs.