Preferred Provider Relationships Between Medicare Advantage Plans and Skilled Nursing Facilities Reduce Switching Out of Plans: An Observational Analysis

Abstract

Unlike traditional Medicare, Medicare Advantage (MA) plans contract with specific skilled nursing facilities (SNFs). Patients treated in an MA plan's preferred SNF may benefit from enhanced coordination and have a lower likelihood of switching out of their plan. Using 2011-2014 Medicare enrollment data, the Medicare Healthcare Effectiveness Data and Information Set, and the Minimum Data Set, we examined Medicare enrollees who were newly admitted to SNFs in 2012-2013. We used the Centers for Medicare & Medicaid Services star rating to distinguish between MA plans and show how SNF concentration experienced by patients varies between patients in plans with different star ratings. We found that highly rated MA plans steer their patients to a smaller number of SNFs, and these patients are less likely to switch out of their plans. Strengthening the MA plan-SNF relationship may lower disenrollment rates for SNF beneficiaries, imparting benefits to both patients and payers.

Keywords: Medicare; Medicare Advantage; federal health insurance plans; logistic models; skilled nursing facilities.

Figure 1.

Box plots of SNF concentration experienced by enrollees, by MA plan star rating. Note. SNF = skilled nursing facility; MA = Medicare Advantage.

Figure 2.

Likelihood of switching to another plan among MA enrollees treated in SNFs with low and high concentration of patient’s MA plan. Note. High-concentration SNF implies that the share of an SNF’s patients enrolled in a patient’s MA plan is greater than or equal to ten percent. These likelihoods are calculated adjusting for all patient characteristics listed in Table 1. MA = Medicare Advantage; SNF = skilled nursing facility; TM = traditional Medicare.