OBJECTIVES: To compare characteristics of high-cost managed Medicare beneficiaries to those enrolled in traditional Fee-for-Service plans.

METHODS: We used claims from a large national sample of managed Medicare (MM) plans to conduct a retrospective analysis for the 2012 payment year. FFS comparisons were drawn from a similar study that was also supported by the Commonwealth Fund; access to code-sets assured direct comparisons. Total spending was evaluated by applying Medicare allowed payment amounts to support direct comparisons to FFS costs. High-cost was defined as the top 10% based on spending per beneficiary.

RESULTS: The study sample included 2,002,062 MM beneficiaries in 2012. The top four chronic conditions in MM were identical to FFS: hypertension (70%), hyperlipidemia (64%), arthritis (34%) and diabetes (33%). A significantly larger proportion of high-cost MM beneficiaries had disability as their reason for entitlement to Medicare (51.3% vs. 33.7%), while a larger proportion of high-cost FFS enrollees qualified based on age ≥65 (61.2% vs. 48.6%). High-cost MM enrollees were younger (71.8 vs. 73 years). A significantly larger proportion of FFS dual eligible (those qualifying for both Medicare and Medicaid based on income) were high-cost compared to MM duals (37% vs. 26.6%). A much larger proportion of high-cost MM members lived in urban/suburban areas (93.4% vs. 74.5%).

CONCLUSIONS: The number of beneficiaries enrolled in MM plans has more than tripled from 2004 to 18.5 million in 2017 (33% of Medicare) but there is little existing research about this growing population, largely because data has not been readily available as it has for FFS. A better understanding of high-cost, high-need segments is essential to developing policies/programs aimed at reducing costs with the rapid growth of managed care and pay-for-value vs. volume programs. This study found a similar prevalence of chronic conditions in MM and FFS enrollees, but differing profiles of high-cost patients.