On December 7, the Medicare Annual Coordinated Election Period (AEP) ended. This is the period during which individuals with Medicare can make coverage choices for the coming year. One thing that sets this AEP apart from prior years’ is that we will soon be crossing – or have already crossed – the threshold of half of all Medicare beneficiaries enrolled in a Medicare Advantage (MA) plan, moving the Medicare program farther along the path toward privatization.
Despite growing evidence that MA plans are overpaid in relation to traditional Medicare, glaring problems with access to care experienced by many MA enrollees (including network restrictions and prior authorization), and decidedly mixed health outcomes of MA enrollees, this tectonic shift in Medicare is occurring without adequate oversight and intervention by Congress and regulators at the Medicare program. As outlined below, these issues thankfully seem to be getting more attention in the media and independent reports. We urge policymakers to respond in kind.
More Balanced Media Coverage
As discussed in recent CMA publications, including our “Special Report | Recent Articles and Reports Shed Light on Medicare Advantage Issues” (Oct. 31, 2022), we are hopeful about what we perceive to be increased news coverage about Medicare, Medicare Advantage, and needed improvements, that is more objective, and neutral. This AEP saw a number of articles and reports that highlighted various Medicare Advantage enrollment pitfalls, MA plan and agent/broker misconduct, access to care problems in MA plans, and other issues the insurance industry was not likely to promote during the enrollment season, but about which beneficiaries should be aware.
For example, Marketplace Morning Report did radio segments at the end of the AEP that touched on the challenges of making coverage decisions, the trade-offs of MA vs. traditional Medicare enrollment, and some of the broader, systemic concerns facing the Medicare program. Here is an excerpt from “What’s the difference between traditional Medicare and Medicare Advantage?” by Sabri Ben-Achour, Chris Farrell, and Erika Soderstrom (Dec 5, 2022):
Ben-Achour: Why is Medicare Advantage controversial?
Farrell: These plans have been hit with numerous scandals. There have been federal audits show[ing] widespread overcharges and errors in payments, as well as unjustified denial of claims. And companies have been charged with misleading consumers about their benefits. So the bottom line is the insurance companies have figured out how to do well with their Advantage plans. It’s unclear with the enrollees and taxpayers.
Ben-Achour: Well, are there any changes imminent or do people just have to be really careful when they sign up?
Farrell: Be really careful because here’s the thing, Congress isn’t paying enough attention. You know, for Medicare enrollees the choice between traditional Medicare and Medicare Advantage plans or between the various Medicare Advantage plans, it’s just too complex and confusing. Simplification would really help. And there is a push to level the playing field between traditional Medicare and Advantage plans and that would be good. But in essence, Medicare is being privatized without much debate and without strong evidence that enrollees come out ahead from the shift.
The following day, in a segment called “Is Medicare Advantage worth the short-term savings?” by David Brancaccio, Jarrett Dang, and Erika Soderstrom (Dec 6, 2022), Marketplace Morning Report interviewed Dr. Fred Hyde, an independent consultant in healthcare finance and an adjunct associate professor at the Georgetown University School of Health and School of Nursing. Dr. Hyde noted that “Medicare Advantage is, simply put, bringing managed care to Medicare. It’s the privatization, if you will, of the Medicare program.” After discussing some of the reasons someone might be interested in enrolling in an MA plan, including “short-term economic avoidance of pain,” he discussed two issues that played into his own selection of traditional Medicare:
One of the weaknesses is what is referred to as a limited network. Is your doctor in this network? Is your hospital in this network? That’s a very large issue. […]. Now, here’s the second problem — this is a big one: There is a Medicare Advantage managed-care tactic called “prior authorization.” Prior authorization is simply what it sounds like, your doctor thinks you need this test. But your doctor’s word is not good enough. The Medicare Advantage plan has to have someone who is generally not a doctor, who is generally just checking a box and at an 800 number, decide whether or not you need that test. What-the-heck kind of plan is that?
Mixed Outcomes in MA
The health insurance industry frequently touts that Medicare Advantage is the “better” option for Medicare beneficiaries, in part, because it has “better” health outcomes among enrollees. As discussed in a recent CMA Alert (Sept. 21, 2022) highlighting a Kaiser Family Foundation report analyzing 62 studies published since 2016 that compare MA and traditional Medicare on a number of measures, the report “found few differences between Medicare Advantage and traditional Medicare that are supported by strong evidence or have been replicated across multiple studies.” As discussed in the above-referenced Alert, some of the differences were concerning, including the rate of switching from MA to traditional Medicare, shorter lengths of stay with post-acute care, and affordability.
In fact, reports highlighting how MA underperforms traditional Medicare continue to come to light. Of particular concern, for example, “Type of Medicare Could Influence Cancer Patients’ Outcomes” by Dennis Thompson, U.S. News & World Report (Nov. 28, 2022) discusses a November 2022 report in the Journal of Clinical Oncology titled “Medicare Advantage: A Disadvantage for Complex Cancer Surgery Patients.” The U.S. News article states:
Americans enrolled in a privatized, cost-saving Medicare Advantage plan are more likely to die within a month of undergoing complex cancer surgery, compared to those in traditional Medicare, the researchers found.
Those covered by Medicare Advantage were 1.5 times more likely to die within a month after having their stomach or liver removed, and twice as likely if they had cancer surgery of the pancreas, according to findings published Nov. 21 in the Journal of Clinical Oncology.
The article goes on to note that:
Medicare Advantage beneficiaries tend to experience a delay of more than two weeks between diagnosis and their first round of treatment — possibly because those plans require that patients get prior authorization for their cancer therapy.
Differences are also being erased in many areas in which MA once outperformed traditional Medicare. For example, a Journal of American Medical Association (JAMA) editorial titled “How Much of an “Advantage” Is Medicare Advantage?” by David J. Meyers, PhD, MPH; Andrew M. Ryan, PhD; Amal N. Trivedi, MD, MPH (Dec. 6, 202) discusses a study published in the same volume that compares 30-day mortality and treatment for Medicare Advantage and traditional Medicare patients presenting with acute myocardial infarction (MI) from 2009 to 2018. The editorial notes that the study “found that while Medicare Advantage was associated with lower 30-day mortality in 2009, differences in mortality and almost all quality measures between the programs were largely erased by 2018.”
This JAMA editorial outlines many of the current MA-related challenges in the Medicare program, and is worth quoting here more extensively:
While prior studies have shown potential benefits of Medicare Advantage, others have found some areas of concern for Medicare Advantage patients. Many Medicare Advantage plans have narrow networks of physicians, and the beneficiaries receive care from lower-quality hospitals, nursing homes, and home health providers than those in traditional Medicare. Medicare Advantage beneficiaries who have greater health needs tend to disenroll from plans at higher rates, and they may face high rates of prior authorization to receive care.
What are we to make of the Medicare Advantage program overall? The study by Landon et al, along with research over the last decade, suggests that the association between Medicare Advantage and higher quality of care is modest at best. At the same time, extensive research suggests that Medicare Advantage plans are overpaid due to structural factors in the program design. These factors include risk-adjustment, plans’ upcoding of disease severity, and inflated bonus payments for quality performance. One recent report suggested that overpayments to Medicare Advantage may be larger than total spending on some federal agencies such as the National Aeronautics and Space Administration or the Federal Bureau of Investigation. Medicare Advantage will eventually become the dominant form of Medicare coverage. Barring the unlikely passage of new legislation to substantially change the program, this trajectory of Medicare Advantage growth is likely to continue. Research should shift toward understanding how Medicare Advantage can be redesigned to reduce overpayments and deliver care of value [citations omitted].
Criticism of Problems with MA Plans is Growing
In addition to various independent reports raising concerns about the MA program issued by the Office of Inspector General, the General Accounting Office, the Medicare Payment Advisory Commission and others, various stakeholders and commentators are increasingly voicing concerns about the MA program and calling for action.
A recent opinion piece titled “Medicare Advantage? More like Medicare Disadvantage” by Helaine Olen, Washington Post (Nov. 30, 2022) states:
Medicare Advantage plans, which are private insurance plans for seniors paid for with federal dollars, originated as a government savings strategy, on the theory that the private sector could improve on government performance at a lower cost. But over the past two decades, it has become clear that Medicare Advantage does not result in improved care for less money. Instead, it will come as no surprise to Americans familiar with the health insurance industry that insurers found a way to turn it into yet another profit center, while putting bureaucratic roadblocks in the way of patients.
Olen goes on to note:
Medicare Advantage defenders are quick to point out that surveys show their enrollees are more likely to receive such preventive health and wellness services as monitoring of high blood pressure than those with the traditional program. But it’s usually when someone gets seriously ill that Medicare Advantage’s weaknesses become clear.
What would be best would be to fix Medicare, to make it more generous to enrollees and less generous to insurers. That’s unlikely to happen. But we can at least insist on calling it out for what it is: Try Medicare Disadvantage.
Bucking a trend of unquestioning support for the Medicare Advantage program, actively curated by the insurance industry, some policymakers are also expressing concern. For example, in an article in The Nation titled “It’s Time to End the Medicare Advantage Scam” by Rep. Ro Khanna, Rep. Mark Pocan and Wendell Potter (Dec. 9, 2022), the authors, which include two members of Congress, note:
Unlike ads for prescription drugs, insurance companies are not required by law to mention the side effects on patients, but Americans deserve to know about the many disadvantages of Medicare Advantage. For example, unlike real Medicare, doctors often must get approval from the insurer in advance before treating their Medicare Advantage patients. Additionally, these private plans often have inadequate networks of doctors, hospitals, and other essential facilities. This stands in stark contrast to actual Medicare, where nearly all doctors and hospitals are available to patients without a referral.
The authors take a stand concerning the need to protect and preserve the traditional Medicare program:
Only Medicare is Medicare. It is one of the most popular and important services the government provides. Congress should be working around the clock to strengthen and expand Medicare to include coverage for dental, vision, and hearing care. We cannot allow this Trojan horse for Medicare privatization to continue deceiving seniors and ripping off taxpayers.
The health care market is confusing for consumers, and misleading branding like private Medicare Advantage plans just makes it worse. But Congress has the chance to stand up for seniors with the Save Medicare Act. It will end this scam by renaming so-called “Medicare Advantage” plans, prohibiting private insurers from using the word “Medicare” in plan titles or advertisements, and imposing significant fines for any insurer that engages in this deceptive practice. The Medicare enrollment season should not be a confusing and misleading minefield for our nation’s seniors and others who depend on this essential program. Congress can and should pass the Save Medicare Act to end the Medicare Advantage scam and prevent any and all efforts to privatize Medicare. For our nation’s seniors—and for every taxpayer—it’s the right thing to do.
In addition, as discussed in this CMA report: “Senate Report Highlights Widespread Medicare Advantage Marketing Misconduct – But the Driving Forces of Misconduct Are Broader” (Nov. 10, 2022), the Senate Finance Committee Majority Staff recently issued a report about MA marketing misdeeds, and called for increased oversight and regulation.
Providers who deliver care to MA enrollees also appear to be speaking up about MA concerns with growing frequency. As discussed in a CMA Alert (May 5, 2022) concerning the April 2022 HHS Office of Inspector General report titled “Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials” we noted that “many providers and provider groups who actually provide care and services to MA enrollees have concurred with and pointed to the report’s findings as a notice to policymakers that something must be done in response.”
More recently, in a MedPage Today article titled “Should Doctors Warn Patients About the Downsides of Medicare Advantage Plans?” by Cheryl Clark, (Dec. 8, 2022), the author notes that “[d]octors, especially specialists, said they have concerns about how exaggerated claims on TV ads and other marketing material mislead patients into thinking they can continue to see any doctor they had been seeing prior to their switch.” This can lead to, among other things, patients no longer being able to see their doctor, and new struggles with MA prior authorization requirements. The article highlights that “[s]ome doctors think they should go out of their way to alert” their patients “to the downsides of these plans before they change their coverage.” For example,
NYU Langone bioethicist Arthur Caplan, PhD, said that not only can doctors talk with their patients, they should. “Doctors have a duty to inform patients to the extent they know about the upsides and downsides of Medicare Advantage, especially if their older patients are getting heavy pressure from home care and other companies to sign up.”
And if the doctors don’t know, “they ought to direct patients to elder law attorneys, whether the patients ask or not. And it’s especially true if the patient is overwhelmed and needs family or friends’ involvement. Preventing fiscal toxicity and loss of access is an important, admirable, and virtuous thing to do if providers can do so.”
Oversight of MA Plans
Over the last several years, a number of unimplemented recommendations concerning improving and enhancing various aspects of MA oversight have been issued by the Office of Inspector General, the General Accounting Office and the Medicare Payment Advisory Commission – as well as consumer advocacy organizations (see, generally, citations in Center for Medicare Advocacy’s response to CMS’ Request for Information about MA plans, Aug. 31, 2022, available here).
Evidence of the scope of past and current overpayment to MA plans is glaring, yet policymakers have done little to address this issue. In an ongoing analysis of CMS audits of MA plans to determine the scope of such overpayments, reporters Fred Schulte and Holly Hacker from Kaiser Health News (KHN) in an article titled “How Medicare Advantage Plans Dodged Auditors and Overcharged Taxpayers by Millions” (Dec. 13, 2022) discuss their review of 90 government audits for 2011 through 2013, finding that “health insurers that issue Medicare Advantage plans have repeatedly tried to sidestep regulations requiring them to document medical conditions the government paid them to treat.” Noting that “auditors uncovered millions of dollars in improper payments” the reporters state:
The costs to taxpayers from improper payments have mushroomed over the past decade as more seniors pick Medicare Advantage plans. CMS has estimated the total overpayments to health plans for the 2011-2013 audits at $650 million, yet how much it will eventually claw back remains unclear.
Payment errors continue to be a drain on the government program. CMS has estimated net overpayments to Medicare Advantage plans triggered by unconfirmed medical diagnoses at $11.4 billion for 2022.
Inflated payments to MA plans, and other imbalances with traditional Medicare, including the scope of covered items and services, and ease of enrollment into MA compared with Medigap (and even Part D plans) is begging to be addressed (see, generally, CMA website here). Access to care for MA enrollees is another problem we frequently encounter; here, though, there is reason for some cautious optimism that CMS, as the regulator, may be taking steps to address at least some of these problems, including MA marketing misconduct and plan prior authorization (See our companion Alert).