Journal article
Why Medicare Advantage Plans Pay Hospitals Traditional Medicare Prices
Health affairs (Millwood, Va.), Vol.34(8), pp.1289-1295
08/01/2015
DOI: 10.1377/hlthaff.2014.1427
PMID: 26240241
Abstract
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.
Details
- Title: Subtitle
- Why Medicare Advantage Plans Pay Hospitals Traditional Medicare Prices
- Creators
- Robert A. Berenson - Urban InstituteJonathan H. SunshineDavid Helms - Johns Hopkins UniversityEmily Lawton - Urban Institute
- Resource Type
- Journal article
- Publication Details
- Health affairs (Millwood, Va.), Vol.34(8), pp.1289-1295
- DOI
- 10.1377/hlthaff.2014.1427
- PMID
- 26240241
- NLM abbreviation
- Health Aff (Millwood)
- ISSN
- 0278-2715
- eISSN
- 2694-233X
- Publisher
- Project Hope
- Number of pages
- 7
- Grant note
- Robert Wood Johnson Foundation through the HCFO Initiative
- Language
- English
- Date published
- 08/01/2015
- Academic Unit
- Health Management and Policy
- Record Identifier
- 9984446542802771
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