JustCare

Tag: Denial

  • Health insurers increasingly deny coverage for critical care

    Health insurers increasingly deny coverage for critical care

    Elisabeth Rosenthal writes for The Washington Post on the rising rate of health insurance denials.  High denial rates are not surprising given that health insurers generate greater revenues on each claim they deny. Consequently, they often use proprietary computer algorithms to deny claims in a systematic fashion, with no regard for people’s medical needs.

    Since the Affordable Care Act, health insurers can no longer refuse to cover people with pre-existing conditions in many instances. Instead, to maximize profits, they find ways to deny care. Rosenthal highlights how one insurance company literally has as a job title “denial nurse.”

    Although the US Department of Health and Human Services is charged with overseeing insurance company denials, it has not undertaken its oversight responsibilities in a meaningful way. Rather, too often, patients are faced with care denials and the obligation to pay for their care themselves or skip getting care altogether.

    The Kaiser Family Foundation (KFF) recently reported that, in 2021, one in six claims for in-network care in the state health insurance exchanges were denied, 17 percent. In one case, the insurer denied half of all claims, 49 percent! Worse still, another insurer denied four in five claims, 80 percent. And, while insurers reverse the majority of denials when people appeal, patient appeal rates are extremely low–one in 500.

    At times, denials are not only medically incomprehensible but nonsensical. For example, one patient with arrhythmia had his insurer’s approval for a heart procedure, but he was denied coverage “for injections into nerves in your spine,” which he had not received. The insurer had not paid the claim many months later, notwithstanding endless attempts to fix the error.

    In another instance, the insurer wrote a newborn to let the baby know that his neonatal care was denied because the baby could drink from a bottle and breathe on his own. Of course, the baby could not read the denial! And, an insurer denied coverage for epinephrine and steroids received in the emergency room to treat a young man with a deadly anaphylactic allergic reaction, which the insurers claimed was medically unnecessary. Though the patient’s mother has appealed, she still has not gotten the insurance to cover the services.

    Increases in insurer denial rates are likely a product of a computer system, PXDX, which I wrote about here, that allows insurers’ medical claims-review staff to deny 50 claims in ten seconds. This system saves insurers billions of dollars a year, at the expense of the health and well-being of their enrollees.

    To add insult to injury, claims can be denied because an insurer does not have a contract with a particular drug or device manufacturer. It doesn’t matter that the patient needs the treatment.

    Of course, these denials are also happening in Medicare Advantage plans. And, the Centers for Medicare and Medicaid Services (CMS) is not reporting plan denial rates to enable people to avoid plans with high denial rates. In fact, most likely, those plans are getting four and five-star ratings, because the rating system is such a farce! (You can read about why the Medicare Advantage star-ratings are a farce here.)

    The Affordable Care Act gives health insurer oversight responsibilities to HHS and requires HHS to collect and publicly report denial rates among corporate health insurers in the state health exchanges. But, HHS has not undertaken this data collection and reporting, as required. So, after more than a decade of failed government oversight, the insurers continue to deny claims with impunity.

    Here’s more from Just Care:

  • Medicare Advantage could be the death of Medicare

    Medicare Advantage could be the death of Medicare

    In an op-ed for The Nation, Ady Barkan, co-director of Be a Hero, makes the compelling case that Medicare Advantage, the part of Medicare administered by private health insurers, could be the death of Medicare. It could also be the death of guaranteed affordable health care for all in the US. Senator Bernie Sanders, Representative Pramila Jayapal, and Representative Debbie Dingell are trying to prevent that and breathing continued life into Medicare through their recent introduction of the Medicare for All Act in Congress, legislation that would keep corporate health insurers out of Medicare.

    Several times in the last 70 or so years, progressive policymakers have tried to ensure everyone in the US has guaranteed access to affordable health care. And, several times, their efforts failed. Most recently, advocates on the ground and in the Congress pushed for a public health insurance option, like Medicare, for all Americans. Instead, we got the Affordable Care Act, health insurance through corporate health insurers.

    During his campaign for the presidency, Senator Bernie Sanders brought to national attention the value of Medicare for All, guaranteed, government-administered, affordable health insurance. He called for an improved and expanded version of traditional Medicare that the US guaranteed everyone, with dental, vision and hearing benefits, and without premiums, deductibles and copays.

    Ady Barkan testified in the US House of Representatives on the value of Medicare for All. He understood its value full well. At 35, he was diagnosed with ALS. He explained how everyone will need health care at some point.

    “Our time on this earth is the most precious resource we have,” were his words. “A Medicare for All system will save all of us tremendous time. For doctors and nurses and providers, it will mean more time giving high quality care. And for patients and our families, it will mean less time dealing with a broken health care system and more time doing the things we love, together.”

    Barkan interviewed all the presidential candidates on Medicare for All and then sat down with President Biden to discuss health care. At the time, Barkan supported Medicare for All but did not appreciate that corporate health insurers had sunk their teeth into Medicare through the Medicare Advantage program. Now, he recognizes that if corporate health insurers take full hold of Medicare, it is not likely we will get government-administered Medicare back.

    The argument for Medicare Advantage when Congress debated it in the early 2000’s was that it would improve quality and save money through “managed care.” But, 20 years later, Medicare Advantage has always cost more per enrollee than traditional Medicare. And, several analyses show that quality of care, particularly for people with costly and complex conditions tends to be worse in Medicare Advantage than in traditional Medicare.

    Because the federal government pays corporate health insurers upfront for the care they provide, regardless of the amount they spend on care, the insurers do what they can to spend as little of that money on people’s care as possible. The less they spend, the more they profit. The consequence for enrollees can be deadly–delayed and denied care, lack of access to top quality specialists and specialty hospitals and unaffordable out-of-pocket costs.

    Medicare Advantage has become big business. Every business wants in and wants more. The insurance companies offering Medicare Advantage are buying up primary care providers in order to help control the care that people receive. To be sure, in the best of hands, this could be great. But, in the hands of corporate executives who are looking to return as much money to shareholders as possible, you can imagine the danger.

    The corporate health insurer execs are likely dreaming of a time when Congress passes Medicare Advantage for All, a time when they control the full Medicare market and the hundreds of billions of dollars that come with it. Americans should be extremely concerned.

    Without traditional Medicare in the mix, putting competitive pressure on the Medicare Advantage plans, without the tens of billions in excess payments to the Medicare Advantage plans, and without any freedom for enrollees to disenroll from Medicare Advantage, all bets are off on health care costs and coverage for older adults and people with disabilities, all bets are off on their health and well-being.

    Fortunately, members of Congress are beginning to understand the fundamental differences between traditional Medicare and Medicare Advantage. They are holding hearings focused on abuses in Medicare Advantage–overpayments, inappropriate delays and denials, misleading marketing and ghost networks, among others. And, the Biden administration is passing regulations in an attempt to rein in the bad actor Medicare Advantage plans.

    Unfortunately, the regulations are only as good as the government’s ability to enforce them. And, enforcement has been lax, to put it mildly. As of now, the Medicare Advantage plans that are engaged in keeping their enrollees from getting costly care can continue to do so, with impunity.

    If we are going to guarantee Medicare for All, free or low-cost access to good care in the US, we must keep the corporate health insurers from taking over Medicare.

    Here’s more from Just Care:

  • Cigna denies medical claims with a “click and submit”

    Cigna denies medical claims with a “click and submit”

    A new Pro Publica report finds that Cigna’s physicians reject millions of their enrollees’ treating physicians’ insurance claims “on medical grounds” each year, without even looking at them. Other major insurers appear to do exactly the same thing. It seems that Cigna and other corporate health insurers see no need to spend money determining whether claims should be paid when they can refuse to pay and save billions of dollars.

    Whatever you think about government-administered insurance, like Traditional Medicare, the government defers to the treating physician to determine whether care is reasonable and necessary and should be covered. But, unlike the government, corporate health insurers come between patients and the care their treating physicians recommend for them. Denying care means maximizing profits; the less they spend on care, the more of the premium dollars they are able to keep for their shareholders.

    The Pro Publica report confirms that the insurers take little time, less than two seconds, when deciding whether to pay certain claims even though, in many instances, these claims are for medically reasonable and necessary services that should be paid.  “We literally click and submit,” one former company doctor said. This behavior would appear to be forbidden under state and federal laws.

    Under both state and federal laws, the insurance company doctors are required to “review” all claims to determine whether they should be denied or not. “Medical directors are expected to examine patient records, review coverage policies and use their expertise to decide whether to approve or deny claims,” according to regulators. The goal is to minimize inappropriate denials. Still it appears that Cigna and other insurers believe that physician reviewers can determine whether a claim is covered without looking at patients’ files.

    “Why not deny claims?” seems to be the mantra of some corporate health insurers, if not most of them. They face no penalty for high rates of inappropriate denials. Instead, these insurers burden patients and physicians with having to appeal if they want to be paid. And, the insurers know that in 95 percent of cases, the physicians and patients won’t appeal.

    Only five percent of the time do patients and physicians appeal the insurance company denials. It’s easier for the physician to stop performing the procedures that the insurers deny, even when the patients need them. And, the patients often do not know that it’s generally relatively easy to appeal, they can do it themselves and they have a high likelihood of winning on appeal, if only after many months. Even when they do know they could win on appeal, people might not have the time, energy or ability to file an appeal.

    The Pro Publica story focuses on patients with employer coverage. But, you can bet your bottom dollar that the health insurers use the same tools to reject claims of people in Medicare Advantage plans–the corporate health plans that contract with the government to offer Medicare benefits–as they do for people with employer coverage. So, if you’re in a Medicare Advantage plan and you need costly services, don’t be surprised when your health plan denies coverage for the medically necessary care your treating physician believes you need.

    Here’s more from Just Care:

  • Medicare Advantage plans use AI to deny care

    Medicare Advantage plans use AI to deny care

    Bob Herman and Casey Ross report for StatNews on Medicare Advantage plans’ use of Artificial Intelligence (AI) to deny life-saving and quality-improving services to their enrollees needing costly care. Without appropriately taking account of patients’ individual health status, Medicare Advantage plans restrict needed nursing home care and physical therapy, as well as delay critical cancer care and more. The more they do, the more they profit.

    In one case, Security Health, a Medicare Advantage plan refused to cover more than 17 days of nursing home care for an 85 year-old woman with a fractured shoulder and uncontrolled severe pain. The Medicare Advantage plan said she could go home, even though it was clearly unsafe for her to do so. She could not perform any activities of daily living without assistance, and she lived alone.

    More than a year later, a federal judge found that Security Health was liable for the additional three weeks of nursing home care the woman had to pay for out of pocket. She had precious little means to do so and was forced to spend her limited savings down to the point where she qualified for Medicaid. Given how relatively few people appeal Medicare Advantage denials, Security Health and other Medicare Advantage plans make out like bandits restricting care.

    STAT’s investigation found that these inappropriate denials are growing as a result of AI. That should be expected. Medicare Advantage plans face no penalty for these types of egregiously inappropriate denials. Instead, enrollees face serious penalties, forced to pay for life-sustaining care out of pocket or to go without.

    The federal government is not overseeing the algorithms the AI uses to deny and delay care inappropriately, particularly for people who are very sick. The patients can appeal the denials, but that can take years. Often, by that time, the patients have died or suffered gravely.

    You can only imagine who is programming the algorithms and what these programmers are directed to do when they do the programming. The MA plans want as many denials and delays as possible to maximize their profits. They seem to treat enrollees like widgets, rather than as individuals with unique needs.

    We do not know how many MA plans use AI to make medical necessity determinations, but we do know that most of the largest ones do, including UnitedHealth Group, Elevance, Cigna, and Aetna/CVS Health. The biggest company offering AI services to MA plans is NaviHealth, which UnitedHealth now owns.

    NaviHealth, for its part, claims its AI algorithms do not make coverage determinations, but simply are used to let physicians and other health care providers know about their patients’ care needs. And, yes, the sky is green.

    The Stat reporters point out that the FDA must approve AI products that are designed to detect cancer or recommend treatments. But, the Medicare Advantage plans can use whatever AI tools they please to decide whether care is warranted and to pay for a procedure. Not surprisingly, MA plans deny care that is covered in traditional Medicare–which they are required to cover–often without speaking with the patient’s treating physicians.

    In one instance, a Medicare Advantage plan denied a stroke patient rehabilitation care. Yet, the patient couldn’t feed himself. He had signed up for a Medicare Advantage plan, wrongly assuming it would cover the care he needed.

    Several years ago, when the government decided to pay a fixed upfront fee for post-acute services, such as nursing home care, it  gave the providers an incentive not to overtreat, saving the government money. But, it also gave these providers an incentive to undertreat. The less care they offered, the more of the upfront money they could keep for themselves.

    NaviHealth works with many Medicare Advantage plans. It promises to “manage” enrollees’ care post hospital discharge. If it saves the Medicare Advantage plans money, it shares in the savings. Talk about an incentive for NaviHealth to focus on cost-savings and not quality improvement or good health outcomes.

    Christina Zitting, a hospital case management director in Texas, reports that “NaviHealth will not approve [skilled nursing] if you ambulate at least 50 feet. Nevermind that you may live alon(e) or have poor balance,” “MA plans are a disgrace to the Medicare program, and I encourage anyone signing up..to avoid these plans because they do NOT have the patients best interest in mind. They are here to make a profit. Period.”

    The Medicare Advantage plan nursing home denials appear to be largely inappropriate, with most denials that are appealed, overturned. Even when Medicare Advantage plans approve nursing home stays, Medicare Advantage plans usually only cover care for 14 days, even though Medicare covers up to 100 days.

    The Centers for Medicare and Medicaid Services, which oversees Medicare, proposed new rules which would prevent Medicare Advantage plans from denying coverage “based on internal, proprietary, or external clinical criteria not found in traditional Medicare coverage policies.” If those rules are finalized, it’s not clear that the Medicare Advantage plans could use NaviHealth or any other AI tool to deny care.

    But, again, the Medicare Advantage plans claim they are not using NaviHealth to deny care, only to guide coverage decisions. And, the CMS rule if finalized would still permit the Medicare Advantage plans to have internal coverage criteria if based on generally accepted treatment guidelines that are public. The insurers’ opposition to the proposed rule made the case that the government needed to give them “flexibility to manage post-acute care.”

    One relative of a Medicare Advantage enrollee who was denied needed nursing home care reports: “I’ve still got friends who say, ‘Oh, I’ve got UnitedHealthcare Advantage, and it’s wonderful.’” “Well, it is,” she said. “Until you need the big stuff.’”

    Here’s more from Just Care:

  • Medicare Advantage enrollees face higher likelihood of hospital care denials

    Medicare Advantage enrollees face higher likelihood of hospital care denials

    Paige Minemyer reports for Fierce Healthcare that hospitals treating Medicare Advantage enrollees faced a higher likelihood of claim denials last year than the year before. Medicare Advantage plans, administered by private health insurers, use tools that limit coverage for inpatient hospital care more often than traditional Medicare.

    In 2022, there was an 18.5 percent increase in Medicare Advantage hospital inpatient claim denials over 2021. All in, the Medicare Advantage plans denied nearly six percent of inpatient claims. People in Medicare Advantage plans won’t have to pay for care that their Medicare Advantage plans deny but, because of these denials, they are likely to face more instances in which hospitals refuse to provide them with the care their doctors say they need; the hospitals need to protect themselves financially.

    The Medicare Advantage inpatient claim denials can hit hospitals hard. They are not getting paid for the services they delivered. As a result, they also affect the care patients in Medicare Advantage receive. The hospitals can appeal the denials and likely win, if they are willing to expend the time and energy. However, the hospitals’ easiest response to these denials is to not provide the care they believe their patients need.

    Hospitals that deliver care to Medicare Advantage patients that the Medicare Advantage plans don’t end up paying for have to eat the bill. In 2022, hospitals wrote off 8.5 percent of revenue. Few hospitals can afford to do that. The 8.5 percent write off is nearly 4 percent more than in 2021, when they wrote off 4.7 percent.

    Last year, hospitals wrote off a total of nearly 6 percent of inpatient revenue. In 2021 they wrote off 3.6 percent of inpatient revenue.

    Here’s more from Just Care:

  • Medicare Advantage plans denied two million prior authorization requests in 2021

    Medicare Advantage plans denied two million prior authorization requests in 2021

    Imagine that you were given a wad of cash to deliver a service when necessary. And, it was in your discretion to determine when the service was necessary. That’s effectively the way Medicare Advantage works, with the federal government giving Medicare Advantage plans, health plans offering Medicare benefits, an upfront monthly payment and the discretion to decide when care is medically necessary.  Not surprisingly, the Kaiser Family Foundation has just determined that, overall, health plans offering Medicare Advantage denied two million of 35 million prior authorization requests in 2021, for services treating physicians determined were needed.

    Put differently, across the spectrum of nearly 4,000 Medicare Advantage plans, six percent of requests for authorization of services were denied. The Medicare Advantage plans hire physicians to assist them in withholding or delaying care. They often are not specialists in the area of care they are reviewing. On appeal, the vast majority of denials were fully or partially overturned. But, only a tiny fraction of denials were appealed.

    Anthem, Humana and Centene had the highest percentage of prior authorization requests. But, CVS, Kaiser and Centene denied the highest percentage of requests, 12 percent, 12 percent and 10 percent respectively. What we don’t know is which types of services were most frequently denied. Kaiser explains that it could not answer these questions because CMS does not make this information available. It might not even collect it.

    Anthem Medicare Advantage plans received the most requests for prior authorization, nearly three for each of its enrollees. Kaiser Permanente received 0.3 requests for each of its enrollees. Centene and CVS overturned the overwhelming majority of denials that were appealed.

    The data does not reveal the reasons that Medicare Advantage plans most frequently deny prior authorization requests. A recent Pro Publica report on United Healthcare’s practices suggest that, if a service is particularly expensive, some Medicare Advantage plans are probably more likely to find a doctor to deny the service regardless of how critical it might be to a patient’s health and well-being. A recent report from the Office of the Inspector General at the Department of Health and Human Services found that costlier services, such as nursing and rehab, are more likely to be denied.

    What should you do to protect yourself from Medicare Advantage plans that inappropriately deny or delay care? If you enroll in Traditional Medicare and have supplemental coverage–either Medigap, which you buy in the individual market, Medicaid, or retiree coverage that fills gaps in Traditional Medicare–you can ensure coverage for the care your doctors say you need. If supplemental coverage is unavailable or unaffordable, sadly, the government forces you to gamble with your health.

    The Centers for Medicare and Medicaid Services, which administers Medicare, does little more than offer a seriously flawed and misleading five-star rating system to help you distinguish among Medicare Advantage plans. That system is not designed to help you avoid the Medicare Advantage plans that inappropriately deny care and other bad actors.

    Here’s more from Just Care:

  • Case study: Medicare Advantage delays, denials and consequences

    Case study: Medicare Advantage delays, denials and consequences

    Rick Timmins, a retiree in Washington State, reports the delays and denials he has faced trying to get care while enrolled in a Medicare Advantage plan in Washington State. The costs of these delays and denials have been substantial and the consequences severe. What’s worse is that he is locked in to Medicare Advantage, no longer able to switch to Traditional Medicare.

    Many people join Medicare Advantage when they turn 65 in order to save money on the supplemental coverage that is needed to protect themselves financially in Traditional Medicare. They also often save money on prescription drug coverage, which usually is included with Medicare Advantage. What people often don’t realize is that once they’ve been in a Medicare Advantage plan for more than a year, they have no right to buy Medicare supplemental coverage if they want to switch to Traditional Medicare, except in Connecticut, Massachusetts, Maine and New York.

    Rick Timmins had a rapidly growing painful lump in his ear. But, his Medicare Advantage plan made him wait five months before it authorized him to see a dermatologist. And, when the dermatologist referred him to a surgeon, the Medicare Advantage plan made him wait an additional two months.

    Timmins made countless calls to his Medicare Advantage plan to try to speed up the approval process. But, he could not get a straight answer as to why the prior authorization was taking so long. Customer service could not even find his prior authorization request.

    As it turned out, his Medicare Advantage plan had subcontracted the prior authorization to Optum, another company, without telling him. When he finally learned that this is what had happened, his Medicare Advantage plan could not provide him with Optum’s contact information.

    The Medicare Advantage plan’s website provided inaccurate information about his claims and out-of-pocket costs. He paid $6,570 out of pocket although his out-of-pocket costs were supposed to be capped at $6,500. And, the MA plan’s customer service staff could not explain the frequent claims denials for services he received at the cancer center or his financial liability.

    As a result of all these delays, Timmins’ lump, which turned out to be cancerous, grew larger and became a more aggressive tumor. He needed extensive surgery and immunotherapy over the course of a year to treat the cancer. All this additional treatment cost him more physically, financially and emotionally. He had a longer and painful recovery from a partial amputation of his ear and exploratory surgery in his neck.

    Timmins would like to switch to Traditional Medicare, but he can’t. Insurers offering supplemental coverage to fill gaps in Traditional Medicare will not sell him a policy. And, he does not have a right to it. He is locked in to Medicare Advantage for the rest of his life.

    Here’s more from Just Care:

  • Medicare Advantage: Beware of inappropriate nursing home stay denials

    Medicare Advantage: Beware of inappropriate nursing home stay denials

    Susan Jaffe writes for Kaiser Health News about the risk that your Medicare Advantage plan will inappropriately deny you the nursing home care you need. Because the government pays Medicare Advantage plans a flat upfront fee, they have a powerful financial incentive to keep you from getting the costly care you need. They profit more the less they spend on your care.

    No one is monitoring in real time when and how Medicare Advantage plans delay and deny nursing home care, or any other care for that matter. The government pays Medicare Advantage plans to cover the same amount of medically necessary care as traditional Medicare covers. And, though the Medicare nursing home benefit is limited, it should cover as much as 100 days in a nursing home for people who have been hospitalized as an inpatient for at least three days in the 30 days prior to nursing home admission and who need daily skilled nursing or therapy services.

    The Office of the Inspector General (OIG) reports that Medicare Advantage plans can and do stint on costly care, including nursing home care, even when your treating physician says it is medically necessary. And, the Centers for Medicare and Medicaid Services (CMS), the agency charged with overseeing Medicare, does not publicly identify the bad Medicare Advantage actors, let alone cancel contracts with those that engage in widespread inappropriate delays and denials of coverage, as some do.

    In her story, Jaffe reports on a 97-year old woman in a nursing home whose Medicare Advantage plan told her it was ending nursing home coverage after only an 11-day stay. Her medical team disagreed with the decision, saying that she was not in good enough health to return home. She had taken a bad fall. Experts report that it has become increasingly common for Medicare Advantage plans to overrule the treatment preferences of patients and their doctors and deny care, without even seeing the patient.

    The American Health Care Association has “significant concerns” about the behavior of Medicare Advantage plans. No question that people are better off in their homes when they are healthy and able to take care of themselves, as the Medicare Advantage plans argue. But, it’s unsafe to push vulnerable older adults out of a nursing home before they are in good enough shape to manage at home.

    If your Medicare Advantage plan denies you skilled nursing facility or rehab care that your medical team says you need, you have the right to appeal. With a letter from the medical team explaining why care is medically reasonable and necessary and why you meet the eligibility requirements for skilled nursing facility or rehab benefits, there is a very high likelihood the Medicare Advantage plan will reverse its decision. And, if it does not do so, you can appeal to a higher level authority, where you are likely to succeed on appeal.

    There is no cost to appealing a Medicare Advantage denial of coverage, and it’s easy. You will likely face bills from the nursing facility while your appeal is being decided. But, you can ignore the bills if you win your appeal, and you have a high likelihood of winning. The Medicare Advantage plan will have to pay. Unfortunately, your Medicare Advantage plan faces no penalty for inappropriate denials. So, it can continue to deny care inappropriately without any likely consequence.

    Here’s more from Just Care:

  • Ten ways to improve Medicare Advantage

    Ten ways to improve Medicare Advantage

    Dear Secretary Becerra and Administrator Brooks-LaSure:

    Social Security Works, Just Care USA and Center for Health and Democracy are delighted that the Biden Administration seeks to protect older adults, people with disabilities and the Medicare program from abuses in the Medicare Advantage program. We thank you for the opportunity to comment on ways to improve Medicare Advantage. We agree with the HHS Office of the Inspector General, Government Accountability Office and MedPac that Medicare Advantage is in need of major reform to ensure the health and well-being of enrollees, promote health equity, and minimize legal violations, Including overpayments. As GAO reported: “The Medicare program, which includes MA, is on GAO’s High Risk List, because of its size, complexity, and susceptibility to mismanagement and improper payments.”

    The health insurers offering Medicare Advantage plans have committed many hundreds of legal violations since 2000, and there is reason to believe these will continue unless the federal government overhauls Medicare Advantage. UnitedHealth Group, the company with the most MA enrollees, has paid nearly $600 million in penalties for 332 violations, 300 of which are for consumer protection-related offenses, since 2000. Humana, the second largest MA plan, has paid more than $77 million in penalties for 79 violations, 57 of which are for consumer protection-related offenses, since 2000. CVS Health, the third largest MA plan, has paid more than $1.6 billion in penalties for 463 violations, 236 of which are for consumer protection-related offenses, since 2000. 

    Today, the MA plans have too much incentive and opportunity for abuse. In September 2019, Senator Sherrod Brown, along with five other Senators, wrote CMS requesting answers to questions regarding key failings in Medicare Advantage. To our knowledge, three years later, CMS has not addressed any of the serious issues raised. Unless MA is overhauled on multiple fronts, including revising the way it pays them, Medicare Advantage plans will continue to undermine the integrity of the Medicare Trust Fund, harm health equity, and put millions of their enrollees at serious risk of harm.

    As soon as possible, CMS should stop misdirecting people to believe they can meaningfully choose a Medicare Advantage plan that meets their needs and that they can rely on a misleading star-rating system to choose among MA plans. CMS should:

    • Educate people about the high out-of-pocket costs in MA;
    • Educate people about MA plans’ torturous prior authorization rules;
    • Identify and publicly report the names of MA plans with high rates of delays and denials;
    • Identify and publicly report adjusted mortality rates per MA plan;
    • Terminate contracts with MA plans that are consistently delaying and denying care inappropriately, have high mortality rates, or otherwise are violating their contractual obligations. 

    People from racial and ethnic minority groups, people with disabilities and serious health conditions, people of disadvantaged socioeconomic status, people with limited English proficiency, and people from rural communities disproportionately choose Medicare Advantage because of its low upfront cost. They are, however, at greater risk in Medicare Advantage than in traditional Medicare for two key reasons: 

    Fundamental problems with the current Medicare Advantage model drive health inequities and poor health outcomes for people with complex conditions. The biggest problem is the risk-adjusted capitated payment model. Medicare Advantage plans that: 1. Attract a disproportionate number of enrollees in relatively good health and/or 2. Delay and deny care inappropriately and/or 3. Do not include high quality specialists and specialty hospitals in their networks, can be sure to profit handsomely. The risk-adjusted capitated payment model for MA plans not only hurt vulnerable populations, they drive up Medicare costs. 

    We propose a suite of ten changes to improve health equity, reduce Medicare Advantage threats, enable appropriate CMS oversight, and minimize health insurer violations in Medicare Advantage. 

    1. Change the way the government pays Medicare Advantage plans. 

    The government should pay MA plans so that they do not have a financial disincentive to cover care for people with costly and complex conditions. Prospective payments, unrelated to actual medical claims, create a powerful financial incentive for MA plans to impede access to high-value care for enrollees with complex conditions in order to maximize profits. This is particularly corrosive to health equity:

    • MA plans can maximize profits by enrolling a disproportionate number of people in good health and impeding care for people in poor health. This is one reason why MA plans seldom contract with Centers of Excellence and rarely, if ever, advertise or promote programs for people with costly conditions. 
    • MA plans can maximize profits by underpaying providers. The Texas Hospital Association has identified that “the rapid growth of Medicare Advantage enrollees threatens Texas’ health care safety net. For rural hospitals, Medicare Advantage causes financial instability on an already fragile provider community.” 

    In theory, a risk-adjusted capitated model would pay MA plans enough to cover the cost of services their members need. In reality, however, capitated risk-adjusted models can never ensure access to timely and good quality care for people with costly and complex conditions. In a world in which 50 percent of the Medicare population accounts for less than five percent of spending, such models wildly overpay for the healthy and significantly underpay for the sick.

    Capitated risk-adjusted models create a powerful incentive for Medicare Advantage plans to “cherry pick” the healthy enrollees and “lemon drop” the sick ones. Any Medicare Advantage plan that meets the needs of people with costly conditions — where demand for high-value care is the greatest — is at risk of attracting a disproportionately high percentage of enrollees with costly conditions and suffering financially. Ten percent of people with Medicare with the most serious conditions account for 60 percent of Medicare spending. It makes business sense for MA plans to do what they can to minimize costs from this population. Even good actors must engage in “cherry picking” and “lemon dropping” to ensure they remain financially afloat.

    2. Base payments to MA plans upon the cost of services MA plans cover plus a reasonable fee for administration and a global cap.

    Risk-adjusting capitation payments based upon an MA plan’s own proprietary assessment of the health of its enrollees creates a powerful financial incentive for the plans to “upcode” or attach as many diagnosis codes as possible to its enrollees. The more diagnosis codes, the higher an MA plan’s payments, and the greater the cost to the Medicare program. 

    Upcoding is not simply about bad actors. In order for “good guy” MA plans to compete with “bad guy” MA plans, the good guys are hard-pressed not to engage in upcoding. Otherwise, their competitors have more resources to offer reduced premiums and additional benefits, driving the “good guy” MA plans out of the market. 

    The Department of Justice has identified more than $100 billion of such inappropriate upcoding and overbilling at UnitedHealth Group, Humana, Cigna, Kaiser, Sutter Health and Anthem, among other insurers. It’s anyone’s guess how many additional billions of dollars in overpayments have gone undetected. As a result of upcoding, CMS is projected to overpay Medicare Advantage plans an estimated $600 billion between 2023 and 2031. 

    CMS should acknowledge that it does not have the tools or resources to ensure the diagnosis codes MA plans assign their enrollees are accurate, much less to recoup overpayments. 

    Risk-adjusted capitation adds additional administrative costs and profits to a fee-for-service model. More than 81 percent of MA plans pay all or nearly all their network providers on a fee-for-service basis. Traditional Medicare’s fee-for-service payment model is far more cost-effective and transparent than the MA capitated payment model. Researchers can see what’s working and not working in the health care system, unlike in MA, and drive system improvements. CMS should be building on that payment model.

    3. Require Medicare Advantage plans that pay providers on a fee-for-service basis to use traditional Medicare’s fee schedule. 

    Allowing Medicare Advantage plans to pay lower rates to providers jeopardizes access to care in MA and undermines health equity. Safety net providers serving vulnerable communities, in particular, have little if any leverage to contest MA plan rates and few resources to challenge inappropriate denials of care and coverage, undermining health equity. The Texas Hospital Association has identified that MA plans pay Texas hospitals well below the traditional Medicare rate, which undermines federal payment policies intended to ensure adequate reimbursement for rural hospitals. Medicare Advantage has caused some Texas hospitals to lose several hundred thousand dollars in revenue a year that they had received from traditional Medicare. 

    Conversely, allowing MA plans to pay higher rates than traditional Medicare creates an unlevel playing field with traditional Medicare and drives up Medicare spending needlessly. 

    4. Require MA plans to include all centers of excellence in their networks and disclose out-of-pocket costs for people with complex conditions.  

    The data suggest notable dissatisfaction among MA plan enrollees who need costly care. They disenroll from Medicare Advantage plans at disproportionately high rates in the last year of life and when medical costs are high. A 2021 GAO report suggests that these high disenrollment rates “may indicate potential issues with beneficiary access to care or with the quality of care provided.” In addition, rural enrollees have substantial rates of switching out of Medicare Advantage to traditional Medicare. The data also show widespread and persistent inappropriate delays and denials of care. 

    Until CMS moves away from a risk-adjusted capitated payment model, it must ensure that every MA plan meets the needs of people with the costliest and most complex conditions. Among other things, every MA plan should include all centers of excellence, such as NCI-designated Cancer Centers, in its network. And, rather than allowing MA plans to spend rebate dollars on additional benefits with no evidence of promoting health equity, CMS should consider establishing a mechanism for this money to go towards covering copays and deductibles for people with complex conditions so as to help ensure they are not forced to choose between their rent and their health care.  

    5. Standardize MA coverage rules and cost-sharing design.

    Even the most diligent people with Medicare have no way to select the MA plan that best meets their needs. Each Medicare Advantage plan structures its out-of-pocket costs and out-of-pocket limits in different ways, uses different medical necessity protocols, different referral and prior authorization requirements, designs different networks, and engages in different levels of inappropriate denials of care and coverage. Consequently, some Medicare Advantage plans could literally be harming their enrollees while others could be ensuring timely access to care and delivering good health outcomes. No one can meaningfully differentiate among these plans.

    These structural differences among MA plans, several of which can change at any time, could be disabling or even killing people with Medicare prematurely – and CMS itself would not know. These differences prevent CMS from both protecting enrollees and evaluating MA plans in a meaningful way. At the same time, they prevent people with Medicare from being able to compare MA plans on the most essential metrics. 

    Structural differences also make it all but impossible for CMS to undertake timely and effective audits of MA plans. CMS has not been able to complete timely MA audits from as far back as 2011. Without such audits, CMS cannot protect enrollees in MA plans or hold MA plans appropriately accountable for their bad acts in a timely fashion. CMS should acknowledge that it will never have the tools or resources to appropriately penalize MA plans for bad acts and protect MA enrollees without standardized MA design. 

    People with Medicare today are inadequately protected against proprietary and non-standardized MA policies that could jeopardize their health and well-being. The data show that CMS cannot effectively monitor them for poor outcomes. A 2022 OIG report, a 2018 OIG report, and endless news stories consistently show that Medicare Advantage plans too often inappropriately deny care that traditional Medicare would have covered and that the MA plans should have covered. CMS should require all MA plans to follow traditional Medicare coverage protocols and only allow evidence-based and transparent differences among MA plan protocols. 

    6. Ensure appropriate oversight of MA.

    CMS does not have the tools or resources to ensure appropriate Medicare Advantage oversight and protect enrollees under the current non-standardized model. Standardizing coverage policies would allow CMS to monitor MA plans more effectively and better protect enrollees. Standardized coverage protocols would help ensure MA plans covered medically necessary care and promoted health equity. 

    The GAO has found that CMS has not validated MA patient encounter data as needed and recommended. In a recent House Ways and Means Subcommittee on Oversight and Investigations hearing, MedPAC reported that “After a decade, MA plans are “not producing complete and accurate enough records needed for MedPAC to conduct oversight activities, to understand differences in service use between MA and FFS, to reflect utilization management techniques, and inappropriate denial of covered care.” 

    The failure of Medicare Advantage plans to turn over complete and accurate encounter data for analysis — as required by law — suggests these plans either lack the tools to collect the data or the ability to appropriately manage their enrollees’ care.

    7. Do not assume value in MA, since it cannot be measured. 

    MedPAC has said repeatedly that MA quality cannot be measured. “The current state of quality reporting in MA is such that the Commission can no longer provide an accurate description of the quality of care in MA. With 43 percent of eligible Medicare beneficiaries enrolled in MA plans, good information on the quality of care MA enrollees receive and how that quality compares with quality in FFS Medicare is necessary for proper evaluation. The ability to compare MA and FFS quality and to compare quality among MA plans is also important for beneficiaries. Recognizing that the current quality program is not achieving its intended purposes and is costly to Medicare, in its June 2020 report the Commission recommended a new value incentive program for MA that would replace the current quality bonus program.” Medicare Advantage plans’ higher per enrollee costs than traditional Medicare suggest Medicare Advantage offers less value than traditional Medicare. 

    We know that MA plans spend less money on medical care than traditional Medicare. But, we do not know to what extent they are failing to cover appropriate medically necessary care that traditional Medicare covers. Moreover, industry data on 2018 hospital stays and emergency room visits reveal that Medicare Advantage appears to have greater inpatient use and emergency room visits than traditional Medicare. In a review of the Medicare Advantage studies, Agarwal and colleagues find “the evidence on readmission rates, mortality, experience of care, and racial/ethnic disparities did not show a trend of better performance in MA plans than traditional Medicare, despite the higher payments to MA plans.”

    Assessing MA plan quality is critical for the health and well-being of MA enrollees. Given the poor performance of some MA plans with four and five-star ratings and no information from CMS on bad actors with these ratings, people are at risk of worsened health outcomes if they choose the wrong MA plan. One MA analysis in NBER found that if CMS cancelled contracts with the worst performing five percent of MA plans, it would save 10,000 lives a year.

    To protect people from misleading quality information, CMS should revise its star-rating system, as proposed by MedPAC. It should also eliminate star ratings for all Medicare Advantage plans that do not release complete and accurate encounter data, as required. And, it should consider removing these MA plans from eligibility for the quality bonus program. 

    8. Rethink Medicare Advantage networks. 

    CMS should stop allowing Medicare Advantage plans, except those that are fully integrated health systems, to design their own provider networks and require them to cover care from all Medicare providers. Many if not most MA plans design their networks to minimize their costs and boost their profits to the detriment of the health and well-being of their enrollees. To our knowledge, no independent expert has ever demonstrated the value of a network in Medicare Advantage plans to people with Medicare or the Medicare program other than those in fully integrated health systems. Conversely, stories abound about Medicare Advantage narrow networks that jeopardize access to care and lead to poor health outcomes, particularly for vulnerable populations.

    If the principal reason for a provider network is to contain medical costs, there is no compelling justification for Medicare Advantage plan networks. MA plans generally piggyback off of Medicare rates, which are already relatively low. If MA plans negotiate even lower rates, there’s good cause for concern that providers in their networks are of lesser quality than in traditional Medicare. If the principal reason for a provider network is to ensure good integrated care, it is difficult to appreciate the value of MA provider networks (except in cases where the Medicare Advantage plan is a fully integrated health care system). 

    The risks to the health and well-being of MA enrollees of allowing MA plans to design their provider networks are grave. Compared to traditional Medicare, the data show that MA plans use lower quality home health agencies and nursing homes, and less frequently use higher quality hospitals. They often do not include NCI-designated Cancer Centers or Centers of Excellence. In 2016, the Kaiser Family Foundation found that only 15 percent of Medicare Advantage plans definitely included Cancer Centers and 41 percent definitely did not.

    Plan networks are often so narrow as to delay or prevent people from accessing needed care. They also often undermine continuity of care. And, many MA plans have never had accurate network directories. Plan provider directories are too often misleading and inaccurate. Without accurate directories, network adequacy cannot be established. 

    Moreover, GAO reports that CMS does not assess provider availability to the extent it oversees network adequacy. This failure undermines health equity. Vulnerable older adults and people with disabilities are more likely to go without care when networks are narrow and accessing care with network providers requires significant time and travel.

    We urge CMS to acknowledge that it has neither the tools nor the resources to ensure network adequacy and promote health equity. A 2015 GAO report found “that CMS’s oversight did not ensure that MAO networks were adequate to meet the care needs of MA enrollees. For example, we found that CMS did not adequately verify the accuracy of provider network information submitted by MAOs, and accordingly could not verify whether MAO networks were in compliance with the agency’s provider network criteria.” In June 2022, GAO stated that its recommendations to address these issues “had not yet been fully implemented.”

    To promote health equity, protect people from misleading MA marketing regarding network providers, and ensure access to and continuity of care, CMS should consider requiring MA plans, except fully integrated health systems, to cover care from all Medicare providers. At a minimum, CMS should require those plans that do not keep their directories up to date to open their networks to all Medicare providers. 

    9. Rethink key consumer information regarding Medicare Advantage and overhaul MA marketing to minimize deception. 

    CMS should ensure that people enrolling in a Medicare Advantage plan are able to identify which of those plans are the bad actors, if not cancel contracts with these bad actors. Allowing these bad actors to continue offering MA plans endangers the health of the most vulnerable people with Medicare and undermines health equity.

    CMS also should ensure that no one enrolls in Medicare Advantage without understanding the financial and administrative barriers to care. A recent Center for Medicare Advocacy report found that even the “Medicare and You Handbook” and Medicare website do not explain out-of-pocket costs or prior authorization requirements in a balanced fashion. 

    CMS reported a doubling of MA marketing complaints in the year between 2020 and 2021. Too often people with Medicare have little clue what they are doing when they enroll in a Medicare Advantage plan. CMS’ review of sales calls showed significant confusion among people with Medicare, including “that the beneficiary may be unaware that they are enrolling into a new plan during these phone conversations.”  Of those people who understand differences between traditional Medicare and MA, few appreciate the risks of enrolling in a Medicare Advantage plan.

    10. Level the playing field with traditional Medicare and ensure health equity in MA.

    We urge the government to put an out-of-pocket cap in traditional Medicare so that traditional Medicare is a meaningful choice for everyone with Medicare, including people with low incomes, people in rural communities, people from racial and ethnic minority groups, and people with complex conditions. Without that out-of-pocket cap, the hundreds of thousands of people who face inappropriate delays and denials of care in Medicare Advantage too often are deprived a meaningful choice of traditional Medicare. If they elect traditional Medicare, they expose themselves to too much financial risk because supplemental insurance is unavailable or affordable for them. 

    CMS should consider allowing people in MA to have supplemental coverage that picks up all out-of-pocket costs. Right now, too many enrollees, particularly the most vulnerable, are skipping or delaying critical care because they cannot afford the deductibles and copays, creating substantial health inequities. One NBER study found that a copay increase of as little as $10.40 resulted in thousands of needless deaths. Supplemental coverage would allow people to better budget for their care. Out-of-pocket costs jeopardize the health and well-being of enrollees, with particularly poor outcomes for Latinx and BIPOC communities. In addition, out-of-pocket costs present a large barrier to care for people with low incomes.

    Conclusion

    Medicare Advantage would be significantly improved by:

    • overhauling the Medicare Advantage payment system,
    • meaningfully disclosing MA encounter and other data,
    • holding accountable those MA plans that violate their contracts, 
    • standardizing coverage policies and provider rates, including prior authorization policies, 
    • requiring a broad Medicare provider network, and 
    • overhauling Medicare Advantage marketing practices. 

    Without these reforms, the federal government puts the lives of the most vulnerable people with Medicare enrolled in MA at serious risk and threatens the integrity of the Medicare Trust Fund. It wrongly drives up Medicare Part B premiums for people in traditional Medicare. 

    Traditional Medicare would benefit from some improvements as well, including an out-of-pocket cap on Part A and B benefits and coverage of dental, hearing, vision and long-term care benefits. CMS also needs to end its Direct Contracting/ACO REACH experiment, which involuntarily assigns vulnerable people with Medicare to entities paid upfront to manage their care and is riddled with many of the same grave problems as Medicare Advantage. That said, traditional Medicare generally still provides easy access to necessary care at substantially lower cost than Medicare Advantage, and CMS should ensure that it is a meaningful choice not only for the wealthiest people with Medicare but for everyone with Medicare. 

    We look forward to working with CMS on Medicare improvements. Thank you for this opportunity to share our thoughts. For questions, please contact Diane Archer at [email protected]. 

    Signed,

    Diane Archer, President, Just Care USA

    Alex Lawson, Executive Director, Social Security Works

    Wendell Potter, President, Center for Health and Democracy

  • 2022: Medicare Advantage facts and figures

    2022: Medicare Advantage facts and figures

    The Kaiser Family Foundation just released a report on Medicare Advantage facts and figures for 2022. The report shows no additional premiums for most people in Medicare Advantage (MA), the private health insurance option for people with Medicare. But, it comes on the heels of reports from the US Department of Health and Human Services’ Office of the Inspector General, Government Accountability Office and MedPac detailing key failings with Medicare Advantage that drive up Medicare spending and threaten the health and well-being of enrollees.

    There’s reason that people enroll in MA. Sixty-nine percent of people with Medicare Advantage get the Medicare Part D prescription drug benefit at no additional cost to them. They are in 0 premium Medicare Advantage plans. But, the more important question is: Are they covered for the care they need when they need it? Or, do they pay more for their care than they would in traditional Medicare with supplemental coverage, and  do they pay more for their drugs when they need them than people in traditional Medicare who pay a separate premium for Medicare Part D coverage?

    While there’s no denying that Medicare Advantage has lower upfront costs than traditional Medicare, there’s also no denying that they too often inappropriately delay and deny care. In other words, join a Medicare Advantage plan and you might go without needed care or have to pay out-of-pocket for the full cost of that care. We don’t even know which Medicare Advantage plans are the worst offenders, so there’s no way to avoid them. Do not be misled by the government’s star ratings.

    Even for services that Medicare Advantage plans cover, maximum out-of-pocket costs can be twice or even three times as much as you would spend for care in traditional Medicare with supplemental coverage. Medicare Advantage plans have an out-of-pocket limit in 2022 that averages $4,972 for HMOs and $9,245 for PPOs. And, Kaiser reports that if you need seven days or more of hospital care, you are more likely to incur higher out-of-pocket costs in a Medicare Advantage plan than in traditional Medicare.

    Most Medicare Advantage plans require you to get their prior authorization before they will cover a wide range of services that your doctor might say you need. Indeed, virtually all specialty services and medical equipment require prior authorization in most Medicare Advantage plans. Prior authorizations are a way for Medicare Advantage plans to keep utilization down and can lead to inappropriate delays and denials of care and coverage, as the Office of the Inspector General has found.

    Notwithstanding the restrictions in access to care in Medicare Advantage, people often opt for this coverage because they offer additional benefits and low upfront costs. For example, you might be able to get some vision, hearing and dental coverage if you can afford the copay and use their network providers. But, Medicare Advantage plans have never disclosed medical service usage data for these additional benefits, and it appears that enrollees who join because of these benefits often do not get them because of high out-of-pocket costs.

    The government has done a poor job of collecting information on use of medical services and out-of-pocket spending in Medicare Advantage. Until we have meaningful data that is publicly reported, anyone who joins a Medicare Advantage plan is taking a gamble with their health and well-being should they develop a serious condition.

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