We have been sounding alarm bells for many years about Medicare Advantage (MA), the privately-run health plans for seniors that are growing in popularity as an alternative to traditional Medicare. This week, an eye-opening report by the Inspector General’s office at the Department of Health and Human Services (HHS) confirmed some key criticisms by the National Committee and other seniors’ advocates – namely, that MA plans are denying legitimate claims and refusing to authorize reasonable medical procedures.
“Tens of millions of denials are issued each year for both authorization and reimbursements, and audits of the private insurers show evidence of ‘widespread and persistent problems related to inappropriate denials of services and payment,’ the investigators found.” – New York Times, 4/28/22
The Inspector General’s office estimated that 13% of claims that Medicare Advantage insurers denied should have been covered. MA plans also improperly denied up to 85,000 prior authorizations. The New York Times reports, “In some cases, plans ignored prior authorizations or other documentation necessary to support the payment. The most frequent denials found by the investigators included those for imaging services like M.R.I.s and CT scans.”
“Advantage plans also denied requests to send patients recovering from a hospital stay to a skilled nursing center or rehabilitation center when the doctors determined that those places were more appropriate than sending a patient home.” – New York Times, 4/28/22
Medicare Advantage insurers are paid a fixed price per beneficiary by the federal government. The rationale is that private plans can theoretically provide more cost-effective, coordinated care to save the Medicare program money. The profits that MA plans have realized from this arrangement surely have rolled in, but the savings to Medicare haven’t materialized. As our president and CEO, Max Richtman, recently wrote in Common Dreams:
Between 2009 and 2021, the government paid Medicare Advantage plans $140 billion more than it would have if the same patients had stayed in traditional Medicare. In fact, the cost to taxpayers of switching seniors to MA plans ‘has exploded since 2018 and is likely to rise even higher.’” – NCPSSM President & CEO Max Richtman, Common Dreams, 3/25/22
Instead of being held accountable for overbilling the government and denying care to beneficiaries, MA plans have been rewarded with an 8.5% increase in rates for 2023 by the Centers for Medicare and Medicaid Services.
MA plans also continue to grow in popularity. More than 26 million seniors – or 42% of all Medicare beneficiaries – were enrolled in an MA plan last year. And the Congressional Budget Office (CBO) projects that more than half of all beneficiaries will be in MA plans by 2030. This isn’t because MA plans are patently superior for patients; it is because of the lure of putative cost-savings (in the form of lower premiums or free extras like gym memberships) and a torrent of television ads featuring famous pitchmen like Joe Namath and Jimmy Walker.
The Medicare Advantage tv ads do not mention any of the downsides of these plans – including restricted networks of providers, inaccurate network listings, and the wrongly denied claims and pre-authorizations that the Inspector General’s office has just flagged. In fact, the ads make it seem as if Medicare Advantage is the whole Medicare program, with many enrollees not even aware that publicly-run, traditional Medicare is another – and often better – option.
As our President and CEO argues in his Common Dreams column, there is a movement to privatize traditional Medicare that is gaining momentum, which NCPSSM considers harmful for older Americans. The shifting of market share to MA plans is part of it. But so are recent efforts to increase the role of private, for-profit companies in traditional Medicare.
The National Committee and other seniors’ advocates are particularly wary of a pilot program by CMS recently re-branded as ACO/REACH and previously known as Direct Contracting, which allows private entities more opportunities to manage traditional Medicare beneficiaries’ care. Meanwhile, progressive Democrats on Capitol Hill, most prominently Rep. Pramila Jayapal (D-WA), have taken a hard line against the new program:
“(There is) a clear-cut argument for why we must immediately end Medicare privatization programs like ACO Reach. There’s no excuse for allowing the same Medicare Advantage organizations to now administer ‘care’ for traditional Medicare beneficiaries.” – Rep. Pramila Jayapal tweet, 4/28/22
While CMS presses forward with the ACO/REACH program, Medicare officials say they are looking at the Inspector General’s report about Medicare Advantage practices. “Plans found to have repeated violations will be subject to increasing penalties,” reports the New York Times. “The agency ‘is committed to ensuring that people with Medicare Advantage have timely access to medically necessary care.’”
At the same time, some in Congress are attempting to rein-in MA plans and protect patients. A piece of bipartisan legislation called the Improving Seniors’ Timely Access to Care Act has been introduced in both the House and Senate. According to one of the House sponsors, Rep. Suzan DelBene (D-WA), the legislation “would improve care for seniors by streamlining and standardizing the way Medicare Advantage plans use prior authorization and increasing oversight and transparency.”
It is only appropriate that these private plans, which are consuming a growing chunk of Medicare market share every year, be subject to strict oversight and thorough scrutiny. As MA insurers rake in hefty profits, it is crucial that proper patient care isn’t sacrificed in the process.