Medicare Advantage Consumers Seek New Plans as Risk Scores Rise
New Medicare Advantage consumers may come along with an increase in risk scores and higher projected health care costs.
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By - Medicare Advantage (MA) consumers who switch to new health plans may have higher risk scores than beneficiaries who are content with their current options, indicates a Congressional Budget Office (CBO) report.
Payers who are actively recruiting new Medicare Advantage consumers, as well as those who are offering new plans to serve their existing members, may wish to consider the rise in complex patients with higher spending needs.
The total risk score of the Medicare Advantage (MA) program increased by 34.7 in 2012 as MA consumers switched their plans but remained with the same insurer, the CBO found.
In 2010, beneficiaries that switched MA plans but remained with the same payer accounted for an 18.3 percent increase in MA risk score growth. An increase in overall MA risk scores suggests older and established MA plans that retain their members may have financial benefits over plans that experience fluctuating enrollment.
CBO suggested that the established plans would receive higher payments for less risky beneficiaries than new market entrants that serve similar beneficiaries.
Using Medicare administrative data from 2008 to 2013, CBO found that MA risk scores had the highest increases among older beneficiaries that switched their plans. Beneficiaries that switched plans in 2012 come with risk scores 11.2 percent higher beneficiaries that enrolled in 2009.
Beneficiaries in 2011 accounted for a 9.7 percent increase in risk scores as they switched plans, and 2012 plan switchers accounted for an 8.3 percent jump in risk scores.
The risk adjustment data also revealed that risk scores in the MA program increased as time progressed, but MA plan switchers experienced faster risk score growth than plan stayers.
“Baseline average risk scores are nearly 10 percent lower for switchers than for stayers (0.90 compared to 0.98), yet switchers experienced much faster increases in risk scores over time,” CBO said. “Risk scores increased 42 percent for switchers from 2009 to 2013, compared to a 29 percent increase for stayers.”
MA plan switchers were younger, which may have lowered their initial risk score, but had other high-risk indicators such as higher disability rates and dual eligibility in the Medicaid and Medicare programs.
Twenty-two percent of MA plan switchers were under 65, while 27 percent were between 65-69. Thirty-seven percent were between 70-79, and 13 percent were over 80 years old.
Thirty percent of disability-eligible beneficiaries switched their MA plan, while 24 percent of disability-eligible members that stayed on their MA plan. Fifteen percent of all dual-eligible members switched MA plan, and 14 percent of dual-eligible members stayed on their plans.
CBO also believes that recently-introduced CMS risk adjustment procedures and data use attributed in overall MA risk scores.
In 2014, CMS began to weigh certain health conditions in MA beneficiaries more heavily in their risk assessments and added new encounter data by 2016, which may provide more detailed risk scores than the data CBO had access to for the purposes of this report.
Other CMS data reforms including new coding intensity and incentives to document risk could also have added to a jump in risk scores.
CBO concluded their findings by suggesting that more data is needed on the relationship between MA beneficiary healthcare resource usage and beneficiary characteristics to better determine their risk scores and expected care costs.
