Skilled Nursing Use Unchanged by Medicare Advantage Cost-Sharing Caps

Limiting out-of-pocket costs for skilled nursing services under Medicare Advantage plans doesn’t appear to affect the use of SNF services.

Specifically, when a team of researchers compared MA plans with mandatory cost-sharing reductions and those without, they found little difference in the use of SNFs.

The findings, published online on March 12 in the Journal of the American Geriatrics Society, were somewhat surprising because other reports have found that setting caps leads to greater use of health care services, study author Laura Keohane of Vanderbilt University told Skilled Nursing News.

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But there could be more going on beneath the surface.

“Medicare Advantage plans can take other measures beside cost sharing to limit SNF use that facilities should be aware of,” she noted.

Regulation to cap costs

MA plans’ cost-sharing structures, defined as the portion of costs covered by insurance that a consumer pays out of pocket by HealthCare.gov, faced several restrictions beginning in 2011. That year, Centers for Medicare & Medicaid Services (CMS) required almost all MA plans to set a yearly out-of-pocket limit of $6,700 at most. CMS also limited the amount of cost sharing for SNF services to $141.50 per day — the traditional Medicare cost-sharing amount in 2011 — starting on the 21st day.

The researchers examined the cost-sharing caps that applied to the first 20 days of a SNF stay, setting them at $50 per day.

Before the cost-sharing cap was set, plans with mandated cost-sharing reductions averaged five SNF admissions and 158.1 SNF days per month per 1,000 members, according to adjusted analyses. The plans without mandated cost sharing reductions averaged five SNF admissions and 107.8 SNF days per month per 1,000 members in the same time frame.

After the cap implementation, however, the plans with mandated cost-sharing reductions did not see larger changes in SNF use than the plans without the reductions, the researchers found.

Though the monthly number of SNF days per 1,000 members went up 14.3 days after the cap implementation in plans with the reductions, the change was not significantly larger than changes in plans without mandatory cost-sharing decreases, the study found.

But there could be other ways Medicare Advantage plans boosted cost-sharing that the study didn’t measure, Keohane noted. These include steps such as prior authorization, where a plan needs to give its approval for a stay, or increasing out-of-pocket costs for all services.

“Maybe patients were still paying as much for SNF services but at different points in their stay,” Keohane said. “Unfortunately we don’t have data to be able to study whether plans are taking those kinds of measures.”

But even if hard numbers are hard to come by, SNFs should be aware of the steps MA plans are taking to limit SNF use.

“The government continues to regulate cost-sharing and imposed even lower limits for cost-sharing,” Keohane explained. “So those steps may increase pressure on Medicare Advantage plans to find other methods to manage these services.”

Written by Maggie Flynn

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