{"subscriber":false,"subscribedOffers":{}} Medicare Advantage Plans Pay Large Markups To Consolidated Dialysis Organizations | Health Affairs

Research Article

Medicare

Medicare Advantage Plans Pay Large Markups To Consolidated Dialysis Organizations

Affiliations
  1. Eugene Lin ([email protected]), University of Southern California, Los Angeles, California.
  2. Bich Ly, University of Southern California.
  3. Erin Duffy, University of Southern California.
  4. Erin Trish, University of Southern California.
PUBLISHED:No Accesshttps://doi.org/10.1377/hlthaff.2021.02009

The 21st Century Cures Act of 2016 lifted regulations prohibiting Medicare Advantage (MA) enrollment after patients initiate dialysis, starting in 2021, and early reports indicate increased MA enrollment among such patients. Large shifts into Medicare Advantage could disrupt the market because the consolidated dialysis industry can negotiate payment from MA plans that is higher than that for fee-for-service Medicare. For three large insurers representing 48 percent of the 2016–17 MA market, we found that MA plans paid 27 percent more than fee-for-service Medicare. Larger dialysis center chains commanded higher markups. Virtually all facilities of the two largest chains were in network, suggesting that they leverage their market power into all-or-nothing negotiations with plans. Policy makers should consider regulations that limit market consolidation among dialysis providers, as well as their ability to exercise that power in the MA market.

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