Mental Health Specialty Networks in Medicare Advantage: Regulation and Risk-Adjustment Incentives

• In Event: Mental Health in Context: Education, Healthcare, and End-of-Life Policy

Abstract

Over half of Medicare beneficiaries are enrolled in Medicare Advantage (MA), the private component of the Medicare program. A key aspect of MA is the formation of provider networks, which constrain the providers that enrollees can see. MA’s networks for mental health specialists are extremely limited, even when compared to provider networks in Medicaid or the individual marketplace. Yet, the reasons for this are not well-understood. In this paper, we evaluate the extent to which MA network adequacy regulation and risk-adjustment incentivize or disincentivize the inclusion of mental health specialists in plan networks.

First, we assess the extent to which the “minimum provider ratio,” which designates the minimum number of providers that plan networks need to include, by specialty, aligns with demand for those specialties. We used the 2022 Medical Expenditure Panel Survey Household Component Outpatient and Office-Based Medical Provider Visits files to estimate utilization by specialty and linked specialty-level utilization with minimum provider ratios by specialty. We calculate two measures of utilization among 55-64 year olds without Medicare to estimate demand for specialists absent of the effects that Medicare might have on utilization: (1) the average number of visits to a given specialty per person and (2) the average number of visits to a given specialty per person among those with at least one visit to that specialty. We analyzed the relationship between each utilization measure and minimum provider-to-enrollee ratios using linear regression and tested for outlying specialties. Second, we evaluate whether MA risk-adjustment, which is used as the basis for compensating plans based on the risk profile of their enrollees, over- vs. under-pays for enrollees who use various specialties. Using 2019 Medicare fee-for-service claims, we compute the average costs for enrollees who use a given specialty type and compare them to the risk-adjusted payment that would be made to plans given their conditions.

Regulatory minimum provider ratios were positively associated with the average number of visits per individual by specialty. A one provider increase in the minimum provider ratio associated with 0.859 increase in the average number of visits (p<0.001). Mental health specialists did not have higher-than-expected utilization based on their minimum provider ratio. By contrast, there was no relationship between the conditional average number of visits per person and the minimum provider ratio of each specialty. Relative to risk-adjustment, patients who use mental health specialists, as opposed to patients that use other specialists, were among the least profitable patients to insurer in MA. Among 30 required specialties, patients that saw clinical psychologists were the third least profitable following only patients that saw infectious disease and cardiothoracic surgery specialists. Patients who saw psychiatrists were also highly unprofitable, with risk-adjusted costs closest to patients who saw general surgeons.

Findings do not suggest that network adequacy regulations are exceptionally divergent from demand for mental health specialists relative to other specialists. However, Medicare beneficiaries that see mental health specialists may be more expensive relative to risk-adjusted plan payments, on average, than Medicare beneficiaries that see other specialists.

Author

• Mark Katz Meiselbach, Johns Hopkins University
  Presenting Author