JustCare

Tag: Humana

  • OIG finds that Humana Medicare Advantage overbilled government big time

    OIG finds that Humana Medicare Advantage overbilled government big time

    If we’ve learned anything from the federal government’s 18-year experiment with Medicare Advantage plans–private insurance plans offering Medicare benefits–it’s that there is every reason for the government not to pay them upfront for their services. Upfront payments simply give the for-profit insurers an incentive to hold on to as much of the money they receive as possible. A new audit report by the Office of the Inspector General (OIG) suggests that the government’s willingness to pay Medicare Advantage plans more for patients with multiple diagnoses gives them an incentive to report to the government that their members have multiple diagnoses. The OIG finds that Florida Humana Medicare Advantage has done just that, overcharging the government by nearly $200 million in one year alone.

    There is little question that the federal government is spending more on people in Medicare Advantage plans than it does in traditional Medicare. A recent MedPAC post reported that Medicare Advantage has cost the Treasury more than traditional Medicare every year since its inception. To be sure, Medicare Advantage plans are all different and some could be serving their members and the American public well. But, there is substantial evidence that many are not. An OIG 2020 report found that in 2019 alone, the federal government made $16 billion in improper payments to Medicare Advantage plans, more than 6 percent of total payments of about $244 billion.

    The OIG found that in a sample of just 200 Humana Medicare Advantage members in Florida, the government could not validate more than 10 percent of the diagnosis codes that Humana submitted. The OIG’s audit did not include other Medicare Advantage plans. It’s probably fair to assume that when other Medicare Advantage plans are audited–as the OIG plans on doing–that it’s not unlikely that the OIG will have similar findings.

    In addition to a refund of the $197.7 million in net overbilling, the OIG wants Humana to improve its policies so that they are in compliance with federal requirements for diagnosis codes. However, if the punishment is simply for Humana to reimburse the government for the faulty coding, what is the incentive for Humana, or any other Medicare Advantage plan for that matter, to improve its compliance?

    Unsurprisingly, Humana disagreed with the OIG’s findings and was able to get the OIG to reduce the overcharge amount down from $261 million to $197. Still, it contests the OIG’s findings and appears to be considering an appeal. All in, across the US, Humana has 4 million Medicare Advantage members.

    Here’s more from Just Care:

  • Coronavirus: Second-quarter profits double for big health insurers

    Coronavirus: Second-quarter profits double for big health insurers

    Reed Abelson reports for The New York Times that second-quarter profits doubled for big health insurers from the same period in 2019. The Affordable Care Act imposes a limit on the profit that health insurers can keep.  But, people with health insurance are not likely to see money back any time soon.

    Because few people sought medical care for anything other than COVID-19 between April and June, insurers paid few claims. But, they collected the same premiums they always collect. So, the pandemic has served them very well so far.

    The Trump administration has suggested that the health insurers with outsize profits, such as UnitedHealth Group, Anthem and Humana, speed up rebates. But, it has no authority to require them to do so. It also suggested that they lower premiums. Again, it has no authority to require them to lower premiums.

    Because insurers are not legally allowed to change their premiums during the year, the Centers for Medicare and Medicaid Services is giving them the right to do so. Big whoopee. Insurers are not going to lower premiums, even if they can, since that would work against the interest of their shareholders.

    The Affordable Care Act (ACA) allows health insurers to keep 15-20 cents on the premium dollar, depending upon the type of insurance they are selling, individual, small group or large group. They must pay out the other 80-85 cents for medical care. Still, holding on to extra premium money for as long as possible benefits them financially. And, the ACA gives them three years to hold on to the money.

    The ACA effectively protects insurers that charge excessive premiums from having to return the excess money quickly on the theory that health care costs fluctuate and premiums might be inadequate to meet insurer expenses later on. For example, if people start going to the hospital and doctor at twice the rate they have been, insurers would have a cushion to pay those claims. Of course, the laws on premium-setting also protect insurers. They can relatively easily raise their rates next year.

    CVS Health, which owns Aetna, saw its net income increase in the second quarter by $1 billion. Last year, its second quarter net income was $2 billion. Anthem saw its net income increase $1.2 billion in the second quarter. UnitedHealth, the largest health insurer in the US, saw its net income rise by $3.3 billion.

    Taxpayer money for Medicare and Medicaid private health plans–Medicare Advantage and Medicaid managed care–has likely been paid to private health insurers in exchange for providing far less care than projected. If Medicare Advantage plans are able to keep the payments that they received for the first half of the year, they would be making out like bandits. The same is true for Medicaid managed care plans.

    The pandemic is hurting most hospitals and doctors. Many hospitals and doctors are struggling to generate the revenue to stay in business. And, private health insurers owe them nothing. Proponents of a single government health insurance system–one without private health insurers designing insurance policies–explain that in such a system hospitals and doctors would be on a global budget with guaranteed revenue in good times and bad.

    One as of yet unanswered question is whether employees at companies that are self-insured are seeing reductions in their insurance premiums. And, if not, why not? Their employers should be paying out less in claims.

    The marketplace is clearly not able to ensure that Americans are getting the health care they need at a fair price. “We’re looking at the fact that health care can’t be regulated by the marketplace,” said Representative Pramila Jayapal. It’s time for Medicare for all.

    As of now, Vice-President Biden is opposed to Medicare for all. It would be great if these enormous insurer profits led him to rethink his position.

    Here’s more from Just Care:

  • Coronavirus: Medicare Advantage plans doing little to ensure their members get needed care

    Coronavirus: Medicare Advantage plans doing little to ensure their members get needed care

    In the face of the novel coronavirus pandemic, the Centers for Medicare and Medicaid Services (CMS) has mandated that Medicare Advantage plans–corporate health plans that offer Medicare benefits–remove certain restrictions on covered care. Unfortunately, it does not appear that these private plans are letting their members know. Based on the information available on their web sites, they are doing precious little to ensure their members get needed care, endangering the lives of hundreds of thousands of older adults and people with disabilities.

    CMS is requiring Medicare Advantage plans to cover coronavirus-related treatment from out-of-network providers in Medicare-participating facilities at the same cost as at in-network facilities. And, people do not need a referral to be covered. Virtually all hospitals in the US are Medicare-participating facilities.

    Shockingly, UnitedHealthcare, Humana and Aetna  coronavirus web pages do not mention these expanded protections for people in Medicare Advantage plans needing coronavirus treatment. In fact, they are largely silent on coverage for treatment. UnitedHealthcare, Humana and Aetna combined cover half of all Medicare Advantage enrollees.

    It appears that Medicare Advantage plans are also keeping all cost-sharing and prior authorization requirements in place for people needing coronavirus treatment. CMS issued guidance allowing them to waive these requirements, but not mandating that they do so.

    Because out-of-pocket costs can be very high for people needing hospital care, one in four people with corporate health insurance skip treatment. Of course, deductibles, coinsurance and other barriers to care in Medicare Advantage plans will keep thousands, if not tens of thousands, of older adults and people with disabilities from getting needed treatment. But, they presumably will help Medicare Advantage plans’ bottom lines.

    A new Kaiser Family Foundation paper shows that people in Medicare Advantage plans who are hospitalized for seven or more days will spend more out of pocket for their care than they would had they been in traditional Medicare. Nine in ten people in traditional Medicare will spend nothing or close to nothing because they have supplemental coverage through Medigap, Medicaid or a former employer, which pays for all or virtually all out-of-pocket costs.

    The six million people in traditional Medicare who do not have supplemental coverage that picks up the cost of the Part A deductible must pay $1,408 out of pocket if they are hospitalized. After that, they pay nothing for the next 60 days of hospitalization. For most people in Medicare Advantage plans, the average out-of-pocket cost is $1,762 for a seven-day hospital stay and $2,039 for a ten-day stay. Hospitalizations related to treatment for Covid-19, the disease caused by the coronavirus, can be far longer than ten days.

    Here’s more from Just Care:
  • Part D insurers bilk Medicare and taxpayers

    Part D insurers bilk Medicare and taxpayers

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

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

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

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

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

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

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

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

    Here’s more from Just Care:

  • Insurers donate to Democrats in attempt to undermine support for Medicare for all

    Insurers donate to Democrats in attempt to undermine support for Medicare for all

    Tarbell reports that commercial health insurers are supporting Democrats with larger campaign contributions as a way to undermine their support for a government-administered Medicare for all health care system that does away with commercial insurance.

    An increasing number of people are supporting Medicare for all, which would do away with for-profit insurance in the US. The latest Kaiser/Washington Post poll shows that a little more than fifty percent of Americans (51 percent) support government-administered Medicare for all. Only 43 percent of Americans are against it. And, many members of Congress are following the public’s lead.

    To cover their bases and protect their industry, the five largest for-profit health insurers—Aetna, Anthem, Humana, Cigna and UnitedHealth—are using their political action committees to support members of Congress on both sides of the political aisle. They have given more than $1.6 million to House campaigns alone. One member of Congress, Joseph Crowley, whom the insurers believed would be their ally, lost his primary race to Alexandria Ocasio-Cortez, who supports Medicare for all.

    Other House Democrats who are recipients of the health insurers’ financial support are Cheri Bustos of Illinois, Jim Hines of Connecticut, Ron Kind of Wisconsin, Ann McLane Kuster of New Hampshire, John Larson of Connecticut and Richard Neal of Massachusetts.

    The health insurers would likely be very happy with Medicare Advantage for all, doing away with government-administered traditional Medicare. Of course, what they and their allies do not explain and what the public needs to understand is that Medicare Advantage would look very different if it were not competing with traditional Medicare. Costs would skyrocket; today, traditional Medicare holds doctor and hospital costs down for the Medicare Advantage plans. And, Medicare Advantage networks would shrink; today, Medicare Advantage plans need rich networks in order to compete with traditional Medicare. Moreover, Congress would have the ability to cut payments to Medicare Advantage plans and shift more costs to older Americans and people with disabilities with Medicare.

    The health insurers are giving considerable support to the New Democrat Coalition, a pro-business, more centrist body of 68 House members than the Congressional Progressive Caucus, with 76 members.

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

    Here’s more from Just Care:

  • Why won’t insurers cover some generic drugs?

    Why won’t insurers cover some generic drugs?

    Some people are finding that they cannot fill their prescriptions for generic drugs at the pharmacy; their insurers will only cover the brand-name versions. Why won’t health insurance companies cover some generic drugs? It appears that insurers and the pharmacy benefit managers (PBMs), who set up their list of approved drugs, can benefit financially when they require their members to take brand-name drugs rather than generics.

    We all know that in almost every case, generics are the equivalent of the brand-name drugs. They must have the same active ingredients and must be the “bioequivalent” of the brand name drug, delivering the same strength ingredients at the same time. They must have the same purity and stability and come in the same form—e.g., tablet, liquid—as brand name drugs. And, they must have the same therapeutic effect as brand name drugs with the same risks and benefits.

    But, the New York Times and Pro Publica report that the insurer practice of requiring people in some cases to use brand-name drugs has been around for some time and is becoming increasingly common. Since forcing people to take the brand-name drug does not lower costs for consumers and can increase their out-of-pocket costs, it stands to reason that PBMs and their insurer clients make more money by requiring people to use brand-name drugs. PBMs are responsible for designing the list of approved drugs or “formulary” for insurers.

    Humana is one of the insurers that, in some cases, only covers brand-name drugs when a generic is also available.

    To be clear, pharmaceutical companies are also responsible for this bizarre state of affairs. They are handing over a lot of money to the PBMs and the health insurers to keep their brand-name drugs on their formularies and to steer their members to their higher-cost drugs.

    Of course, everyone ends up spending more as a result–taxpayers in the form of higher Medicare expenditures, consumers in the form of higher insurance premiums overall, and patients who need these drugs, when they are forced to pay out of pocket for them to meet their deductibles.

    If you find yourself being required to buy a brand-name drug instead of the generic, at a greater out-of-pocket cost, appeal to your health plan and report it to your local legislators. There is no justification for this practice, only greed.

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

    Here’s more from Just Care:

  • Warning: Your drug copay may be higher than the drug’s cash price

    Warning: Your drug copay may be higher than the drug’s cash price

    It’s bad enough that lack of competition empowers drug companies to set prices sky high for so many important drugs. And, not surprisingly, one in four people in the U.S. say that they struggle to pay for the drugs they need. It turns out that, if you have drug coverage, your drug copay may be higher than the drug’s cash price, and your pharmacist won’t tell you.

    Bloomberg news reports that pharmacy benefit managers PBMs, which contract with pharmacies to pay for drugs on behalf of your health plan, force pharmacists to charge you the insurer’s copay, even when the pharmacy sells the drug for less.  These PBMs or at least Optum Rx and Catamaran, owned by UnitedHealth Group and Humana’s subsidiary PBM, forbid pharmacists from telling you that you’ll save money if you don’t use your insurance to get the drug.

    How does the deal between the PBM and the pharmacy work exactly? The pharmacy turns over the difference between the copay and the actual cost to the PBM. And, according to KARE11, the PBM shares in the profits with the health plan.

    For example, KARE11 found at pharmacy:

    • Doxycycline copay: $46.14 v. cash price $26.95.
    • Venlafaxine copay: $67.13 v. cash price: $24.99

    The extent to which the health plan benefits from these PBM “clawback” contracts is not clear.  But, we’re talking real money. Because of these deals between PBMs and pharmacists, consumers are handing over hundreds of millions of dollars to the PBMs. Not surprisingly, there are more than a dozen lawsuits against insurers contracting with PBMs that are leading people to pay more for their drugs than they should.

    If you are struggling to pay for your drugs, you might consider buying your drugs online or abroad, as millions of Americans are now doing.

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

    Here’s more from Just Care:

  • Commercial health insurance unreliable, costly

    Commercial health insurance unreliable, costly

    With President Trump and the GOP working to end health care coverage available under the Affordable Care Act, the state health care marketplaces have been in turmoil. Given the uncertainty about the ACA’s future, insurers are pulling out of many counties or raising their cost-sharing requirements significantly. And, we are seeing, yet again, that commercial health insurance is unreliable and costly. This market instability coupled with high costs make a compelling case for improved Medicare for all, a reliable and cost-effective federal public health insurance option.

    The New York Times reports that 35,000 Americans in 45 counties may have no health insurance options in their state health care marketplaces in 2018.  Another three million people in 1,388 counties are likely to have the choice of one high-priced plan with restricted or no access to the doctors and hospitals they know and trust. People in rural areas are most affected. If everyone had the option of traditional Medicare, they would be guaranteed easy access to a wide range of doctors and hospitals anywhere in the country and be virtually assured continuity of care.

    In February, Humana announced that it would no longer be offering insurance in the health care marketplaces. And, Anthem just announced that it plans to stop offering coverage in Ohio and, as of yet, has made no commitment to offer marketplace coverage in any county in the U.S. And, the situation could get far worse. The Seattle Times just reported that the 300,000 people buying coverage in the Washington State health care marketplace could see a 22 percent increase in premiums in 2018.

    To guarantee people affordable reliable coverage, the California legislature is well on its way to passing legislation that would effectively do away with commercial insurance and give everyone in the state improved Medicare for all. If we consider health care as a right, we should not be relying on commercial insurers to deliver coverage. They are less cost-effective than Medicare and unpredictable.

    Here’s more from Just Care: