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JAMA Forum Archive, 2012-2019: Health policy commentary from leaders in the field
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What Do Medicare Advantage Networks Look Like?

The recent, strong growth of Medicare Advantage—private plan alternatives to traditional Medicare—makes understanding the program a priority for policy makers. Of the 57 million Medicare beneficiaries, approximately 33% are now enrolled in Medicare Advantage, an increase from 13% in 2004. Although we know a great deal about Medicare Advantage, there’s one thing we know almost nothing about: the extent and value of plans’ networks of physicians and hospitals at which enrollees can obtain covered care. This is important, because establishment and oversight of networks is a principal way Medicare Advantage plans manage cost and quality, and there has been a trend toward more narrow networks in insurance markets, raising concerns about access and patient cost.

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We know from prior studies where and why insurers choose to enter the Medicare Advantage market, the structure of this market, the costs and quality of plan offerings, the variation in service use between Medicare Advantage and traditional Medicare beneficiaries, and the cost and utilization spillovers from Medicare Advantage to traditional Medicare. So why do we know little about Medicare Advantage networks?

For one thing, we can’t easily or accurately observe plan networks. The surest way to know if a physician is covered by a plan is to scrutinize the contracts between plans and providers. But these are closely held by the organizations, so are unavailable to researchers. Plans do publish provider directories, but there are no validated, comprehensive, historical archives of directories. Those that are available are not uniformly machine readable and are known to contain errors and omissions, such as listing physicians not in networks or failing to list those that are. A final way to infer networks is from utilization patterns, but this requires utilization data which, with rare exception, is not available for research.

Some of these limitations also apply plans participating in the Affordable Care Act (ACA) marketplaces, yet there have been several studies of their networks. For example, in the ACA’s marketplaces, plans with narrow physician networks have been associated with lower premiums than those with broader networks. A study of plans offered through the federal health insurance marketplace found that 15% of them did not have a physician in at least one specialty within 50 miles. A study of marketplace hospital networks in California found that although the networks were narrower than in commercial plans, quality of care was comparable or higher for those narrow networks. Another study of the California marketplace found that “secret shoppers” were able to schedule an appointment with a selected in-network provider in fewer than 30% of cases.  Other work on employer-sponsored plans is consistent with these findings.

Although there has been no national or longitudinal analysis of Medicare Advantage physician networks, a Kaiser Family Foundation (KFF) analysis released on October 5 provides a look at them for 391 plans offered by 55 insurers in 20 counties in 2015. This analysis found, through examining plans’ directories, that on average, Medicare Advantage networks included 46% of all physicians in a county. The study also found considerable variation by specialty, with psychiatrists being least the likely to be included in plan networks (on average, a plan covered care by 23% of psychiatrists in a county) and ophthalmologists the most likely (59%). (This follows an earlier KFF study, released on June 20, that found that 16% of Medicare Advantage plans in 20 counties covered care at less than 30% of hospitals.) As for costs, the October study found that broader-network plans tend to charge higher premiums than narrow-network plans.

In the absence of more comprehensive analysis, we should not be reassured that regulators are managing Medicare Advantage networks for quality and efficiency. Although the Centers for Medicare & Medicaid Services (CMS) imposes adequacy requirements based on time and distance criteria for Medicare Advantage physician networks, those requirements are routinely applied only when plans enter markets, and it remains unknown whether the criteria are met months and years after market entry. Indeed, in a 2015 report, the Government Accountability Office recommended more periodic reviews and verification of availability of physicians and hospitals within networks. Earlier this year the Department of Justice reached a settlement with 2 Medicare Advantage plans over charges of misrepresentation of their networks to regulators.

Not only do researchers lack comprehensive data on Medicare Advantage networks, but beneficiaries are largely in the dark as well, a problem that extends to ACA marketplace plans. As many as 40% of consumers are not aware of the extent of their plan’s network. More is needed to help consumers understand networks and make choices among them. The Consumers Union has called for stronger network adequacy standards, monitoring, and increased reliability of directories of physicians and hospitals.

More is being done for the ACA’s health insurance marketplace plans than for Medicare Advantage. This year, CMS will disclose the relative breadth of networks associated with plans in federally facilitated marketplaces, which operate in states that have chosen not to build their own. But there are signs that CMS may apply greater scrutiny of Medicare Advantage networks in the future. The agency has proposed to collect network data from insurers every 3 years so that it can review them.

That’s an initial step in the right direction. Making the data accessible to beneficiaries and researchers would be welcome additional steps.

About the author: Austin B. Frakt, PhD, is the Director of the Partnered Evidence-based Policy Resource Center, Veterans Health Administration; an Associate Professor at Boston University’s School of Medicine and School of Public Health; and a Visiting Associate Professor with the Department of Health Policy and Management at the Harvard T.H. Chan School of Public Health. He blogs about health economics and policy at The Incidental Economist and tweets at @afrakt. The views expressed in this post are that of the author and do not necessarily reflect the position of the Department of Veterans Affairs, Boston University, or Harvard University.  (Image: Doug Levy)
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