Physician reimbursement similar across Medicare Advantage and traditional Medicare plans

1. Medicare advantage and traditional Medicare physician reimbursement are relatively similar across physician services.

2. Medicare Advantage plans, however, have lower prices than traditional Medicare for other health services like laboratory services and medical equipment.

Evidence Rating Level: 2 (Good)

Study Rundown: While Medicare reimburses physicians according to a set fee schedule, not much is known about reimbursement when patients are also covered by private insurers through Medicare Advantage (MA). This retrospective cohort study aimed to compare prices paid for physician and other health care services in MA, traditional Medicare (TM), and commercial plans.

Physician reimbursement in the MA program was similar to TM (ranging 91% of TM to 102.3% of TM), although there was a trend towards MA paying physicians less. Both MA and TM physician costs were lower than commercial plan costs. For laboratory services and medical equipment, commercial costs were lower than TM, and the reimbursements by MA took advantage of these lower commercial costs by reduced reimbursement compared with TM (67.4% to 75.8% of TM). This large claims-based study was successful in comparing TM and MA costs for physician and other health care costs, however limitations included the fact that the MA and commercial data come from one private insurer and thus may not be representative of other insurers or geographic locations.

Click to read the study, published in JAMA Internal Medicine

Relevant Reading: Medicare Advantage Plans Pay Hospitals Less Than Traditional Medicare Pays

In-Depth [retrospective cohort]: This retrospective cohort study was conducted from 2007 to 2012 and analyzed claims data from one large national private insurer for MA and commercial plans. This was compared to traditional Medicare rates from a random sample of Medicare beneficiaries. The outcome of interest was mean reimbursement paid to physicians, laboratories and medical equipment suppliers for MA and commercial plans as compared to TM rates.

A total of 144 million claim data was used for comparisons. Physician reimbursement in MA was similar to or slightly less than TM rates. The mean MA price was 96.9% of TM rates and ranged from 91.3% of TM for cataract removal to 102.3% of TM for complex evaluation and management of patient in the emergency department. In contrast, commercial rates for physician reimbursement was higher than TM rates. For laboratory services and durable medical equipment MA prices were lower than TM rates due to lower commercial rates. These ranged from 67.4% of TM for a walker to 75.8% of TM for a complete blood cell count.

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