Impact of continued biased disenrollment from the Medicare Advantage Program to fee-for-service.

Background: Medicare managed care enrollees who disenroll to fee-for-service (FFS) historically have worse health and higher costs than continuing enrollees and beneficiaries remaining in FFS.

Objective: To examine disenrollment patterns by analyzing Medicare payments following disenrollment from Medicare Advantage (MA) to FFS in 2007. Recent growth in the MA program, introduction of limits on timing of enrollment/disenrollment, and initiation of prescription drug benefits may have substantially changed the dynamics of disenrollment.

Study design: The study was based on MA enrollees who disenrolled to FFS in 2007 (N=248,779) and a sample of "FFS stayers" residing in the same counties as the disenrollees (N=551,616). Actual Medicare Part A and Part B payments (excluding hospice payments) in the six months following disenrollment were compared with predicted payments based on claims experience of local FFS stayers, adjusted for CMS-Hierarchical Condition Category (CMS-HCC) risk scores.

Results: Disenrollees incurred $1,021 per month in Medicare payments, compared with $798 in predicted payments (ratio of actual/predicted=1.28, p < 0.001). Differences between actual and predicted payments were smaller for disenrollees of Preferred Provider Organizations and Private Fee-for-Service plans than of Health Maintenance Organizations. Analysis of 10 individual MA plans revealed variation in the degree of selective disenrollment.

Conclusions: Despite substantial changes in policies and market characteristics of the Medicare managed care program, disenrollment to FFS continues to occur disproportionately among high-cost beneficiaries, raising concerns about care experiences among sicker enrollees and increased costs to Medicare.