JustCare

Tag: CMS

  • Part D insurers bilk Medicare and taxpayers

    Part D insurers bilk Medicare and taxpayers

    The Wall Street Journal reports on a longstanding practice of health insurance companies, which offer Medicare Part D prescription drug benefits, bilking Medicare and taxpayers. As a result, the government overpaid these insurers to the tune of more than $9 billion over ten years. How did this happen and when will it stop?

    As the WSJ explains, the Centers for Medicare and Medicaid Services (CMS) pays these insurance companies in two parts, based on federal legislation. The goal is to help ensure that they keep down Part D premiums, as well as to protect the insurers if they end up with too many members who take a lot of prescription drugs. But, the result is that many of the insurers, including the very biggest, project their base costs to be significantly higher than they end up being. These insurers benefit from their overestimates.

    Under federal law, if Part D insurers estimate their costs at up to 5 percent more than they spend on prescription drugs and administration, they can keep the full amount of the overestimate. That money is on top of the profits embedded in their estimates, which are part of their administrative costs. If their estimate is more than 5 percent above their costs, they get to split the extra dollars, above the 5 percent, with the government.

    It’s a confusing formula. But, there are some big takeaways. Part D insurers make off like bandits with taxpayer dollars if they overestimate their costs. If Medicare administered the drug benefit directly, it would save billions of dollars. If it negotiated drug prices or paid drug prices based on the average of what other countries pay, it was save some $250 billion a year more.

    CVS Health, UnitedHealth and Humana, three of the largest Part D insurers covering about half of all Part D participants, profit most at the expense of taxpayers. And, CVS effectively concedes that it cannot afford not to overestimate costs if it is to protect its finances.  “[W]e can’t have years where we lose money.”

    The WSJ analysis revealed that almost seven in ten people with Medicare were enrolled in a Part D plan that overestimated its costs by 5 percent or more. More than nine in ten people (93 percent) enrolled in a  UnitedHealth Part D plan were in a plan that had overestimated costs by at least 5 percent.

    The big Part D health insurance companies have the data they need to submit accurate bids to CMS. They would not so consistently overestimate their costs to such a high degree if there were a financial disincentive for them to do so. But, they have every incentive to overestimate their costs, bilk taxpayers and deliver their shareholders greater returns. Rather than penalizing them for their overestimates, the government rewards them. It allows the insurers to keep all of the excess funds up to five percent, along with some of the excess funds over that amount.

    Isn’t it time for the government to rein in drug prices and fold the prescription drug benefit directly into traditional Medicare?

    Here’s more from Just Care:

  • Inappropriate Medicare Advantage care denials appear widespread

    Inappropriate Medicare Advantage care denials appear widespread

    A recent report from the HHS Office of the Inspector General (OIG) raises serious concerns about inappropriate Medicare Advantage denials of care as well as wrongful payment denials. It shows that Medicare Advantage plans, commercial health plans that contract with Medicare to deliver Medicare benefits, overturn their own denial decisions 75 percent of the time. Unfortunately, most people do not appeal their denials.

    The OIG report suggests that Medicare Advantage plans are likely inappropriately issuing denials many millions of times a year. The data show that only one percent of Medicare Advantage plan members appealed their denials between 2014 and 2016. And, even with such a small fraction of their members appealing, Medicare Advantage plans overturned 532,000 denials of care or payment–three out of four of these denials–over the two-year period.

    Put differently, 99 percent of Medicare Advantage plan members, who were denied access to care or payment for services they received, did not challenge their denials. They likely did not understand that they have a right to appeal or that it is an easy process. Had they appealed, there is good reason to believe that three out of four of them would have won their appeals.

    Centers for Medicare & Medicaid Services (CMS)  audits of Medicare Advantage plans support the OIG’s findings that many Medicare Advantage plan members may not be getting the care or coverage to which they are entitled. CMS has found profound and persisting problems with Medicare Advantage plans wrongly not paying for care or not approving care. In 2015 alone, CMS found that more than half of the Medicare Advantage plans they audited (56 percent) inappropriately denied care or payment.

    In addition, in its audits of Medicare Advantage plans, CMS found that more than four in 10 Medicare Advantage plans (45 percent) did not provide their members with appropriate or correct information about their denials, undermining their members’ ability to challenge them. CMS penalized these Medicare Advantage plans, but the punishment has not deterred them from continuing to wrongly issue denials.

    The OIG recommends that CMS take stronger action against Medicare Advantage plans. In addition, it notes that even when CMS audits show widespread wrongful denials by Medicare Advantage plans, they do not affect a Medicare Advantage plan’s star ratings. As a result, these star ratings have little if any value for individuals choosing among Medicare Advantage plans. Moreover, health plans that CMS sanctions can also receive quality bonus payments.

    Whenever you receive a denial from your Medicare Advantage plan, you should fight back. You have a high likelihood of winning. It’s a simple process and it’s free.

    If you are trying to evaluate differences among Medicare Advantage plans, do not rely on the star ratings. Avoid plans sanctioned by CMS, which is noted on the Medicare Plan Finder web site.

    Here’s more from Just Care:

  • Before choosing a nursing home, check out Nursing Home Inspect

    Before choosing a nursing home, check out Nursing Home Inspect

    If you are looking into nursing home options, Pro Publica has an online tool worth exploring, Nursing Home Inspect. The tool relies on federal government inspection reports to spotlight nursing homes with serious deficiencies. It also shows the average fines paid by nursing homes and the number of times nursing homes have had payments suspended on new admissions as a result of deficiencies.

    The information on Nursing Home Inspect comes from the Centers for Medicare and Medicaid Services. CMS collects data on all Medicare and Medicaid certified nursing homes. And, you can search nursing home inspection reports in any number of ways, including by key word and by state.

    You can compare the nursing homes in a state based on an array of measures. For example, you can see all nursing homes in a state with serious deficiencies that put patients at immediate risk of harm. And, serious deficiencies abound in many states. Click here for a summary of Nursing Home Inspect’s state-by-state breakdown.

    You can take a deep dive into each nursing facility. Nursing Home Inspect includes information on whether a nursing home is for-profit or non-profit, the number of beds, the amount it has been fined in the last three inspection cycles and the degree of severity of its deficiencies. It also indicates whether a nursing home is a “Special Focus Facility.” These nursing homes have serious quality deficiencies that CMS is focused on addressing. It is likely wise to stay away from these facilities.

    Some states are more proactive than others at issuing fines on nursing homes with deficiencies. You can find out which states are more and less proactive and what the average fine is in a state.

    If you simply want to know which nursing homes in a state have the worst records, Nursing Home Inspect provides you with a list of the 20 nursing homes with the most fines and the 20 nursing homes with the greatest number of serious deficiencies.

    Here’s more from Just Care:

  • Medicare encourages doctors to use costliest cancer drugs 

    Medicare encourages doctors to use costliest cancer drugs 

    The Trump Administration has identified one problem with Medicare payment rates for drugs. StatNews reports that CMS Chief Seema Verma critiqued Medicare regulations that encourage doctors to use the costliest cancer drugs as well as incentivize pharmaceutical companies to charge a high price for cancer drugs.

    You can be sure that pharmaceutical companies give doctors a strong financial incentive to use their most costly cancer therapies. In exchange, Pharma may pay for their vacations, dinners and speaking fees. But, Medicare gives doctors a second incentive to prescribe the highest-cost cancer drugs. It pays them more to use them.

    Medicare pays doctors for the cost of chemotherapy drugs plus six percent for administering these drugs. The higher the cost of the drug, the more the doctors earn.  It should go without saying that ease of administration has nothing to do with the amount Medicare pays doctors.

    Why would Medicare pay a doctor $6,000 to administer a $100,000 drug therapy, much less $30,000 to administer a $500,000 drug therapy. Why would Medicare pay different amounts for the same drug therapy depending upon whether it is administered in a hospital or an outpatient clinic? It is all about the influence of the pharmaceutical companies and big Pharma.

    In a recent speech, CMS chief Seema Verma posed these questions and critiqued Pharmacy Benefit Managers (PBMs) for having a conflict of interest. They allegedly negotiate lower drug prices for insurers. But, they also pocket money from the drug manufacturers to promote their costly drugs. According to Verma, they may keep some of the drug discounts they achieve for themselves.

    Here’s more from Just Care:

  • CMS approves new enrollment hook for Medicare Advantage plans

    CMS approves new enrollment hook for Medicare Advantage plans

    While at first glance a Medicare Advantage plan may seem like a better deal than traditional Medicare, appearances can be deceiving. If you sign up for a Medicare Advantage plan, you severely limit your choice of doctors and hospitals. You also open yourself up to out-of-pocket costs for Medicare-covered services that can easily top $7,000 a calendar year, or $14,000 if you happen to need costly care over two calendar years, (e.g., in December and January). Susan Jaffe of Kaiser Health News reports that the Centers for Medicare and Medicaid Services (CMS)) has just given Medicare Advantage plans a new enrollment hook.

    Beginning in 2019, Medicare Advantage plans will be able to attract more members by offering non-medical benefits, such as transportation services and home-delivered meals. Before you sign up, consider what your health care options will be through the Medicare Advantage plan if you fall and break a hip, get hit by a car, or are diagnosed with a serious illness. You cannot compare Medicare Advantage plans based on the value of the care they deliver to people with costly and complex conditions; virtually no information is available. They compete for healthy people and design their plans and marketing to deter people who need care from joining.

    Without a doubt, non-medical benefits could be extremely valuable to everyone with Medicare. But, if CMS wants to test their value, it should offer the benefit to anyone with Medicare and have an outside independent agency assess whether and how they benefit people. As of now, unlike with traditional Medicare, it is impossible to get most data from Medicare Advantage plans that allow experts to assess and report their relative performance.

    Moreover, given the fraud committed by some Medicare Advantage plans and the inability of the vast majority to compete effectively against traditional Medicare, CMS should be making them more accountable or terminating their contracts. Because their administrative costs are high–largely going to profits–MedPAC, the Medicare Payment Advisory Commission, has reported that, overall, Medicare Advantage plans cost taxpayers about four percent more than traditional Medicare.

    Medicare Advantage plans should not be allowed to spend taxpayer money on benefits not available through traditional Medicare. In the vast majority of the country, these commercial plans cost taxpayers more. Any money they would otherwise allocate to non-medical benefits should go to reducing deductibles and cost-sharing to ensure access to care for their members with costly and complex conditions.

    Here’s more from Just Care:

  • Two tips for keeping your emergency care costs down

    Two tips for keeping your emergency care costs down

    There were 451 emergency room visits for every 1,000 people in America in 2014, up more than 10 percent in the last decade. Medicare always covers emergency care. But, the ambulance trip and the emergency room visits can be very expensive if you are not prepared.  Here are two tips to keep your emergency care costs down.
    1. Find a local ambulance that your health plan covers and keep the number in a safe place.
      • If you have traditional Medicare, the government-administered program, find the number for a Medicare-certified ambulance. So long as you have supplemental coverage, your costs should be covered in full.
      • If you are enrolled in a Medicare Advantage plan, a commercial health plan that offers Medicare benefits, or any other commercial health plan, find the number for an in-network ambulance. Otherwise, your costs could be exorbitant. Unless your insurer has negotiated a price with an ambulance company, that company can charge what it pleases. No one controls the price of ground ambulance services. Kaiser Health News reports that patients in commercial health plans are increasingly facing sticker shock from the cost of their ambulance services.
      • If possible, avoid calling 911 for an ambulance because you may have no control over whether your insurer will cover the ambulance services or whether the ambulance will take you to an in-network hospital. Much like surprise medical bills that patients receive from out-of-network doctors who see them when they are admitted to their in-network hospital, bills from ambulance companies that are not part of a health plan’s network can be in the thousands of dollars. A January 2017 Health Affairs study finds that more than 125,000 of 500,000 ambulance trips in 2014 were out of network.
    2. Call your health plan to understand your out-of-pocket costs for emergency room care and what you can do to minimize them.
      • If you have traditional Medicare, Medicare combined with your supplemental coverage should pick up your costs.
      • If you are in a commercial Medicare Advantage plan, administered by a private insurance company, you will be covered for out-of-network care in an emergency for emergency room services. Your health plan cannot bill you more than $50 for those services. Medically necessary follow-up care is also covered when your health is endangered.
      • If you are not yet eligible for Medicare and enrolled in a commercial health plan, you are guaranteed some protections under the law; but, it is best to know your health plan’s rules.

    If Congress expanded Medicare to cover everyone in the US, as Senator Bernie Sanders and 15 other Senators have proposed, it would protect everyone from surprise medical bills, including surprise ambulance bills. For now, Representative Lloyd Doggett has introduced a bill that would protect patients from surprise medical bills.

    If you want Congress to expand Medicare to everyone in the US, please sign this petition.

    Here’s more from Just Care:

  • Will CMS reduce people’s Part D drug costs?

    Will CMS reduce people’s Part D drug costs?

    A recent article by Sarah Jane Tribble in Kaiser Health News suggests that people with Medicare may see their out-of-pocket costs for prescription drugs shrink. The Centers for Medicare and Medicaid Services (CMS) is looking into how it might pass along certain drug discounts to people in Medicare Part D drug plans. But, will CMS reduce people’s drug costs or will drug manufacturers, insurers and Pharmacy Benefit Managers (PBMs) make sure CMS does not?

    A CMS fact sheet suggests that drug companies are handing out additional drug discounts to PBMs and insurers after people fill their prescriptions. Unlike CMS, which Congress has forbidden from drug price negotiation, PBMs and insurers can extract money from drug manufacturers to put their drugs on a health insurer’s list of covered drugs or to otherwise promote them. The insurers are supposed to let CMS know about any discounts insurers and PBMs receive, and the discounts are then factored into the Part D premium.

    CMS claims in its “fact sheet” that these money transfers between drug manufacturers and insurers keep Medicare premiums down. At the same time, CMS acknowledges that these after-purchase discounts drive up people’s out-of-pocket drug costs and Medicare overall spending. Since these discounts only come after people buy their drugs, copays on these drugs are often higher than they would be were the discounts factored in before purchase.

    Under the current system, insurer and PBM incentives can drive up costs for people with Medicare. For example, PBMs and insurers have good reason to put expensive drugs on the Medicare Part D formularies when they can make more money off of them than off of less costly drugs; they keep less costly drugs off formularies when the drug companies pay them to do so.

    With PBMs and insurers getting big rebates from drug manufacturers to promote costly drugs, drug manufacturers may set drug prices higher to offset those rebates. It’s difficult to understand how a CMS policy change can bring down costs for people in Medicare Part D when it cannot limit the prices drug companies can set for their drugs.

    The PBMs are arguing against CMS policy changes, claiming that they will drive up the Medicare Part D premium. That may very well be true. Policy changes could make Medicare Part D more expensive for people with Medicare until Congress empowers Medicare to regulate drug prices.

    The only way to protect people needing drugs from high out-of-pocket costs is to allow the federal government to regulate prices. If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • New Medicare card in the works

    New Medicare card in the works

    The Centers for Medicare and Medicaid Services, CMS, is preparing to release a new Medicare card to better protect people’s identity from theft. If you have Medicare, you should receive your new card in the mail some time between Spring of 2018 and Spring 2019. You do not have to do anything.

    Today, most people have Medicare cards with their Social Security numbers. The new card will switch out your Social Security number for a new Medicare ID number. The new card is designed to prevent identity theft and fraud.

    Beware of strangers offering to help you with your new Medicare card. They might call pretending to be helping you access your new Medicare card. Keep in mind that Medicare will never contact you to ask for or confirm personal information. So, do not give away this information in person, over the telephone or by email to anyone.

    There is no charge for the new Medicare card. It will take as long as a year for CMS to mail out all new cards, so expect to see yours between April 2018 and April 2019. Your doctor will be able to accept your current card or your new card during this time.

    Guard your card and your Medicare ID number. CMS put out this short video explaining how and why to protect your Medicare information.

    Here’s more from Just Care:

  • UnitedHealth charged with enrollment fraud

    UnitedHealth charged with enrollment fraud

    Fred Schulte of Kaiser Health News reports that UnitedHealth, the largest provider of Medicare Advantage plans–commercial insurers expected to deliver Medicare benefits–has been hiding enrollment fraud and other wrongdoings, according to a whistleblower’s claims in a recently unsealed lawsuit. By so doing, it was able to improperly collect almost $1.5 billion in Medicare bonus payments.

    If UnitedHealth is found to have been engaged in fraud, what penalties will it incur? This is not the first fraud suit against UnitedHealth. UnitedHealth, among other insurers offering Medicare Advantage plans, has been charged with involvement in a range of behaviors to increase their revenues that may run afoul of the law. They face at least six cases brought under the Federal False Claims Act.

    In May, the New York Times reported on a lawsuit filed by a former employee of UnitedHealth charging that the company was improperly making its members out to be sicker than they were in order to receive additional payments from Medicare. The Justice Department is investigating the matter and has said it intends to sue UnitedHealth.

    The new whistleblower lawsuit alleges that UnitedHealth was aware that at least one of its agents was forging signatures on Medicare Advantage enrollment forms to make it appear that the company had more members than it actually did and generate more revenues. It says that another agent was offering kickbacks to get people to sign up for a Medicare Advantage plan.

    UnitedHealth allegedly hid these activities and hundreds of member complaints filed against it in order to keep its high Medicare ratings, which we have previously reported are not to be trusted. (You can read our post here: Medicare star ratings of Medicare Advantage plans a farce.)  It reported only 257 of 771 serious complaints in its files. By hiding these quality indicators, UnitedHealth also collected $1.4 billion in quality bonuses from Medicare.

    The whistleblower suit by James Mlaker and David Jurczyk claims that UnitedHealth kept two databases, one with the full set of complaints and one with an abbreviated list of complaints that it shared with the Centers for Medicare and Medicaid Services. It further claims that UnitedHealth either dismissed serious complaints or otherwise discounted them to mislead Medicare.

    Aside from these and other allegations of fraud and other misconduct, the Medicare Payment Advisory Commission (MedPAC) has found that Medicare Advantage plans are less cost-effective than traditional Medicare. Taxpayers continue to spend more per person in Medicare Advantage plans than in traditional Medicare.

    Here’s more from Just Care:

  • Medicare Advantage plans bilking Medicare

    Medicare Advantage plans bilking Medicare

    Since its inception in 2002, Medicare Advantage, a program that allows private health insurers to contract with the government to provide Medicare benefits, has always cost the federal government more per person than fee-for-service Medicare. Over the last 15 years, not only have MedicareAdvantage plans not saved government money, but there’s strong evidence that these largely for-profit health care plans have been bilking the government of billions of dollars.

    A whistleblower and former executive of UnitedHealth Group sued his former employer and 14 other Medicare Advantage plans in 2011 under the False Claims Act for playing with the health care records of their members in order to improperly inflate their Medicare payments. In an interview with the New York Times, Benjamin Poehling, a Finance Director at UnitedHealth, alleges that he made big bonuses the sicker he could paint UnitedHealth members and the more money he could bring to the company from Medicare.

    The Poehling lawsuit was under seal until recently. And, it was one among many lawsuits that whistleblowers have filed alleging this type of fraud. In this case, the Justice Department has said it intends to sue UnitedHealth Group, giving the fraud claims greater weight. The Justice Department is also investigating Aetna, Humana, Health Net and Cigna.

    According to the New York Times, some experts believe that the Medicare Advantage plan overcharges could amount to as much as $10 billion a year.

    The government pays health plans more for sicker patients as a way to reward them for providing care to people with serious conditions. Medicare Advantage plans have always marketed their services to healthy people and never promoted their services to people with complex and costly conditions. They make more money providing little or no care to people and collecting a base fee from Medicare of around $10,000 a year per member.

    That said, Medicare Advantage plans must provide care to their members in poor health. In these cases, Poehling charges, the health plans find ways to charge the government more than they should for their care.  The Government Accountability Office, GAO, reports that the Centers for Medicare and Medicaid Services found that in 2013 alone, it wrongly paid Medicare Advantage plans $14.1 billion, largely because of wrongful upcharges.

    Meanwhile, UnitedHealth is suing the federal government to vacate a 2014 rule that requires Medicare Advantage plans not to exaggerate the diagnoses of their members.

    Here’s more from Just Care: