Medicare Advantage plans must deliver the same “benefits” as Traditional Medicare, but I’ve always explained that they can and do frequently cover far fewer services. In short, they often deny care, taking a narrow view as to what services are medically necessary, especially when the care is costly. A new paper in JAMA by researchers at the Brown University School of Public Health shows that our government lets insurers offering Medicare Advantage plans get away with inappropriate care denials with little more than a slap on the wrist, likely failing to deter them from continuing these bad acts.
To set the context, insurers offering Medicare Advantage plans benefit financially when they do not pay for care, including care that is not necessary. Not surprisingly, they have been found to engage in fraud and other bad acts as a result of widespread and ongoing inappropriate delays and denials of care and coverage. The Brown team found that in xx they received nearly half a trillion dollars in taxpayer dollars for their services, with little accountability for how they spend that money.
Government enforcement actions are essential to program integrity and to protect Medicare Advantage enrollees. However, the Brown team found that between 2010 and 2023 the government took few enforcement actions against insurers offering Medicare Advantage plans. The government imposed paltry civil financial penalties.
During the 14-year timeframe studied, the government took 844 enforcement actions, affecting 42 percent of Medicare Advantage contracts, 493. During the Obama administration, in 2012, the Centers for Medicare and Medicaid Services (CMS) undertook enforcement actions on 100 contracts. During the Trump administration, in 2019, CMS imposed monetary penalties on just five contracts, with penalties totaling a mere $6.50 per enrollee.
Monetary penalties have been miniscule. And, while CMS has the right to suspend enrollment in MA plans that violate the law or commit bad acts, as well as to terminate their contracts, it almost never does so. CMS only suspended enrollment 99 times and ended contracts eight times.
The researchers found high variability in enforcement actions, depending upon the administration in charge and that fines were modest when enforcement actions were taken. The question is whether these enforcement actions serve any effect in deterring insurer nonadherence with MA contracts. The researchers recommend further study into how much enforcement activity is needed and at what level to protect enrollees and ensure insurers offering Medicare Advantage plans comply with federal standards.
Here’s more from Just Care:
- 2026: Take advantage of the Medicare Advantage Open Enrollment Period
- Medicare Advantage insurers face few penalties for their bad acts
- Government rules won’t curtail Medicare Advantage bad acts without stiff penalties
- People in poor health leave their Medicare Advantage plans more often than people who are healthy
- Ten ways to improve Medicare Advantage
