Prices for Physicians’ Services in Medicare Advantage and Commercial Plans

Abstract

The prices that insurers pay physicians ultimately affect beneficiaries' health insurance premiums. Using 2014 claims data from three major insurers, we analyzed the prices insurers paid in their Medicare Advantage (MA) and commercial plans for 20 physician services, in and out of network, and compared those prices with estimated amounts that Medicare's fee-for-service (FFS) program would pay for the same service. MA prices paid by those insurers were close to Medicare FFS prices, varied minimally, and were similar in and out of network. In contrast, commercial prices paid by the same insurers were substantially higher than FFS, varied widely, and were up to three times higher out of network than in network. Those results suggest that insurers can use statutory limits on out-of-network charges in MA to negotiate lower in-network prices in those plans. In contrast, without those limits on out-of-network prices, in-network prices in commercial plans are much higher.

Variation in prices for an evidence‐based pediatric preventive service

“…Further, we found that all state Medicaid agencies and nearly all private payers paid less for fluoride varnish than a projected Medicare rate. These findings are surprising because prior research has found that private insurers typically pay more than Medicaid, 8,16 and Medicare rates 3,6,8–10 …”

“…These findings are surprising because prior research has found that private insurers typically pay more than Medicaid, 8,16 and Medicare rates. 3,6,[8][9][10] Although median prices paid by private insurers in Maine and Connecticut were similar to Medicaid rates for fluoride varnish in these states, these states' Medicaid agencies pay for fluoride varnish plus additional preventive oral health services (i.e., risk assessment and/or oral evaluation), just like 14 other Medicaid agencies. 37 The combined Medicaid payments for "fluoride varnish plus" were substantially higher than prices paid by private insurers for nearly fluoride varnish claims-more than double the median price paid by private insurers for fluoride varnish in these states.…”

“…[1][2][3][4][5][6] Studies find higher prices among private insurers than Medicare and Medicaid. 3,[6][7][8][9][10] These studies, however, are generally focused on adults, hospital prices, and comparisons between private insurers and Medicare, which rarely covers pediatric services. 11 Research has typically focused on comparisons to Medicare which is a national program with prices set administratively.…”

“…Variation in prices paid for health care services is well‐documented across geography and payer 1–6 . Studies find higher prices among private insurers than Medicare and Medicaid 3,6–10 . These studies, however, are generally focused on adults, hospital prices, and comparisons between private insurers and Medicare, which rarely covers pediatric services 11 .…”

Health Care Utilization and Spending in Medicare Advantage vs Traditional Medicare

“…A recent study documented spending reductions as beneficiaries transitioned from commercial insurance into TM, 25 likely because of the higher prices paid by commercial insurers relative to TM. 26 That study did not examine MA beneficiaries, however.…”