JustCare

Tag: OIG

  • What happens when a Medicare Advantage plan endangers people’s health?

    What happens when a Medicare Advantage plan endangers people’s health?

    Medicare Advantage plans delay and deny care inappropriately, putting their members’ health at risk. Enrollees with serious medical conditions can find themselves unable to get critical care. As a general rule, the government does nothing to stop the wrongful delays and denials of care or to protect people in Medicare Advantage plans that are failing to cover their enrollees’ medically necessary care. Before signing up for a Medicare Advantage plan or deciding to remain in one, consider the consequences if you take a big fall or are diagnosed with a serious health condition.

    Twice now, the HHS Office of the Inspector General has found widespread and persistent delays and denials of care and coverage in Medicare Advantage plans. But, the government never names names. Similarly, the American Hospital Association has reported that some Medicare Advantage patients are not able to get essential hospital care. “Inappropriate denials for prior authorization and coverage of medically necessary services are a pervasive problem among certain plans in the MA program. This results in delays in care, wasteful and potentially dangerous utilization of fail-first requirements for imaging and therapies, and other direct patient harms.”

    The Centers for Medicare and Medicaid Services (CMS), the government agency that oversees Medicare, tells people that MA plans “must” cover the same services as Traditional Medicare, but there’s a profound difference between theory and practice. Despite reports of bad acts by insurers offering MA, CMS does not have the resources to monitor the Medicare Advantage plans adequately. Even when the OIG identifies bad actors, CMS appears to lack the political will to name the bad actors, let alone punish the bad actors appropriately.

    Moreover, some MA plans are failing to pay hospitals and other providers adequately, denying 18 percent of their claims inappropriately, according to the OIG. People enrolled in these Medicare Advantage plans are at risk of losing access to their local hospitals, which cannot afford continuing contracts with Medicare Advantage plans that don’t pay their bills.

    On rare occasions, CMS will temporarily freeze enrollment in some Medicare Advantage plans as a penalty for their bad acts. But, when it does, CMS does not alert members to the inappropriate denials. Moreover, it has no way to prevent these Medicare Advantage plans from continuing to delay and deny care inappropriately.

    Worse still, even when cautioned about bad actor Medicare Advantage plans—for example, by a local hospital—enrollees have little recourse. They generally cannot enroll in Traditional Medicare because, as a rule, they have no ability to buy supplemental coverage to fill coverage gaps. When they can get supplemental coverage, they often can’t afford it.

    Here’s what must happen to protect people with Medicare enrolled in, or thinking of enrolling in, a Medicare Advantage plan:

    1. The government, insurance sales agents, and all Medicare Advantage marketing materials must warn people with Medicare that they may be enrolling in a Medicare Advantage plan with high rates of coverage denials and high delay rates, jeopardizing their access to care. They must disclose denial rates and delay rates for each Medicare Advantage plan.
    2. The government, insurance sales agents, and all Medicare Advantage marketing materials must warn people with Medicare that they may be enrolling in a Medicare Advantage plan with high rates of payment denials, jeopardizing their access to care. It must disclose payment denial rates for each Medicare Advantage plan.
    3. The government, insurance sales agents, and all Medicare Advantage marketing materials should make clear that the government has no way to ensure that people enrolling in a Medicare Advantage plan will get the same benefits they get in Traditional Medicare and remove any language or suggestion to the contrary. The issue is not whether Medicare Advantage plans “must” cover the same benefits as Traditional Medicare, but whether they are doing so.
    4. The government must conduct annual audits of all Medicare Advantage plans and publicly identify all of them that have coverage and care denial rates of 10 percent or higher.
    5. The government must publish on its web site and send notices to people enrolled in any Medicare Advantage plan that has a 10 percent or greater denial rate.
    6. The government must give people a meaningful option to enroll in Traditional Medicare, with a limit on financial liability no higher than the lowest limit available in a Medicare Advantage plan; the cap should cost the government $10 less per person than the government spends on enrollees in Medicare Advantage. Right now, CMS must provide a Traditional Medicare option through its Innovation Center that caps out-of-pocket costs in Traditional Medicare no higher than the lowest level set by a Medicare Advantage plan.
    7. The government must establish a set of automatic escalating penalties to impose on Medicare Advantage plans that violate their contractual obligations, either through a ten percent denial rate or higher.
    8. To ensure the financial stability of hospitals, CMS should pay hospitals for MA enrollees directly whenever an MA plan has a payment denial rate above 10 percent and deduct hospital expenses from the MA plans’ capitated rate.

    In addition, the government should make clear in all its materials the annual maximum out-of-pocket costs in Medicare Advantage plans and advise people to check the maximum in any Medicare Advantage plan they are enrolling in. It should require Medicare Advantage plans to include this information prominently in all marketing materials. Sales agents should be required to disclose this information as well.

    As the American Hospital Association has said, “strong, decisive and immediate enforcement action is needed to protect sick and elderly patients, the providers who care for them and American taxpayers who pay MA plans more to administer Medicare benefits to MA enrollees than they do to the Traditional Medicare program . . . . In the recent contract year 2024 Medicare Advantage Rule, CMS noted that a number of the established regulations were already requirements under the health plan terms of participation in the MA program. Given MAOs historic lack of adherence to these rules, Congress should establish stronger programs to hold plans accountable for non-adherence. Additional requirements are insufficient without enforcement action and penalties to support compliance.”

    For too long, our federal government has allowed insurance corporations to mislead the public about Medicare Advantage, without revealing that all Medicare Advantage plans are different and that some are engaged in widespread and persistent delays and denials of care and coverage. Our federal government has failed to protect people from these bad actor insurers. These corporate insurers have endangered the lives of tens of thousands of people, to date. Their bad practices must end before the corporate insurers endanger the health and well-being of tens of thousands more older and disabled Americans.

    Here’s more from Just Care:

  • Office of Inspector General finds insurers inappropriately deny care to people with Medicaid

    Office of Inspector General finds insurers inappropriately deny care to people with Medicaid

    Healthcare Finance reports on new Office of Inspector General findings regarding high prior authorization denial rates in Medicaid managed care as well as a high likelihood that some people with Medicaid are not getting the care they need. The OIG urges the Centers for Medicare and Medicaid Services (CMS) to do more to ensure that the insurance companies offering managed care to people with Medicaid are honoring their obligations to cover needed care, rather than putting profits first by denying care inappropriately.

    The Office of the Inspector General is concerned that people with Medicaid are not getting needed care that corporate insurers should be covering. Moreover, there is little oversight of these corporate insurers. The Centers for Medicare and Medicaid Services and state insurance departments only conduct limited oversight of the insurance companies’ denials. And, people with Medicaid have restricted access to reviews of their denials. Even in Medicare Advantage, CMS oversight is extremely limited; CMS allows health insurers to deny care wrongly with near impunity.

    Medicaid insurance companies denied about 12 percent of prior authorization requests or about one in eight of them on average. But, ten percent of the managed care plans that the OIG reviewed denied one in four or more requests for prior authorization. People with Medicaid should know which plans have these high denial rates so they can avoid enrolling in them.

    The OIG fears that oversight bodies are not on top of many inappropriate denials of care. So, inappropriate denials continue because they are not addressed.

    In addition, the Medicaid appeals process in most states does not offer people the opportunity for an independent review of denials. So, the appeals process is not a check on most insurance companies offering Medicaid. People do have the right to fair hearings in their state, but the process can be challenging for people with Medicaid. Appealing to the Medicaid health plan directly is also not common.

    The OIG claims that the system is better for people in Medicare plans operated by insurance companies. That may be true, but the differences do not lead to particularly good outcomes for people with Medicare in these corporate managed care plans. The Centers for Medicare and Medicaid Services does little to hold Medicare Advantage plans accountable for their bad acts, even if these plans must report data on denials and appeals.

    If CMS reviews the appropriateness of Medicare Advantage prior authorization denials each year, it should report its findings. People should not be forced to choose a Medicare Advantage plan without knowing the risks that they will be denied care inappropriately if they enroll.

    Prior authorizations can be harmful to people’s health, often delaying critical care needlessly. More than nine in ten physicians report these delays. And one in three physicians say that prior authorization leads to serious harm to patients they care for. Nine percent of them say prior authorization leads to “permanent bodily damage, disability or death.”

    Here’s more from Just Care:

  • Medicare Advantage: Combating fraud is a challenge because there’s no data on denied claims

    Medicare Advantage: Combating fraud is a challenge because there’s no data on denied claims

    Medicare Advantage plans are required to submit complete and accurate data on the services their enrollees receive–patient “encounter data”–but, according to the Medicare Payment Advisory Commission, they have never done so. To the extent Medicare Advantage plans submit data, the Office of the Inspector General (OIG) reports that they fail to disclose when they deny payment for services their enrollees receive. Consequently, OIG can’t oversee them adequately and combat fraud.

    Th OIG finds that without the Medicare Advantage information concerning specifics about the services for which they are denying payment, the OIG cannot effectively understand, identify and address waste, fraud and abuse. As we know, in some significant fraction of instances, hospitals and other providers deliver services to MA enrollees for which the Medicare Advantage plans do not pay. When Medicare Advantage plans don’t pay for the services their enrollees receive, they threaten the viability of hospitals, particularly rural hospitals and hospitals serving low-income populations.

    The OIG said that detailed encounter data, showing which claims are denied, is critical to fighting fraud and abuse. It allows the OIG to identify billing patterns that are suspect. The Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, inexplicably does not require that information of the Medicare Advantage plans, even though CMS requires that information in traditional Medicare and for Medicaid health plans.

    CMS simply requires that Medicare Advantage plans submit “claim adjustment reason codes” when they do not pay the amount a provider bills. Adjustment codes do not reflect with certainty whether a claim was denied. For example, a code might indicate: “The procedure or service is inconsistent with the patient’s history.” In these cases, sometimes the Medicare Advantage plan reports it paid, even though it would seem it had not.

    Of note, in 2019 most MA encounter data contained at least 1 adjustment code, including 55 million that suggest the MA plan did not pay for the service.

    If OIG and others knew which Medicare Advantage claims were denied, they could check for fraud and understand the full scope of fraud in a Medicare Advantage plan. However, CMS’s group that focuses on Medicare Advantage payments sees requiring this data as a burden on the Medicare Advantage plans.

    The OIG explains why it does not see this requirement as a burden. First, the insurers offering Medicare Advantage plans enter information about denied claims for their Medicaid enrollees, so could easily do so for their Medicare enrollees. Second, it would make it easier for the Medicare Advantage plans to comply with OIG requests for information on denied claims. Third, if CMS moves to a system of using encounter data to determine Medicare Advantage costs and payments, as it has said it plans to do, CMS will need this information.

    The OIG’s final recommendation is that CMS require the Medicare Advantage plans to show on their encounter data whether they paid the claim or not. Curiously, CMS took no position, even though OIG says it  would enhance its ability to oversee Medicare Advantage and fight fraud.

    Here’s more from Just Care:

  • Hospitals overbill Medicare, driving up costs for everyone

    Hospitals overbill Medicare, driving up costs for everyone

    At the end of last year, the HHS Office of the Inspector General (OIG) released a report listing its top recommendations to the Centers for Medicare and Medicaid Services (CMS) that CMS has not implemented. Among those is a recommendation to address hospital overbilling, reports Amanda Norris for HealthLeaders. Hospital overbilling, both to Medicare and to commercial insurers, drives up costs for everyone.

    The OIG reports overpayments of $1 billion from hospitals charging inappropriately for a diagnosis of severe malnutrition in fiscal years 2016 and 2017. We don’t know all the other inappropriate diagnosis codes different hospitals are assigning to patients in their care that are driving up Medicare spending and costs to people with Medicare. What we do know is that inappropriate and excessive charges can mean higher coinsurance for patients and higher Medicare costs for taxpayers.

    The OIG has found that, overall, hospitals are claiming that their patients in their care are “at the highest severity level,” which increases their payments from CMS. The proportion of patients claimed to be “at the highest severity level” has gone up significantly over the last several years. How many of them are at the highest severity level, in fact, is unclear.

    OIG made a series of recommendations to address the issue of overpayments to hospitals resulting from inappropriate diagnoses, which CMS has yet to implement. Among those recommendations is that CMS review Medicare Severity Diagnosis Related Groups and other diagnoses that are easily upcoded as well as the hospitals that have disproportionate levels of these codes. CMS did not agree to undertake this effort.

    The OIG explains that these reviews are necessary to Medicare’s fiscal integrity. They are also necessary to control out-of-pocket costs for people with Medicare, including higher costs for Medicare supplemental coverage.

    Here’s more from Just Care:

  • Medicare Advantage: Beware of inappropriate nursing home stay denials

    Medicare Advantage: Beware of inappropriate nursing home stay denials

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

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

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

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

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

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

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

    Here’s more from Just Care:

  • Inspector General finds Medicare telehealth fraud

    Inspector General finds Medicare telehealth fraud

    The Centers for Medicare and Medicaid Services (CMS) began paying for a wide range of telehealth services at the start of the novel coronavirus pandemic in order to help ensure people with Medicare had access to the health care they needed. In year one of the pandemic, more than 28 million older adults and people with disabilities received telehealth services, 88 times the number of services than the prior year. The HHS Office of the Inspector General (OIG) has since discovered some serious telehealth fraud and, in a new report, recommends that CMS take several actions to protect people with Medicare and minimize fraud, waste and abuse.

    Between March 1, 2020 and February 28, 2021, 742,000 health care providers billed traditional Medicare or a Medicare Advantage plan for a telehealth service. Of those, the OIG found a tiny fraction, 1,714 providers whose billing practices pose “a high risk to Medicare.”  They received $127.7 million for their services to 500,000 people.

    Just to say it, the level of fraud detected pales in comparison to the fraud committed by Medicare Advantage plans.

    It’s not clear whether these telehealth care providers delivered necessary services or, for that matter, any services at all. More than four in ten of them are associated with telehealth companies. The OIG recommends much better and targeted CMS oversight of these services. And, CMS said it would follow up on the individual providers the OIG identified.

    But, CMS did not say it would look into telehealth companies, as the OIG recommended. It’s not clear why not. Right now, CMS data cannot identify these telehealth companies systematically.

    The OIG found that seven mental health providers who overbilled Medicare all worked for the same mental health and substance abuse chain in Florida. And, in more than half the cases where the OIG identified suspicious billing, more than one provider was engaged in suspicious billing.

    Here’s more from Just Care:

  • Ten ways to improve Medicare Advantage

    Ten ways to improve Medicare Advantage

    Dear Secretary Becerra and Administrator Brooks-LaSure:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    6. Ensure appropriate oversight of MA.

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

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

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

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

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

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

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

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

    8. Rethink Medicare Advantage networks. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Conclusion

    Medicare Advantage would be significantly improved by:

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

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

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

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

    Signed,

    Diane Archer, President, Just Care USA

    Alex Lawson, Executive Director, Social Security Works

    Wendell Potter, President, Center for Health and Democracy

  • 2022: Medicare Advantage facts and figures

    2022: Medicare Advantage facts and figures

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

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

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

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

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

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

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

    Here’s more from Just Care:

  • Government watchdog agencies tell Congress Medicare Advantage inappropriately restricts access to care and needs fixing

    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:

     

  • AHA underscores dangers of Medicare Advantage, need for greater accountability

    AHA underscores dangers of Medicare Advantage, need for greater accountability

    Recently, the HHS Office of the Inspector General (OIG) issued a report finding widespread, inappropriate delays and denials of care in Medicare Advantage. Picking up on those findings, the American Hospital Association (AHA) has now sent a letter to the Centers for Medicare and Medicaid Services (CMS) urging it to better oversee Medicare Advantage plans to prevent serious harm to patients and to hold Medicare Advantage plans accountable for their bad acts. Separately, the AHA called on the Justice Department to conduct additional False Claims Act investigations of Medicare Advantage plans for inappropriately denying people care and providers payment.

    The AHA highlights a range of concerns with Medicare Advantage. It calls for CMS collection and public reporting of data on delays and denials of care as well as grievances and appeals at the plan-level. This information is critical. People need to know whether their Medicare Advantage plan is putting enrollees’ health and well-being at risk.

    The AHA also recommends that CMS not pay Medicare Advantage plans in a way that incentivizes them to deny care. It stops short of saying that CMS should stop paying them a capitated fee that bears no relation to the cost of services they cover. But, that’s what needs to happen.

    Right now, Medicare Advantage plans can profit handsomely from denying care. Consequently, they have every reason to avoid including high quality specialists and specialty hospitals in their networks; and, they deter people with costly conditions from enrolling in their plans; they also discourage enrollees with costly conditions from remaining in their plans.

    The AHA does not suggest that CMS cancel its contracts with Medicare Advantage plans that are systematically violating their contractual obligations. That is the best way to protect people with Medicare. CMS should eliminate the bad Medicare Advantage actors so people cannot enroll in them.

    Still, the AHA explains that some Medicare Advantage plans are not complying with standard medical practice when they deny coverage for certain services. These plans are required to apply the same coverage criteria as traditional Medicare. But, they use more restrictive criteria that can endanger the lives of their enrollees. They deny coverage for care that traditional Medicare pays for.

    Moreover, the AHA highlights how the prior authorization protocols of some plans require much time and resources, driving up the cost of care. They create delays for patients in accessing needed care, often to the detriment of their health. These processes should be streamlined and uniform for all plans.

    In its pitch to the Justice Department, the AHA asked the Justice Department to create a task force for Medicare Advantage investigations. The government should impose civil and criminal penalties on Medicare Advantage plans that wrongly deny enrollees care and deny payment to providers for medically needed care. In their view, these penalties would prevent fraud.

    Here’s more from Just Care: