Medicare Advantage (MA) beneficiaries in the last year of life dropped their coverage to join traditional Medicare at more than twice the rate of all other MA beneficiaries, according to a new Government Accountability Office (GAO) report.

A recently released GAO report indicates that MA beneficiaries in the last year of life may disenroll because of potential limitations accessing specialized care under MA.

MA plans are banned from limiting coverage based on beneficiary health status. The GAO analysis said the disproportionate number of MA beneficiaries who switched coverage in the last year of their lives may indicate potential issues with their care. While the Centers for Medicare & Medicaid Services (CMS) monitors MA disenrollments, the agency does not specifically review disenrollments by beneficiaries in the last year of life. Doing so could help CMS better ensure the care provided to these beneficiaries, the GAO said.

The report noted that MA members in the last year of life who dropped their coverage to join Medicare fee-for-service (FFS) increased Medicare costs. MA costs are based on a fixed payment arrangements and FFS bases payments on the amount and cost of services provided. The GAO analysis finds that FFS payments for former MA members who dropped their coverage in 2016 were $422 million higher than their estimated MA payments had they remained in MA and were $490 million higher for those that disenrolled in 2017.

The federal watchdog agency said prior studies have shown that beneficiaries in poorer health are more likely to drop their MA coverage to join FFS, which may indicate that they encountered issues with their care under MA. Beneficiaries in the last year of life are generally in poorer health and often require high-cost care. The recently released report analyzed CMS disenrollment and mortality data for 2015 through 2018—the most current data at the time of the analysis—to examine the extent of MA beneficiary disenrollment in the last year of life.

To assess the costs of disenrollment, GAO used CMS data to estimate payments for disenrolled beneficiaries had they remained in MA and compared those estimates against those beneficiaries' actual FFS costs.

As a result of the findings, the GAO recommends that CMS monitor disenrollments by MA beneficiaries in the last year of life and the Department of Health and Human Services agreed with the recommendation.

Click here to read the full report.