A review of last year’s data shows a spike in service utilization for members with Medicare Advantage (MA) plans in 2023. This information came from an AHIP survey, which found that total medical expenses in the fourth quarter were up 8.1% compared to the same time in 2022. Year-over-year medical expenses increased between 7.0% and 7.5% in each of the other three quarters.

While this survey relayed consistent increases across almost all service areas, those that saw the highest percentage of utilization were outpatient surgery (14.4%), general outpatient visits (8.7%), and physician visits (6%). The increase in emergency room services was much higher at the start of 2023 (14.2%) and leveled out to 4.0% by the last quarter.

In addition, most MA plans found that members sought surgical procedures related to the circulatory, musculoskeletal, and respiratory systems. The study also showed that many members may have waited until the end of 2023 to take advantage of their Part B drug benefits, as the last quarter saw the biggest increase by far.

News of these numbers comes in close succession of CMS’ final rule, which outlined a 0.16% decrease in benchmark payments for Medicare Advantage plans in 2025. With these payment-related changes and 5.4% projected growth in Medicare spending each year until 2030, health plans should prepare their provider networks for imminent changes:

  • Urge members to take advantage of rehabilitation services such as physical therapy and occupational therapy for joint protection, heart health, and lung care. This encourages more conservative and proactive management of conditions in these areas.
  • Offer incentives for members who comply with care recommendations and take active steps to manage their health outside of attending doctor’s visits.
  • Provide members with information on where urgent care clinics near them are located and when these centers can be used in lieu of emergency services.
  • Partner with provider networks to offer joint ventures such as health screenings, exercise programming, and more where members can meet clinicians local to them.
  • Guide members in planning service use more consistently throughout the year (especially for prescription drug coverage) to prevent medication shortages.