Analysis of Value-Based Payment and Acute Care Use Among Medicare Advantage Beneficiaries

Introduction

Medicare is increasingly shifting from fee-for-service reimbursement toward value-based models that reward improving quality and controlling spending.¹ While researchers have evaluated these models in traditional Medicare,² less is known about value-based models in Medicare Advantage (MA), despite greater penetration of value-based payment in MA¹ and continued growth of the MA program.³ In this study, we examined the association between value-based payment and acute care use in a national population of MA beneficiaries.

Methods

This cohort study was reviewed by the Humana Healthcare Research Human Subject Protection Office, deemed not human participants research, and informed consent was waived. The study followed the Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) reporting guideline.

We identified beneficiaries enrolled in plans offered by a large MA organization from January 1, 2017, to December 31, 2019, and categorized them according to the payment model for their attributed primary care organization: fee-for-service (FFS); shared savings with upside-only financial risk (upside-only risk); and shared savings with upside and downside financial risk (2-sided risk). Further detail is provided in the eMethods in the Supplement.

We used claims data to identify hospitalizations, observation stays, and emergency department (ED) visits from January 1, 2019, to December 31, 2019. We segmented these outcomes into avoidable and all-cause events (eMethods in the Supplement).^4,5 Next, we used quasi-Poisson regression models to estimate the association between payment model and acute care use, adjusting for age, sex, race, low-income subsidy, Rx-Risk-V score,⁶ and hospital referral region. The Rx-Risk-V score is a pharmacy claims–based comorbidity index and was chosen to avoid any potential bias from differences in documentation practices. To aid interpretability, we calculated adjusted rates of acute care use per 1000 patients, by payment model. Analyses were conducted between May 2021 and August 2021 using SAS Enterprise Guide v8.2 (SAS Institute). All P values were from 2-sided tests, and results were deemed significant at P < .05.

Results

In a study population of 489 796 MA beneficiaries, value-based payment was significantly associated with lower acute care use (Table). Compared with FFS, beneficiaries cared for under 2-sided risk models had lower rates of hospitalizations, observation stays, and ED visits. For example, the adjusted rate of ED visits per 1000 patients for 2-sided risk models was 375.8 (95% CI, 370.9-380.7) compared with 434.1 (95% CI, 426.5-441.9) for FFS. For all outcomes, there was no significant difference in acute care use between beneficiaries cared for under upside-only risk models and FFS.

The association between value-based payment and decreased acute care use was most pronounced for measures of avoidable acute care use. Compared with FFS, 2-sided risk models were associated with a 15.6% (95% CI, 14.2%-17.0%) relative reduction in avoidable hospitalizations, compared with 4.2% (3.4%-4.9%) for all-cause hospitalizations (Figure).