+ Site Statistics
+ Search Articles
+ PDF Full Text Service
How our service works
Request PDF Full Text
+ Follow Us
Follow on Facebook
Follow on Twitter
Follow on LinkedIn
+ Subscribe to Site Feeds
Most Shared
PDF Full Text
+ Translate
+ Recently Requested

Why Medicare Advantage Plans Pay hospitals traditional Medicare prices

Why Medicare Advantage Plans Pay hospitals traditional Medicare prices

Health Affairs 34(8): 1289-1295

The policy community generally has assumed Medicare Advantage (MA) plans negotiate hospital payment rates similar to those for commercial insurance products and well above those in traditional Medicare. After surveying senior hospital and health plan executives, we found, however, that MA plans nominally pay only 100-105 percent of traditional Medicare rates and, in real economic terms, possibly less. Respondents broadly identified three primary reasons for near-payment equivalence: statutory and regulatory provisions that limit out-of-network payments to traditional Medicare rates, de facto budget constraints that MA plans face because of the need to compete with traditional Medicare and other MA plans, and a market equilibrium that permits relatively lower MA rates as long as commercial rates remain well above the traditional Medicare rates. We explored a number of policy implications not only for the MA program but also for the problem of high and variable hospital prices in commercial insurance markets.

Please choose payment method:

(PDF emailed within 0-6 h: $19.90)

Accession: 059270724

Download citation: RISBibTeXText

PMID: 26240241

DOI: 10.1377/hlthaff.2014.1427

Related references

Medicare Advantage Plans Pay Hospitals Less Than Traditional Medicare Pays. Health Affairs 35(8): 1444-1451, 2016

How Do the Hospital Prices Paid by Medicare Advantage Plans and Commercial Plans Compare With Medicare Fee-for-Service Prices?. Inquiry 55: 46958018779654, 2018

Prices for physician services in Medicare Advantage versus traditional Medicare. American Journal of Managed Care 24(7): 341-344, 2018

A comparison of relative resource use and quality in Medicare Advantage health plans versus traditional Medicare. American Journal of Managed Care 21(8): 559-566, 2015

Regional Variations: The Use Of Hospitals, Home Health, And Skilled Nursing In Traditional Medicare And Medicare Advantage. Health Affairs 37(8): 1274-1281, 2018

Prices for Physicians' Services in Medicare Advantage and Commercial Plans. Medical Care Research and Review 2018: 1077558718780604, 2018

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements. Final rule. Federal Register 81(220): 80170-80562, 2016

Health characteristics of Medicare traditional fee-for-service and Medicare Advantage enrollees: 1999-2004 National Health and Nutrition Examination Survey linked to 2007 Medicare data. National Health Statistics Reports 2012(53): 1-12, 2012

Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program. Final rule. Federal Register 83(73): 16440-16757, 2018

Medicare beneficiary out-of-pocket costs: are Medicare Advantage Plans a better deal?. Issue Brief 19: 1-16, 2006

Do Restrictions on Antipsychotic Use Differ Between Medicare Part D Stand-Alone Versus Medicare Advantage Plans?. Consultant Pharmacist 32(2): 109-118, 2017

Medicare's private plans: a report card on Medicare Advantage. Health Affairs 28(1): W41-W54, 2008

Inappropriate Utilization in Fee-for-Service Medicare and Medicare Advantage Plans. American Journal of Medical Quality 33(1): 58-64, 2017

Medicare Advantage, accountable care organizations, and traditional Medicare: synchronization or collision?. Yale Journal of Health Policy Law and Ethics 15(1): 37-55, 2015

Differences in Nursing Home Quality Between Medicare Advantage and Traditional Medicare Patients. Journal of the American Medical Directors Association 17(10): 960.E9, 2016