Medicare FFS Utilization Declined Across the Board During COVID-19

February 18, 2021 - As communities implemented shelter-in-place orders and medical providers closed their doors in the spring of 2020, older adults did not seek medical care, leading to a dramatic reduction in Medicare fee-for-service (FFS) utilization, a new Avalere analysis shows.

Medicare FFS utilization was down across the board during the spring, with the largest decrease happening in April when outpatient claims dropped by 51 percent compared to the same period the year before and professional claims dropped by 42 percent.

Hospital inpatient volume was also down among Medicare FFS beneficiaries, dipping from 29 percent and 27 percent in January and February of 2020 to 4 percent in March, -23 percent in April, and -12 percent in May, the analysis of Medicare FFS claim volume during the first half of 2020 found.

Overall, Medicare FFS utilization decreased by 14 percent in March, 44 percent in April, and 26 percent in May compared to the same periods in 2019. And this overall decline could spell trouble for patients and their providers.

“The impact of delayed or avoided care on the health status of Medicare beneficiaries will need to be examined over the following months and years as there could be lasting effects even as the pandemic recedes,” researchers stated in the analysis.

“In addition, decrease in service utilization could indicate that people missed out on preventive care and postponed care they may have needed to receive, which contributes to compounding concerns in management of chronic and acute care leading to pent up demand in future months in addition to potential healthcare costs associated with gaps in care,” they continued.

Healthcare organizations experienced their worst month financially in April as the average operating margin dropped 282 percent, consulting firm Kaufman Hall reported.

Dramatic declines in patient volumes—30 percent decline in overall discharges year-over-year—and revenues—30 percent decline in overall revenue year-over-year—drove the reduction in financial performance.

Hospitals started recovering volumes and revenues through the rest of the spring and summer, but have faced several setbacks, including a recent decline in hospital outpatient services because of consumer reluctance to visit healthcare facilities.

Meanwhile, hospitalization rates have increased significantly at the end of 2020 compared to previous months as the number of COVID-19 cases surged during the winter, the firm found.

While COVID-19 hospitalizations are a cause for concerns, provider organizations are also worried about how consumer reluctance to visit healthcare facilities will impact their volumes, revenues, and especially patient outcomes.

According to a December survey of primary care physicians, a majority of providers are already seeing patient complexity increase as well as social determinants of health, including housing and food insecurity.

Additionally, the survey conducted by the Primary Care Collaborative and the Larry A. Green Center found that 43 percent of primary care providers are conducting fewer in-person visits, largely because of patient preference (66 percent) and safety concerns (74 percent).

This is especially troubling for older adults who tend to have a higher rate of chronic conditions. A separate survey from Xtelligent Healthcare Media found that chronic disease management has stalled during the pandemic.

Telehealth has helped to fill some gaps, but many providers are still finding the right balance of in-person and virtual care to effectively manage patients. Older adults have also had lower telehealth utilization rates compared to other age groups during the pandemic, research has shown.

For now, researchers at Avalere found that Medicare FFS utilization declines have particularly impacted White and Asian beneficiaries and non-dual eligibles.

In particular, Medicare FFS utilization among patients eligible for both Medicare and Medicaid in the spring of 2020, with the population having 28 fewer claims in April compared to April 2019. The number of claims per non-dual eligible Medicare beneficiaries fell by 48 percent during that period.

Researchers said they plan to monitor the impact COVID-19 has had on healthcare utilization among Medicare FFS beneficiaries with hopes that future analyses will also be able to explain racial and socio-economic differences in utilization declines.