Medicare Advantage (MA) plans have a number of advantages and drawbacks over traditional Medicare (TM) (i.e., fee-for-service). One advantage of MA plans is that cost sharing is often lower. Another benefit is that enrollees may receive additional coverage benefits. One drawback is that enrollee provider choice may be restricted. Fewer provider options may be bad for some patients, but it does lower premiums if the narrow network has lower reimbursement rates (see Dafny et al. 2017). A key empirical question is how restrictive are Medicare Advantage provider networks?
This is the question Feyman et al. (2024) aim to answer. Using 2011-2017 Medicare claims and Medicare Advantage prescription drug event (PDE) data, the authors measure network restrictiveness for nine high-prescribing specialties. Network restrictiveness is measured as “observed-to-expected ratio, calculated as the number of unique providers seen by MA beneficiaries divided by the number expected based on the prediction model.”
Provider networks in MA varied in restrictiveness. OB-Gynecology was the most restrictive with enrollees seeing 34.5% (95% CI: 34.3%–34.7%) as many providers as they would absent network restrictions; cardiology was the least restrictive with enrollees seeing 58.6% (95% CI: 58.4%–58.8%) as many providers as they otherwise would. Factors associated with less restrictive networks included the county-level TM average hierarchical condition category score (0.06; 95% CI: 0.04–0.07), the county-level number of doctors per 1000 population (0.04; 95% CI: 0.02–0.05), the natural log of local median household income (0.03; 95% CI: 0.007–0.05), and the parent company’s market share in the county (0.16; 95% CI: 0.13–0.18). Rurality was a major predictor of more restrictive networks (−0.28; 95% CI: −0.32 to −0.24).
In short, network restrictiveness as a generic term is less helpful since network restrictiveness varies by physician specialty. In addition, rural Medicare beneficiaries not only have fewer physician choices due to their more remote location, but also MA plans impose the most restrictive networks on these individuals.
You can read the full paper here.