Hospitals find a lot wrong with Medicare Advantage

August 31 was the deadline for filing responses to the government’s request for information on Medicare Advantage. Thousands of individuals and organizations filed comments, including Just Care, and we are still poring over them. Of particular note, the American Hospital Association’s comments reveal that hospitals find a lot wrong with Medicare Advantage. The government, along with anyone thinking of joining a Medicare Advantage plan, should give its 43-pages of comments close attention.

Here’s an excerpt from the opening:

“In this context, we are writing to share several serious concerns about the negative effects of Medicare Advantage Organization (MAO) practices and policies, which impede patient access to health care services, create inequities in coverage between Medicare beneficiaries enrolled in MA versus those enrolled in Traditional Medicare, and in some cases, even directly harm Medicare beneficiaries through unnecessary delays in care or outright denial of covered services.

As enumerated below, such practices include abuse of utilization management programs, inappropriate denial of medically necessary services that would be covered by Traditional Medicare, requirements for unreasonable levels of documentation to demonstrate clinical appropriateness, inadequate provider networks to ensure patient access, and unilateral restrictions in health plan coverage in the middle of a contract year, among others. These practices add billions of wasted dollars to the health care system, are a major driver of health care worker burnout,1 and worst of all, harm the health of Medicare beneficiaries.”

The AHA goes on to explain that MA plans are failing to pay the hospitals hundreds of millions of dollars they are due. There’s no collection agency that will go after the MA plans for payment.

“Insurer practices that deny and delay payment for services appropriately rendered to patients exacerbate these financial challenges and destabilize providers of critical health care services. For example, in our most recent survey, 50% of hospitals and health systems reported having more than $100 million in accounts receivable for health insurance claims that are older than six months. This amounts to $6.4 billion in delayed or potentially unpaid claims that are six months old or more among the 772 reporting hospitals, leaving providers with untenable financial liability. In MA specifically, one-third of hospitals reported having $50 million or more in accounts receivable that are six months or older, suggesting that MA plans make up a significant portion of the problem.”

MA horror stories are not uncommon for patients needing inpatient hospital care:

“Our most recent AHA survey data shows that health plans serving public programs are more likely to deny inpatient prior authorization requests, and specifically that MA plans have the highest inpatient prior authorization denial rate across all payers, followed by Medicaid managed care and then commercial products. These rates vary despite physicians following the same clinical guidelines and regardless of a patient’s type of coverage, suggesting that the denials are linked to financial, not clinical, considerations. Further, these survey data reflect that MA plans are aggressively and systematically denying nearly 20% of all inpatient prior authorization claims off the bat, most of which are later overturned.”

The Texas Hospital Association submitted its own comments and told this story:

“Misuse of utilization management practices directly jeopardizes lifesaving care. One hospital in rural Texas shared a story of a patient over age 90 on blood thinners, who presented after falling and hitting their head. The MA plan denied authorization for a CT scan to check for a suspected brain bleed, stating it was not medically necessary. The hospital performed the CT scan anyway, confirming a brain bleed requiring transfer to a higher level of care. That night, the patient was flown to another facility and received treatment that saved their life. If the local hospital had abided by the CT scan denial from the MA plan, this patient would not  survived.”

Here’s more from Just Care:

• Ten ways to improve Medicare Advantage
• Hospitals still not disclosing their prices, violating the law
• 2022: Medicare Advantage facts and figures
• Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
• Senate Finance Chair looks into deceptive Medicare Advantage marketing practices