Patients in poor health leave Medicare Advantage plans

Medicare Advantage; CMS Should Use Data on Disenrollment and Beneficiary Health Status to Strengthen Oversight

United States Government Accountability Office (GAO), April 2017

If MAOs (Medicare Advantage Organizations) are meeting the needs of all their beneficiaries, we would expect that the rates at which beneficiaries disenroll would not vary by their health status. However, when beneficiaries in poor health are more likely to disenroll than those in better health—which we refer to as health-biased disenrollment—it may indicate that those beneficiaries could be facing problems with access to care or the quality of services provided. From an oversight perspective, contracts with health-biased disenrollment may not warrant extra CMS scrutiny if relatively few beneficiaries choose to leave the contract. However, contracts with both high overall rates of disenrollment and health-biased disenrollment may indicate potentially problematic contracts.


CMS is responsible for ensuring that all MA contracts offer care that meets applicable standards, regardless of beneficiary health status. However, as part of its routine oversight, CMS does not examine disenrollment rates by health status. Our analysis identified 35 contracts in 2014 where MA beneficiaries in poor health were more likely to disenroll than those in better health. These contracts with health-biased disenrollment had quality scores that were consistently and substantially below the scores of contracts without health-biased disenrollment. In addition, survey data indicate that beneficiaries who left these contracts reported problems with coverage of preferred doctors and hospitals as well as problems getting access to care as leading reasons they chose to leave their contracts. This type of information on disenrollment and beneficiary health status is available to CMS; however, by not leveraging it as part of its routine oversight of MA contracts, CMS is missing an opportunity to better target its oversight activities toward MA contracts that may not be adequately meeting the health care needs of all beneficiaries, particularly those in poor health.



By Don McCanne, M.D.

This GAO analysis shows that individuals enrolled in the private Medicare Advantage plans who were in poor health disenrolled at higher rates than those who were in better health. Reasons given included problems with coverage of their preferred doctors and hospitals (narrow networks) and problems getting access to care.

We know that private Medicare Advantage insurers game the system by selectively marketing to healthier patients and by upcoding to obtain higher risk adjustment payments. Although not discussed in this report, the exodus of patients in poor health could well represent intentional delivery of inferior services in an effort to encourage higher cost patients to leave.

This analysis also showed that healthier patients who left plans did so because of the cost of care, frequently switching to plans with lower costs.

This is how markets work. Healthy patients shop lower prices whereas patients with health care needs leave plans because of poor service. Is that really the way we want our health care system to work? Or would we prefer a system with greater choice in our health care professionals and institutions that strive more to bring us the health care that we truly need? A well designed single payer system would bring us the latter.

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