As the Center for Medicare Advocacy has outlined in recent CMA Alerts (including here, here and here), the Centers for Medicare & Medicaid Services (CMS) has recently taken long overdue steps to address Medicare Advantage (MA) overpayments and oversight, including restrictive prior authorization and marketing misconduct. As we await CMS’ final rules on prior authorization, including how far it is willing to go to rein in abusive industry practices, the need for such enhanced oversight is demonstrated by a recent STAT report on MA plans’ use of AI tools to inappropriately deny care. At the same time, as we await CMS’ final rule concerning MA payments for 2024, the insurance industry continues to mislead both the public and policymakers about what, in reality, are minor adjustments to the long-standing overpayments to MA plans.
STAT Highlights MA Plans’ Use of AI to Deny Care
In the Center’s experience, in recent years, MA plans have imposed ever greater barriers to care for their enrollees, in part due to the growing use of algorithmic or artificial intelligence- (AI) driven coverage determination software and tools in order to determine coverage for care in certain settings. The Center highlighted our observations in a “Special Report: The Role of AI-powered Decision-Making Technology in Medicare Coverage Determinations” (Jan. 19, 2022). In the Report we outlined how plans’ use of such AI tools leads to coverage decisions that are more restrictive than allowed under traditional Medicare rules.
We have also highlighted the experiences of some of our clients who have been subject to such tools, including, an 80-year old woman who had to file more than 10 appeals on UnitedHealthcare’s (through their contractor NaviHealth) repeated decisions to terminate her coverage of a skilled nursing facility (SNF) stay as she tried to regain mobility after a hip operation; see CMA Alert, “When Artificial Intelligence in Medicare Advantage Impedes Access to Care: A Case Study” (April 21, 2022).
STAT News recently issued a report analyzing these tools, titled “Denied by AI: How Medicare Advantage plans use algorithms to cut off care for seniors in need,” by Casey Ross and Bob Herman (March 13, 2023). The report explores how “artificial intelligence is now driving [health insurance company] denials to new heights in Medicare Advantage.” Through their investigation “based on a review of hundreds of pages of federal records, court filings, and confidential corporate documents, as well as interviews with physicians, insurance executives, policy experts, lawyers, patient advocates, and family members of Medicare Advantage beneficiaries”, Ross and Herman found that such tools “are becoming increasingly influential in decisions about patient care and coverage.” The report highlights the experiences of MA enrollees, and interviews providers and advocates (including the Center). The report summarizes the impact of such tools:
Behind the scenes, insurers are using unregulated predictive algorithms, under the guise of scientific rigor, to pinpoint the precise moment when they can plausibly cut off payment for an older patient’s treatment. The denials that follow are setting off heated disputes between doctors and insurers, often delaying treatment of seriously ill patients who are neither aware of the algorithms, nor able to question their calculations.
Older people who spent their lives paying into Medicare, and are now facing amputation, fast-spreading cancers, and other devastating diagnoses, are left to either pay for their care themselves or get by without it. If they disagree, they can file an appeal, and spend months trying to recover their costs, even if they don’t recover from their illnesses.
Ross and Herman note that the algorithms “promis[e] to deliver personalized care and better outcomes” but advocates say that “in many cases they do the exact opposite — spitting out recommendations that fail to adjust for a patient’s individual circumstances and conflict with basic rules on what Medicare plans must cover.”
Echoing the experience of the Center and other consumer advocates, providers report that the use of these tools hamper their ability to care for their patients. The report states: “[i]n interviews, doctors, medical directors, and hospital administrators described increasingly frequent Medicare Advantage payment denials for care routinely covered in traditional Medicare. Many said their attempts to get explanations are met with blank stares and refusals to share more information. The black box of the AI has become a blanket excuse for denials.”
The report also highlights the lack of oversight and regulation of such tools that plans rely on to make critical coverage decisions. Ross and Herman state that their investigation:
found that, for all of AI’s power to crunch data, insurers with huge financial interests are leveraging it to help make life-altering decisions with little independent oversight. AI models used by physicians to detect diseases such as cancer, or suggest the most effective treatment, are evaluated by the Food and Drug Administration. But tools used by insurers in deciding whether those treatments should be paid for are not subjected to the same scrutiny, even though they also influence the care of the nation’s sickest patients.
As noted in the STAT report, CMS has proposed to take some action to address the improper use of these tools:
regulators do not monitor these algorithms for fairness or accuracy, but the industry-wide blowback has forced the government to consider acting. Federal Medicare officials proposed new rules in December that say Medicare Advantage insurers can’t deny coverage “based on internal, proprietary, or external clinical criteria not found in traditional Medicare coverage policies.” Insurers also would have to create a “utilization management committee” that reviews their practices every year.
As discussed in this CMA Alert (Feb. 16, 2023), the Center submitted extensive comments to this proposed rule, including with respect to MA plans’ use of prior authorization and the growing use of algorithmic coverage determination software or tools analyzed in the STAT report (see pp. 12-27). The comment period just closed on another proposed rule that addresses prior authorization and interoperability in Medicare Advantage, Medicaid, the Children’s Health Insurance Program (CHIP), and Qualified Health Plans (QHPs) sold through the Affordable Care Act (ACA) Marketplaces. While the former focused primarily on the substance of MA prior authorization, the latter focused more on process, or procedure across several federal health insurance programs. The Center also submitted comments to this proposed rule, drafted in collaboration with other advocacy organizations.
The contents of these rules, when finalized, will determine to what extent CMS is going to regulate the use of these AI tools. Given that there are already rules in place that prohibit MA plans from using coverage criteria that is more strict than traditional Medicare, oversight and enforcement will be key. The current regulatory structure, including plan fines and other compliance measures, does not seem to deter such plan behavior, and when sanctions are levied, they are small enough to be treated as the cost of doing business for MA plans. Penalties must be strengthened in order to provide a meaningful deterrence for plans.
MA Industry Still Lobbying to Protect Their Profit
As discussed in previous CMA Alerts, CMS recently issued an Advance Notice, which includes proposed MA payment rates for 2024. Even though CMS has proposed a 1.03% increase in payment, the insurance industry has launched a misleading ad and lobbying campaign in order to scare MA enrollees into pressuring CMS to preserve the status quo. Final rates are expected soon.
One of the industry’s most vocal allies (behind many of the misleading ads currently circulating), the Better Medicare Alliance, recently issued a press release (March 14, 2023) claiming that various stakeholders are calling on CMS “to delay the agency’s proposed changes to Medicare Advantage until further review can be conducted and the impact of the proposal can be more fully understood.” In other words, the industry statement can be translated as follows: “let’s delay (and hopefully continue to delay or even thwart) some minor, long-overdue payment updates that will minimally affect overall MA payment.”
Thankfully, so far, CMS seems to be holding the line. As noted in an Inside Health Policy article titled “CMS Holds Firm As Plans, Providers Call To Delay MA Final Rate Notice” by Bridget Early (March 14, 2023), leadership at HHS and CMS have continued to push back against insurance industry propaganda. Early notes:
CMS Administrator Chiquita Brooks-LaSure told attendees at AHIP’s Medicare, Medicaid, Duals and Commercial Markets Forum on Tuesday (March 14) the agency was sticking by its goals with the advance notice, which AHIP and numerous other stakeholders have asked CMS to delay or withdraw. Brooks-LaSure noted CMS had two obligations when it structured the advance notice proposals: to ensure that the MA program meets the health care needs of enrollees, and to pay MA plans accurately as obligated under the law.
A growing chorus of independent stakeholders is supporting CMS’ efforts to rein in MA overpayments and is calling on CMS to go even further. For example, philanthropy Arnold Ventures recently issued a memorandum titled “Changes in Medicare Advantage are Essential for Cutting Fraud and Waste and Protecting Seniors” (March 14, 2023), which outlines “abusive insurance company billing practices” and misleading industry efforts to “scare seniors and intimidate Congress” and highlights the need for further efforts to crack down on such fraud and abuse. Arnold Ventures is also promoting the Action Now Initiative, including an ad campaign to highlight wasteful MA overpayments, as a counterweight to the well-funded insurance industry campaign. Arnold’s memo concludes:
BOTTOM LINE: CUTTING FRAUD AND ABUSE IS NOT A CUT TO MEDICARE.
With billions of dollars in play, it is important to set the record straight on Medicare Advantage: cutting insurance company fraud and abuse is not a benefit cut. First, CMS’ proposal represents a more than $4 billion increase in plan revenue in 2024, based on estimated Medicare Advantage payments in 2024. Last year, CMS finalized an 8.5% increase in plan payments. If the 2024 rates are finalized as proposed, Medicare Advantage plans will experience a nearly 10% payment increase over a two-year period. Not a cut, an increase. Second, insurers claim they will be forced to cut benefits as a result of this lower increase in payments. To be clear, any attempt to cut benefits is a choice that insurers make to put shareholders over seniors [emphasis in original].
What have Medicare Advantage enrollees – and the public – gotten in return for significant overpayments to MA plans? One “gift” to enrollees has been more restrictive Medicare coverage and care due to proprietary and unregulated AI-driven coverage determinations.
Rather than sweeping changes to payment and oversight, as claimed by the insurance industry, recent CMS proposals amount to a minor – and long-overdue – course correction for certain aspects of the MA industry. We urge CMS to go further to protect those currently enrolled in MA plans, and to protect the integrity of the Medicare program overall.
March 16, 2023 – D. Lipschutz