Physician Reimbursement in Medicare Advantage Compared With Traditional Medicare and Commercial Health Insurance.

Abstract

There is considerable variation in the negotiated prices that private health insurers pay to clinicians for treating commercially insured patients in the United States.^1-5 Unlike commercial payers, Medicare reimburses physicians and other clinicians according to an administratively set fee schedule. However, nearly one-third of Medicare beneficiaries are covered by private insurers through the Medicare Advantage (MA) program,⁶ and less is known about how these private MA plans reimburse clinicians. On the one hand, we may expect clinician reimbursement in MA to be similar to traditional Medicare’s administratively set rates because the amount that the federal government pays MA plans to provide insurance coverage for MA enrollees is largely based on local traditional Medicare spending levels. However, these same insurers negotiate prices with clinicians for their commercial enrollees that differ from traditional Medicare and reflect market forces, so it is possible that these same market dynamics could affect the MA market. In addition to understanding how clinicians are being paid for care of a large and growing share of Medicare beneficiaries, empirical evidence on clinician reimbursement in MA is also important for evaluating the potential impact of proposed Medicare reforms that would transition Medicare to be increasingly reliant on private plans,⁷ including the impact that such reforms might have on clinician payment.