JustCare

Tag: MedPAC

  • MedPAC: Traditional Medicare consistently costs less than Medicare Advantage

    MedPAC: Traditional Medicare consistently costs less than Medicare Advantage

    In a concise online memo, the Medicare Payment Advisory Committee, MedPAC, responded to health insurance industry misinformation about Medicare Advantage–the private insurance program offering Medicare benefits. MedPAC makes clear that Medicare Advantage has always cost taxpayers more per person than traditional Medicare. The memo should be a wake-up call to Congress and the administration that it is time to do away with Medicare Advantage plans or, at the very least, revise the way they are paid.

    According to MedPAC, when compared properly, “Medicare spends more overall for enrollees in Medicare Advantage than the program would have spent for similar beneficiaries enrolled in traditional FFS Medicare.” MedPAC’s memo says explicitly that AHIP, the trade association representing the insurers offering Medicare Advantage plans, incorrectly represented Medicare Advantage plan costs in a recent blog post. And, AHIP inaccurately described how MedPAC calculates those costs.

    Since 2004, MedPAC has been comparing spending levels in Medicare Advantage and traditional Medicare. In so doing, it first ensures it is making an apples-to-apples comparison. It adjusts its calculations based on differences in people’s health status, physical location, and diagnoses, as well as services covered. And, every year, MedPAC finds that Medicare Advantage spending has been higher than traditional Medicare spending.

    In some years, Medicare Advantage spending has been significantly higher than traditional Medicare spending. MedPAC goes out of its way to say that its conclusion should not suggest that Medicare Advantage plans are inefficient. (Based on other MedPAC materials, Medicare Advantage plans spend 87 percent of what traditional Medicare spends on Part A and B services, which could argue for its efficiency but also could suggest that it is inappropriately denying care.)

    MedPAC believes that payments to Medicare Advantage plans should come down and is likely to recommend a  Medicare Advantage spending cut, according to Michael Brady of Modern Healthcare. MedPAC commissioners believe plan rates are too high. In response to any spending cuts, Medicare Advantage plans would likely end or reduce the additional benefits they currently offer. Right now, Medicare Advantage plans allegedly put about 14 percent of their payments towards additional benefits, which all taxpayers pay for. And, that’s a problem.

    Here’s more from Just Care:

  • What if the government paid Medicare Advantage plans differently?

    What if the government paid Medicare Advantage plans differently?

    Today, the government pays Medicare Advantage plans–private health plans that contract with the federal government to offer Medicare benefits–a flat fee per member, creating a huge incentive for them to delay and deny health care services. The less money they spend, the more they profit. Healthcare Dive reports that the Medicare Payment Advisory Commission (“MedPAC”), an independent legislative agency providing Medicare policy guidance, is considering a new way to pay Medicare Advantage plans for the services they deliver to their members.

    MedPAC might recommend changing the  payment system to Medicare Advantage plans. But, curiously, it is not proposing to move away from an incentive system that keeps Medicare Advantage plans from designing coverage to meet the needs of people with costly conditions and encourages them to deny their members costly care. MedPac is simply proposing to pay these plans a blended rate, rather than a rate based on community health care costs.

    MedPAC has not yet come up with a proposal. Its members can’t agree on how to come up with the new rate. It’s troubling that its members are not focused on a new payment model that deters these health plans from avoiding people with costly conditions and delivering high-value care to their members.

    Other countries that rely on private insurers pay them a small fee to process claims. The insurers are told what to pay for and under what circumstances; prices are established by the government. So, private insurers in France and Germany have no financial incentive to delay and deny care to people with serious health care needs.

    In the US, Kaiser Family Foundation reports that Medicare Advantage plans were pocketing an average of $1,608 for each member they enrolled between 2016 and 2018, of the $11,545 or so they received per member. That’s about twice as much as they profit in the individual ($779) and group markets ($855).

    Many people with Medicare enroll in Medicare Advantage to save money, particularly if they are relatively healthy. But, as of 2021, if they get sick, their out-of-pocket costs could be as high as $15,100 over two months between December and January. And, they are restricted to seeing a narrow group of doctors if they want their care covered. That’s why a high proportion of them try to switch to traditional Medicare–the public Medicare health plan–when they need a lot of care; but, that can be difficult.

    In contrast, the federal government has not saved money on Medicare Advantage. Over the last 16 years, Medicare Advantage has cost the government between 1.5 percent and 14 percent more than fee for service Medicare. Moreover, some Medicare Advantage plans are fraudulently overbilling the federal government billions of dollars a year. And, others are engaged in widespread and inappropriate delays and denials of care to their members.

    If you want your care covered from the doctors and hospitals you know and trust, you should enroll in traditional Medicare. You will need supplemental coverage to protect yourself from high out of pocket costs. Tell your members of Congress that they should put an out-of-pocket cap in traditional Medicare.

    Here’s more from Just Care:

  • Senators ask Medicare agency why it is not holding Medicare Advantage plans accountable for violating their contractual obligations

    Senators ask Medicare agency why it is not holding Medicare Advantage plans accountable for violating their contractual obligations

    On September 13, 2019, six Democratic Senators sent a letter to Center for Medicare and Medicaid Services (CMS) Administrator, Seema Verma, detailing their concerns about the well-being of people enrolled in Medicare Advantage plans and the integrity of the Medicare Advantage program. The Senators ask CMS why it is not holding Medicare Advantage plans accountable for violating their contractual obligations; rather, Medicare Advantage plans are jeopardizing the health and safety of their members and overbilling taxpayers to the tune of around $10 billion a year.

    The letter, signed by Senators Sherrod Brown, Debbie Stabenow, Chris Murphy, David Blumenthal, Amy Klobuchar and Bernie Sanders, urges prompt action of Administrator Verma to ensure that Medicare Advantage plans are held accountable for meeting their contractual obligations and managing the health care needs of their members. The Senators want to ensure that deficiencies in oversight of Medicare Advantage plans are addressed. The Senators pose 19 questions to Verma on six areas of concern.

    Recouping and preventing Medicare Advantage plan overpayments: Government audits show tens of billions of dollars in overpayments to MA plans and an inability of CMS to recoup this money. Four questions focus on the need for Congress to ensure the financial integrity of the Medicare Advantage program and protect the US Treasury. CMS needs to explain whether and how it plans to recoup overpayments from MA plans. If it can’t recoup this money, CMS needs to explain its plans to ensure it does not continue to overpay them. The Senators ask whether CMS has the tools to hold the Medicare Advantage plans accountable.

    Ensuring network adequacy and accurate provider directories: Government audits reveal that provider directories are often inaccurate, and it is not evident that CMS is ensuring network adequacy. Three questions go to why Medicare Advantage plans are not publishing accurate provider directories as required by law and what’s keeping CMS from ensuring there are enough health care providers in the plan’s network.

    Securing encounter data, which show the health care services MA plan members receive: Government audits reveal that Medicare Advantage plans are not providing CMS with complete and accurate encounter data as required by law. Two questions ask how CMS is going to secure, report and ensure the accuracy of Medicare Advantage plan encounter data. The Senators support MedPAC’s recommendation that CMS reduce payments to Medicare Advantage plans that do not provide complete and accurate data.

    Holding Medicare Advantage plans accountable for persistent performance problems: Government audits show that Medicare Advantage plans may be inappropriately delaying and denying care and coverage to their members. Five questions concern how CMS enforces MA plan standards and protects enrollees, particularly when their health and safety are at risk, as well as whether CMS needs additional resources. The Senators ask CMS to report those Medicare Advantage plans with performance problems and the nature of those problems on the Medicare Plan Finder.

    Ensuring star-ratings are not misleading: Medicare Advantage plans found to threaten members’ health and safety can receive four and five-star ratings. The Senators ask what CMS is doing to address these misleading star-ratings.

    Ensuring informed health plan choices: CMS has not provided people with Medicare information on plans with high denial rates and plans that have been found to threaten people’s health and safety. It does not disclose that people who forego traditional Medicare when they first enroll may not be able to switch later, since plans that fill gaps in coverage may not be available to them. It does not mention that people enrolled in Medicare Advantage plans could be liable for as much as $6,700 out of pocket for in-network care alone. And, CMS has steered people into Medicare Advantage plans with misleading information.

    Here’s more from Just Care:

  • Most people choose traditional Medicare over Medicare Advantage

    Most people choose traditional Medicare over Medicare Advantage

    More than twice as many people enrolling in Medicare choose traditional Medicare over a Medicare Advantage plan. A new report from the Kaiser Family Foundation suggests that most older adults and people with disabilities want open access to doctors and hospitals and fewer administrative hassles. Only traditional Medicare offers these benefits.

    Kaiser found that 71 percent of people enrolling in Medicare for the first time chose traditional Medicare, as compared with 29 percent who chose Medicare Advantage. People choosing traditional Medicare appear willing to spend more on their coverage upfront and want to avoid getting a referral or a prior authorization before receiving specialty care.

    Given how little we know about different Medicare Advantage plans, it’s not surprising that most people are choosing traditional Medicare over Medicare Advantage. Traditional Medicare puts them and their doctors in charge of their health care. Here are four things to think about when make a choice between traditional Medicare and Medicare Advantage.

    With Medicare Advantage plans, there’s compelling evidence that for-profit insurers wrongly delay and deny care a significant amount of the time. And, we have reason to believe they limit care, covering fewer physical therapy and home care visits. They have unpredictable out-of-pocket costs that can be as high as $6,700 a year for in-network care alone.

    Moreover, we have virtually no good information identifying the Medicare Advantage plans that deliver good coverage. Medicare’s five-star ratings system does not provide good information, according to MedPAC, an independent federal body advising Congress on health care financing and delivery. Since Medicare Advantage plans restrict your access to health care providers, may override your treating physician’s opinion about the care you need and do not disclose typical out-of-pocket costs for people with complex conditions, enrollment is a gamble.

    The rate of initial enrollment in Medicare Advantage plans has increased by about 1 percentage point a year for the last several years, from 23 percent in 2011 to 29 percent in 2016. It appears that most older adults and people with disabilities are willing and able to spend more upfront for better coverage.

    That said, Medicare enrollment choices differ dramatically in different parts of the country. People with Medicare in Oregon and Minnesota were more likely to enroll in Medicare Advantage when they first signed up for Medicare than people in other parts of the country. Four in ten of them chose Medicare Advantage over traditional Medicare.

    People in Delaware, Maryland, Nebraska, New Hampshire, and Vermont, as well as Washington DC, tend to prefer traditional Medicare. Fewer than 11 percent of them enrolled in Medicare Advantage plans when they first enrolled in Medicare.

    People with disabilities were far more likely to enroll in traditional Medicare than people who enrolled in Medicare at 65 or older. In 2016, just 22 percent of people with disabilities enrolled in a Medicare Advantage plan as compared with 31 percent of people 65 or older.

    People with Medicaid and Medicare, dual-eligibles, also were far less likely to enroll in Medicare Advantage than people not eligible for Medicaid. In 2016, 18 percent of dual-eligibles signed up for Medicare Advantage as compared to 31 percent of people solely eligible for Medicare.

    Here’s more from Just Care:

  • UnitedHealth charged with enrollment fraud

    UnitedHealth charged with enrollment fraud

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

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

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

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

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

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

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

    Here’s more from Just Care:

  • Justice Department sues UnitedHealth Medicare Advantage for fraud

    Justice Department sues UnitedHealth Medicare Advantage for fraud

    At the end of March, the U.S. Justice Department joined a lawsuit brought by a whistleblower alleging that UnitedHealth Group committed fraud in its Medicare Advantage (commercial insurance that covers Medicare benefits) business. The charge is that UnitedHealth misrepresented the health status of its subscribers to Medicare in order to increase its Medicare payments.

    Kaiser Health News reports that the breadth of UnitedHealth Group’s alleged fraud is significant. Damages could be more than $1 billion. That said, an investigation by the Center on Public Integrity suggests that fraud and overbilling by Medicare Advantage plans may be costing taxpayers tens of billions of dollars. The Government Accountability Office (GAO) has also reported on significant billing concerns with Medicare Advantage plans.

    When Congress expanded Medicare to include commercial health plan options, the claim was that these plans could bring down Medicare costs significantly. In fact, these plans have restricted people’s choice of doctors and hospitals and driven up out-of-pocket costs significantly for people with complex conditions. In addition, the Medicare Payment Advisory Commission (MedPAC) has found that taxpayers continue to spend more per person in Medicare Advantage plans than in traditional Medicare.

    Less than a third of people with Medicare are enrolled in Medicare Advantage plans, in part because they restrict people’s access to care and can leave members with costly care needs paying well over $6,000 a year for in-network care plus thousands more if they use out-of-network doctors, which they too often have no choice but to do. But, traditional Medicare requires people have supplemental coverage in order to fill gaps and budget for their care. So, people who believe that they will not need care in the foreseeable future may choose a Medicare Advantage plan to save on the cost of supplemental coverage.

    Here’s more from Just Care:

  • Government still overpays commercial Medicare plans

    Government still overpays commercial Medicare plans

    At a recent meeting of the Medicare Payment Advisory Committee (MedPAC), commissioners learned that, all things being equal, Medicare Advantage plans–commercial health plans offering Medicare benefits–cost the federal government five percent more than traditional Medicare in 2016. But, according to Kip Sullivan at the Health Care Blog, no one could explain why these commercial Medicare plans offer such poor value. And, no commissioner asked why government still overpays these commercial Medicare plans.

    It’s worth noting that Congress passed legislation in 2003 supporting the choice of commercial Medicare Advantage plans through Medicare on the theory that these commercial health plans would be more cost effective than traditional Medicare. More than a dozen years later, traditional Medicare remains more cost-effective. Yet, Congress is neither suggesting that the government ratchet back payments to these plans, nor that they be terminated.

    As startling, the MedPAC commissioners charged with overseeing Medicare payments cannot get an explanation as to why Medicare Advantage plans are not reducing Medicare spending. The MedPAC staff believes that it is not possible to get the answer to this question. But, no one in Congress or on the MedPAC committee is even suggesting that Medicare Advantage plans be transparent and provide data explaining why they cost more than traditional Medicare.

    Taxpayers pay for Medicare Advantage plans, which are administered through commercial insurance companies such as UnitedHealthcare, Aetna and Humana, Yet, for some inexplicable reason, these insurers are permitted to claim that most of  their data is proprietary and are not held accountable for their higher costs.

    Now, Speaker Ryan and his Republican allies in Congress are on a path to privatize all of Medicare, which will not only significantly drive up out-of-pocket costs for people with Medicare but will leave us even more in the dark about what’s working and not working in our health care system. Talk about giving away the store at the expense of people with Medicare and U.S. taxpayers.

    If you oppose Ryan’s plan to privatize Medicare, please sign this petition and visit your Senators to make your views known.

    Here’s more from Just Care: