Tag: GAO

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:
- Copays and deductibles impose a financial barrier to care, forcing the most vulnerable MA enrollees to go without needed care;
- Referral and prior authorization requirements, narrow networks, and widespread and persistent inappropriate delays and denials of care and coverage endanger care access for everyone, particularly vulnerable MA enrollees.
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
August 31, 2022
Government watchdog agencies tell Congress Medicare Advantage inappropriately restricts access to care and needs fixing
In a June 28, 2022 US House Energy and Commerce Oversight and Investigations Subcommittee hearing, representatives of the HHS Office of the Inspector General (OIG), Government Accountability Office (GAO) and Medicare Payment Advisory Commission (MedPac) told Congress in no uncertain terms that Medicare Advantage–Medicare Part C, which is administered through private health insurers–needs fixing. Medicare Advantage (MA) inappropriately restricts access to care that traditional Medicare covers.

Subcommittee members said that they believe it is of utmost importance that Medicare Advantage delivers people the Medicare benefits they need. Nearly 27 million older adults and people with disabilities are now enrolled in MA, costing taxpayers $350 billion a year. But, “some Medicare Advantage plans are not acting responsibly.”

People in Medicare Advantage are entitled to the same services as people in traditional Medicare, but they are not always receiving them. MA plans use their own internal criteria for determining whether a service is medically necessary. Some people face serious barriers to care, and some are being denied access to necessary treatment, according to the OIG. Medicare Advantage plans have found ways to game the system.

One critical problem is the way we reimburse Medicare Advantage. We pay them more if they report that their enrollees have more serious health conditions than people in traditional Medicare. So, to maximize revenues, Medicare Advantage plans send providers to enrollees’ homes to find more diagnoses codes for these enrollees, even though the Medicare Advantage plans provide no more care to them.

MA can use prior authorization as a way to ensure people do not get care they do not need. But, some MA plans impose inappropriate prior authorization requirements that are out of sync with standard medical practice. Too many providers must jump through hoops to get their patients needed care and to get paid for the care they provide.

Some MA plans deny care inappropriately at high rates; when claims are appealed, they are reversed 75 percent of the time. Not surprisingly, the GAO found that people disenroll from MA at twice the normal rate in their final year of life, when care is most critical and they need a lot of care.

As for quality of care, MedPac reports that the data on services Medicare Advantage plans provide their enrollees has been historically inadequate or difficult to substantiate. 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 government needs to penalize MA plans that have failed to provide complete and accurate data, as required.

There’s also no meaningful accounting as to whether people are using their supplemental benefits in Medicare Advantage, how much is being spent on these additional benefits, and whether they are delivered at a reasonable cost. More transparency is needed.

On top of that, according to MedPac, the Quality Bonus Program, through which the government rewards MA plans delivering better quality care, is fundamentally flawed.

Agencies representatives also said that private sector efficiencies have not reduced the cost of care. Moreover, the Centers for Medicare and Medicaid Services (CMS) is supposed to be auditing health plans and recouping overpayments. Audits have shown widespread overcharging among Medicare Advantage plans. But, CMS audits of MA plans are not timely. CMS has not completed audits from as far back as 2011.

In short, substantial MA reforms are rapidly needed. MA plan incentives are not adequately aligned with those of the people they serve or taxpayers. The Administrator of the Centers for Medicare and Medicaid Services declined to participate in the hearing, though she was invited, reports Fred Schulte of Kaiser Health News.

Here’s more from Just Care:
July 13, 2022
High proportion of people flee Medicare Advantage at end of life
The only question that matters when it comes to health insurance is whether it will meet your health needs when you have a costly and complex condition. Based on mounds of evidence, Medicare Advantage plans do not meet people’s costly care needs. A new Government Accountability Office report finds that a high proportion of people flee Medicare Advantage at the end of life–they go to traditional Medicare to provide them with the care they need.

In theory, Medicare Advantage plans are not allowed to restrict care to people with costly care needs. In practice, because they are paid a flat fee upfront to deliver care to people with Medicare and profit more when they do not spend money on care, they have every incentive to make it difficult to get costly care. And, they have the tools to do so–they choose the doctors and hospitals in their network, they design the copays and deductibles, they determine medical necessity, they decide when to delay and deny care–with virtually no oversight.

The HHS Office of the Inspector General, the Centers for Medicare and Medicaid Services, the Government Accountability Office, and independent health researchers from around the country have all found massive problems with Medicare Advantage when it comes to providing care and coverage to people with serious health conditions. But, to date, neither Congress nor the administration has acted to protect vulnerable older and disabled Americans enrolled in Medicare Advantage.

This new GAO study looked at people in Medicare Advantage during their last year of life. Much like other studies of people in Medicare Advantage with costly conditions, they found that people disproportionately disenrolled from Medicare Advantage because they struggled to get the specialty care they needed. As a result, Medicare spent a lot more money than it otherwise would have providing care to them. In 2017, payments for these people in traditional Medicare were estimated to be $490 million more than the Medicare Advantage plans would have received.

The flaw in the design of Medicare Advantage plans could not be more obvious. When you combine for-profit corporations with the upfront payments they receive to cover people’s care and no link between these payments and the care they cover, these health insurers have every incentive to avoid covering care for people with costly conditions. And, so long as they have little interest in making it easy for people with costly conditions to get high-value care, they present a huge risk to people with Medicare.

Here’s more from Just Care:
August 4, 2021
Who’s protecting older adults from financial exploitation
Every state has an agency that provides protective services to adults. These adult protective services agencies collect and report data on abuses, including financial exploitation. But, the GAO reports that the data collection and reporting is not what it needs to be to understand the scope of the problem nationally and help older adults, their families and society at large.

As you might imagine, older adults can be easy targets for financial exploitation by family, friends and unknown predators. There are so many types of scams. And, older adults might lose the mental acuity needed to manage their money without being scammed. Their judgment might be impaired because of dementia. But, with a good understanding of the biggest issues, interventions can be developed to help them.

Right now, state reporting of data to the US Department of Health and Human Services (HHS) is voluntary. According to the GAO, 11 states and territories out of 56 do not report any financial exploitation data at all. Fewer than half of all states, 24, provide HHS with detailed financial exploitation case data. And, only 27 provide detailed HHS with case data on the the type of perpetrator.

Without this data, the federal government does not have the needed information to devise strategies to minimize financial exploitation and develop interventions to improve the lives of abused and neglected older adults.

To be sure, states cannot collect complete information on financial exploitation of older adults. Many instances are not reported. Often older adult victims do not want to implicate family members. But, to the extent states have this data it is generally not easily shareable with the federal government and it should be.

Because complete and accurate national financial exploitation data is not available, we do not know the extent to which property and funds of older adults are illegally or wrongfully used. According to the Consumer Financial Protection Bureau, banks reported actual losses and attempts at elder financial exploitation totaling $1.7 billion in 2017. As high as that might seem, it appears it could be closer to $50 billion if complete data were collected everywhere in the country.

Recent studies in New York, Pennsylvania, and Virginia, however, suggest the cost is likely to be more than $1 billion in each state. The GAO recommends that HHS do more to ensure states report the information they collet. States tend not to submit data on the cost of financial exploitation of older adults to HHS because they do not feel the need to do so.

Here’s more from Just Care:
January 25, 2021
Major problems with Medicare Plan Finder
Not long ago, advocacy groups called out the Centers for Medicare and Medicaid Services (CMS) for misleading the public about Medicare Advantage plans–private insurance plans that offer Medicare benefits–and steering people into them without providing appropriate warnings. Now, the Government Accountability Office (GAO) has issued a report highlighting major problems with the Medicare Plan Finder web site, which is supposed to help people compare Medicare plans.

People should be able to know when they choose a Medicare plan what their out-of-pocket costs are likely to be and which doctors and hospitals they can use. But, the Medicare Plan Finder cannot provide them with this basic information. People with Medicare understandably struggle to get the information they need from the Medicare Plan Finder.

Estimates of out-of-pocket costs are incomplete on the Medicare Plan Finder, so people cannot make a meaningful comparison between traditional Medicare and Medicare Advantage. People need to know that their maximum out-of-pocket costs can be as high as $6,700 in a Medicare Advantage plan and far higher if they use out-of-network doctors and hospitals. But, the Medicare Plan Finder does not highlight these costs. It does not make it easy for people to see that if they want to spend time with a family member outside of their community and need care, they may have to pay for all their care out of pocket if they join a Medicare Advantage plan.

To find out whether the doctors and hospitals you want to use are in a Medicare Advantage plan, call them directly and ask. You can also visit the Medicare Advantage plan’s web site. Always call the plan to confirm. Medicare Advantage plan provider directories are wildly inaccurate. Provider information is not on the Medicare Plan Finder.

In traditional Medicare, people with supplemental coverage have minimal costs. If they do not have Medicaid or retiree benefits to provide this coverage, they need to buy this “Medigap” coverage. And, they need to know its cost and the specific benefits covered. That information is not available on the Medicare Plan Finder site.

Note, the Medicare Handbook is also misleading. Call your SHIP (State Health Insurance Assistance Program) for free help choosing a Medicare plan.

Medicare for All, an improved traditional Medicare, proposed by Senator Bernie Sanders and others, guarantees everyone coverage from virtually all doctors and hospitals, without premiums, deductibles and copays, or the need for supplemental coverage. It would save people money on their health care, without forcing them to give up the choice of doctors and hospitals they most value. As important, it would not force people to try to navigate a sea of rules and constantly changing health plans and guess whether there’s a health plan that may meet their needs. It also would not ration care based on ability to pay.

If you support Medicare for All, please let Congress know. Sign this petition.

Here’s more from Just Care:
August 6, 2019
Congress should level the playing field between traditional Medicare and Medicare Advantage
To protect people with Medicare and give them meaningful choice, Congress needs to level the playing field between traditional Medicare and Medicare Advantage. Unless traditional Medicare and Medicare Advantage offer the same benefits under the same terms, people cannot make a meaningful choice between them or protect themselves from Medicare Advantage plans that may threaten their health and safety.

In a previous post, I compiled information from the Office of the Inspector General (OIG), the Government Accountability Office (GAO) and the Centers for Medicare and Medicaid Services (CMS) revealing that some Medicare Advantage plans are threatening the health and safety of their members. But, we do not know specifically which Medicare Advantage plans remain a danger for people with Medicare. All we know is that CMS may award five-star ratings to ones it has found to jeopardize people’s health and safety, and MedPac currently finds these star ratings not trustworthy.

Yet, many people who want to leave their Medicare Advantage plans for traditional Medicare may not have that choice. A new Health Affairs paper by David Meyers et al., Brown University School of Public Health, reveals that people who want to leave their Medicare Advantage plan for traditional Medicare may not be able to buy supplemental coverage, Medigap, to fill coverage gaps. Because, unlike Medicare Advantage, traditional Medicare does not have an out-of-pocket cap, supplemental coverage is critical to protect people’s health and financial well-being.

The paper explains that people with higher health care needs are more likely to want to leave their Medicare Advantage plans. But, these same people are the ones least likely to be able to switch to traditional Medicare because it lacks a catastrophic cap and there is no guarantee they can buy supplemental coverage.

There are some federal protections that guarantee people the right to buy Medigap when they first enroll in Medicare and within one year of enrolling in a Medicare Advantage plan. But, other than during those times, in all but eight states, insurance companies selling Medigap coverage that fills gaps in Medicare can refuse to sell people this coverage or hike up premiums to the point that they are unaffordable.

The information from the Office of the Inspector General (OIG), the Government Accountability Office (GAO) and the Centers for Medicare and Medicaid Services (CMS) on the health and safety risk of Medicare Advantage plans is likely the tip of the iceberg. They have also found that more CMS oversight and audits of these plans is needed. Moreover, it appears that CMS has not been able to get Medicare Advantage plans to comply with federal regulations over several years.

To protect people with Medicare enrolled in Medicare Advantage, Congress should take immediate action. It should impose a cap on out-of-pocket costs in traditional Medicare as well as ensure that Medigap plans are all community-rated and guaranteed issue.

Here’s more from Just Care:
May 16, 2019
Medicare Advantage plan “honor system” can breed fraud
The federal government today pays commercial health insurance companies nearly $200 billion a year to provide Medicare benefits to the 20 million people now enrolled in Medicare Advantage plans. How these commercial health plans spend that money is largely hidden from public view. An opinion piece in StatNews makes the case that the “honor system” in which Medicare Advantage plans operate is one that can breed fraud.

Medicare Advantage plans, which are in the business of maximizing profits, have an incentive to spend as little as possible on patient care. The federal government pays them not based on the number of services they cover but rather a fixed or capitated rate per enrollee. What the Medicare Advantage plans don’t spend on patient care they get to keep. Not surprisingly, in 2018, the US Department of Health and Human Services Office of the Inspector General found widespread delays and denials of care in the Medicare Advantage program.

To maximize profits, Medicare Advantage plans also have an incentive to claim that their patients are in poorer health than they in fact are. That drives up health care spending and hurts taxpayers. Several False Claims suits have been filed against insurers for doing just that. Recently, HealthCare Partners Holdings LLC settled a lawsuit and paid $270 million. It had been charged with overstating the health needs of its Medicare Advantage enrollees. Another recent False Claims suit was filed against Sutter Health, a hospital system in California. It too was charged with overstating the health needs of its enrollees in order to generate higher government revenues and increase its profits.

The Centers for Medicare and Medicaid Services (CMS) estimates that as much as 10 percent of the money it pays Medicare Advantage plans–$16 billion in FY 2016–is improper. The Government Accountability Office reports that CMS is not using the appropriate tools to detect these improper payments, suggesting that overpayments to Medicare Advantage plans could be far higher.

The challenge is that CMS cannot easily detect fraud in these Medicare Advantage plans given the cloud of secrecy in which they operate. Usually, it takes a False Claims Act lawsuit by a whistleblower working at one of these companies to expose the fraud and lead the government to take action.

Here’s more from Just Care:
February 20, 2019
Avoid memory supplements
Today, there are about 80,000 dietary supplement products on the market, up from 4,000 25 years ago. Of those, some 500 are memory supplement products. The US Government Accountability Office (GAO) tested three of the most popular memory supplement products to determine whether they contained the ingredients listed on their labels. It found that two of the three did not and warns that they could be dangerous for older adults. Avoid memory supplements as they might contain unsafe ingredients.

For two of the three memory supplement products the GAO tested, the GAO found they did not contain Ginkgo biloba, even though it was listed as an ingredient on their labels, or the product contained far less than its label indicated. Rather, both memory supplement products contained an unknown substitute, and the GAO could not therefore vouch for the products’ safety. The third memory supplement product tested contained the fish oil and other ingredients listed on its label.

The GAO warns that heavy-metal contaminants in supplements, such as arsenic, cadmium, chromium, lead and mercury, can be dangerous to people’s health. They may cause cancer. Indeed there are many ingredients in supplements that can cause harm.

Notwithstanding the fact that supplements are largely unregulated, and they may contain ingredients that are dangerous to people’s health, supplements are a multi-billion dollar industry. Memory supplements, which are a tiny share of the supplement market, generated $643 million in sales in 2015.

Curiously, the government claims that it does not allow importation of prescription drugs because they may be unsafe, yet it allows the unfettered sale of supplements, which are likely to be more unsafe than drugs bought from verified pharmacies abroad. Moreover, though the FDA has authority to regulate dietary supplements, generally the FDA tends not to do so and, when it does, it is only after they go to market. The FTC has authority to regulate advertising of supplements but does precious little in that regard to ensure truth in advertising.

Here’s more from Just Care:
November 21, 2018
Are commercial Medicaid and Medicare plans a good taxpayer investment?
How do we know whether commercial Medicare and Medicaid health plans are a good taxpayer investment? Chad Terhune reports for Kaiser Health News that one non-profit commercial Medicaid health plan had “profits” of more than $344 million over three years. Why is this taxpayer money not being spent on the people with Medicaid enrolled in the health plan or going back to the state?

It appears that California Medicaid does not have systems in place to oversee its commercial Medicaid health plans. As a result California may be paying these health plans too much in taxpayer dollars. Or, California may not be ensuring that funds given to its Medicaid plans are being spent as they should be on their members. California is not alone. The federal government also has found Illinois, Kansas and Mississippi to be derelict in their oversight of their Medicaid health plans.

As one example of a health plan needing state oversight, Community Health Group is a San Diego California Medicaid plan that serves close to 300,000 low-income people, run by Norma Diaz, CEO, and Joseph Garcia, COO. It had a 19 percent profit margin or “surplus” in 2016, amounting to $344 million. The health plan had annual revenue of $1.2 billion. And, the CEO and COO earned $1.1 million in 2016.

Can the states get excess monies back from commercial Medicaid health plans? And, how good a job is the federal government doing of overseeing the commercial Medicare Advantage plans? Reports suggest that they too can be wrongly and grossly overpaid. The Government Accountability Office (GAO) reports that in 2013 alone CMS may have improperly paid $14.1 billion to Medicare Advantage plans because these commercial plans claimed their members had more serious health conditions than the evidence suggested.

Moreover, can a state or the federal government do anything about excessive compensation paid to staff at commercial Medicaid and Medicare health plans? One executive compensation consultant says that Diaz and Garcia are seriously overpaid. But, California’s head of the Department of Managed Health Care said that the state has no control over executive pay at these plans.

It is hard to believe that we are not wasting billions of taxpayer dollars on commercial Medicare and Medicaid plans every year. Wouldn’t we be better off relying on a government-administered plan, like traditional Medicare, which is far more cost-effective and accountable?

Here’s more from Just Care:
February 26, 2018
GAO: Drug prices continue to skyrocket
At the request of Senator Bernie Sanders and Congressman Elijah Cummings, the Government Accountability Office recently issued a report on pharmaceutical company profits and drug prices. The GAO found that drug spending has nearly doubled since the 1990s mostly because drug prices continue to skyrocket and because of increased use of costly drugs. It shows that research and development costs do not explain or justify high drug prices.

Why are drug prices so high? Drug patents are responsible in significant part for high drug prices, affording drug companies monopoly pricing power. Consolidation in the drug industry and lack of adequate competition in the generic drug market are also to blame.

The GAO analyzed pharmaceutical company revenue, profit margins, and merger and acquisition deals worldwide between 2006 and 2015. It found a 45 percent increase in drug and biotech sales revenue in that period, from $534 billion to $775 billion in 2015 dollars.

Two out of three drug companies also increased their annual average profit margins, with the largest 25 companies, seeing annual profits of between 15 and 20 percent. These margins are two to five times higher than the annual average profit margin of the largest 500 non-drug companies, which was between 4 and 9 percent.

There is concerning industry consolidation. Ten pharmaceutical companies generated 38 percent of sales. But, within certain therapeutic classes, fewer companies controlled even more of the market. And, market pressure is leading large drug companies to acquire smaller ones to drive greater profits. Lack of competition in the drug industry, particularly for generics, fueled higher drug prices. Based on the data, the GAO also found a link between industry mergers and lack of innovation.

While drug company profits have increased dramatically, research and development spending has not, rising just over eight percent to $89 billion from $82 billion between 2008 and 2014. The U.S. government spends about $28 billion a year on research. Tax benefits to drug companies for research and development of orphan drugs helped foster their investments.

The FDA approved between 179 and 263 drugs each year. Between 23 and 35 of these drugs were treatments for unmet medical needs or to “help advance patient care.” The GAO does not explain this term, which may mean simply new ways of dispensing old drugs and nothing innovative from a treatment perspective.

The GAO explains that insured consumers are often less price conscious with prescription drugs than they are with products for which they have to pay in full and that can promote price inflation and drive up spending. In addition, doctors may not be aware of low-cost alternatives they could prescribe or they simply may be inclined to prescribe the most expensive drug, which can further drive up spending. And, Medicare is often required to pay for even the expensive drugs that may offer no added value, which drives up spending further still.

The GAO does not discuss incentives of health insurers and pharmacy benefit managers to promote high-priced drugs over lower-cost alternatives. But, there’s every reason to believe that fees to PBMs to promote high-priced drugs on insurer formularies over lower-cost alternatives are also in some way responsible for driving up drug spending. Insurers are likely benefiting from this arrangement or they would be doing something to stop that practice.

Senator Sanders and Congressman Cummings sent a letter to President Trump alerting him to the GAO report and urging him to make good on his promise to the American people to address skyrocketing prescription drug costs.

If you want Congress to rein in drug prices, please sign this petition.

Here’s more from Just Care:
January 5, 2018