At a time when Medicare Advantage (MA) enrollment has surpassed 50% of the Medicare population, overpayments to MA plans now exceed $75 billion annually (see, e.g., CMA Alert, June 22, 2023) and access to care problems, including inappropriate use of prior authorization, are widespread, Congressional and Administrative actions have not kept pace in order to adequately safeguard the Medicare program and its beneficiaries.
The Biden Administration has taken some measures to address some of these issues. As discussed in the Center for Medicare Advocacy’s “Special Report: Recent Medicare Advantage (MA) and Part D Rule – Important Consumer Protections re: MA Prior Authorization and Marketing” (May 2023), the Centers for Medicare & Medicaid Services (CMS) released a final rule for 2024 that includes a number of significant improvements to the rules surrounding Medicare Advantage plans’ use of prior authorization and includes important consumer protections surrounding plan marketing, among other changes. Additional regulations concerning prior authorization are pending. In a modest effort earlier this year to seek more accurate payment to MA plans, however, CMS backed off of a more timely and impactful proposal following a well-funded and high-pressure campaign by the insurance industry (see, e.g., this CMA Alert (April 6, 2023)).
For its part, aside from welcome hearings exploring MA prior authorization, provider directories, and a few other issues, Congress has not taken meaningful action to rein in MA program excesses and protect plan enrollees. This is despite documentation of ongoing problems faced by MA enrollees, as discussed below.
Prior Authorization and Denials
Medicare Advantage (MA) plans’ use of prior authorization, often resulting in inappropriate denials or delays in care, continues to get warranted attention in the media. As highlighted in a previous CMA Alert (March 16, 2023), earlier this year STAT News issued a report analyzing algorithmic or artificial intelligence (AI) driven coverage determination software and tools used by some MA plans in order to determine coverage for care in certain settings. The article, 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) outlined how:
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 [but] [t]he 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.
In a follow up STAT News article titled “How UnitedHealth’s acquisition of a popular Medicare Advantage algorithm sparked internal dissent over denied care” (July 11, 2023) Casey Ross and Bob Herman focus on one of the most prominent algorithmic tools, administered by NaviHealth, “a company that uses computer predictions to help control the cost of caring for millions of older and disabled Americans on privatized Medicare plans.” The article highlights internal complaints by employees at the company who “raised alarms that efforts to bypass the algorithm — and pay for longer rehab stays — were getting slapped down at higher levels of the organization.” The authors state:
The company’s adherence to the algorithm, even when clinicians disagreed, is a powerful example of the potential dark side of artificial intelligence and its incursion into health care. As large corporations gain control of increasingly powerful and largely unregulated AI tools, patients may find themselves at the mercy of machines that operate behind the scenes of their care, making money for big businesses even if following their advice hurts everyday people.
While “NaviHealth managers have said the algorithm is not used to make coverage determinations” Ross and Herman state that:
a deeper look inside NaviHealth reveals the algorithm is, in fact, a focal point for determining coverage. It puts the process in motion, sets the deadline for coverage decisions, and provides information that can influence the outcome. In some cases, the algorithm was used in coverage decisions that may violate Medicare’s rules, which are designed to protect the safety and dignity of beneficiaries. The investigation revealed that even in instances when staffers argued that patients needed more time in rehab, NaviHealth’s physician medical reviewers deferred to the algorithm, fueling internal dissent that the denials were inappropriate and contrary to clear medical evidence.
The article further noted that NaviHealth has not disclosed where the data they rely upon comes from, and whether there were any peer-reviewed studies assessing “the algorithm’s accuracy in predicting discharge dates as measured against the outcomes of patients.” “Furthermore, because its projected length of stay is based on an average, patients who are sicker than average could get cut off from care prematurely.” The article goes on to highlight the experience of the late Gary Bent, a Connecticut Medicare beneficiary and client of the Center for Medicare Advocacy, whose story was highlighted by his wife Gloria Bent at a May 2023 hearing of the Senate Homeland Security & Governmental Affairs Committee, Permanent Subcommittee on Investigations chaired by Senator Richard Blumenthal (CT), as discussed in a previous CMA Alert (May 18, 2023).
As the Center for Medicare Advocacy described in a previous CMA Alert (May 5, 2022), following the release of an Office of Inspector General (OIG) report in 2022 concerning inappropriate MA denials, provider groups seem to have become more vocal in expressing their concerns about MA plan denials and prior authorization. One recent examples is an article in Skilled Nursing News titled “’Astronomical’ Medicare Advantage Denials, Pre-Auth Issues Cause Outcry from Nursing Homes,” by Zahida Siddiqi (Jul. 5, 2023). The author notes:
Insurers often provide no evidence of overutilization for targeted procedures and treatments and continue to delay and even deny covering necessary care and overstep medical decision-making, according to clinicians and administrators affiliated with nursing homes.
In an article published by The Lever titled “Care Denied: The Dirty Secret Behind Medicare Advantage ‘ (Jun 28, 2023), Matthew Cunningham-Cook highlights the barriers to care faced by several MA enrollees, including Jenn Coffey who “says UnitedHeath constantly rejected or second-guessed the care options her doctors suggested for her cancer recovery and for a rare and painful secondary disease that has no standard treatment plan.” The author states that “these denials have disastrous impacts for ordinary people’s lives, as detailed in numerous patient stories shared with The Lever. And the total instances of denied care are likely vastly understated.” Cunningham-Cook states:
As the privatization of Medicare via insurer-owned Medicare Advantage plans expands to half of Medicare beneficiaries — 31 million people — care denials by Medicare Advantage insurers are threatening the foundational premise of the government’s health care safety net for seniors and people with disabilities: that people in Medicare should get the care that is recommended by a doctor.
The author further notes that:
Care denials are a feature, not a bug of Medicare Advantage plans. Traditional Medicare was founded on the principle that seniors and disabled people would get the care they need because it covers care without an insurer middleman, instead making set payments directly to health care providers. But by creating Medicare Advantage, Congress inserted private insurers into Medicare, who have an inherent incentive to deny care. The less medical attention they provide beneficiaries, the more government money they can pocket as profits.
A recent New York Magazine article titled “The Two Words That Can Make Health Care a Nightmare – Prior authorization buries doctors in paperwork and delays care, sometimes with disastrous results” by Chris Stanton (July 10, 2023) analyzes the history and widespread use of prior authorizations by health insurance plans. The article highlights the experiences of Dan Hurley, himself a physician, navigating the “roadblocks” of prior authorization and insurance plan denials while trying to obtain treatment for an aggressive cancer.
In an article titled “How Often Do Health Insurers Say No to Patients? No One Knows” (June 28, 2023) published by ProPublica as part of a series titled “Uncovered” that explores insurance company denials, reporter Robin Fields examines the lack of data about insurance company denials across different health programs, including Medicare and the Affordable Care Act exchanges Fields notes that, in general:
how often insurance companies say no is a closely held secret. There’s nowhere that a consumer or an employer can go to look up all insurers’ denial rates — let alone whether a particular company is likely to decline to pay for procedures or drugs that its plans appear to cover.
Looking across health programs, the reporter adds:
The limited government data available suggests that, overall, insurers deny between 10% and 20% of the claims they receive. Aggregate numbers, however, shed no light on how denial rates may vary from plan to plan or across types of medical services.
There is some hope that some of these data gaps will be filled. As noted by Inside Health Policy in an article titled “Majority Of Congress Pushes CMS To Finalize Prior Auth Reforms” by Bridget Early (June 21, 2023), a majority of lawmakers in both the House and the Senate recently “pressed CMS to strengthen and finalize rules to reduce prior authorization hurdles posed by Medicare Advantage plans — rules that the lawmakers ask the administration to align with legislative proposals that similarly aim to make it easier for patients to get around insurers’ hurdles, but have stalled due to their high cost.” The Improving Seniors’ Timely Access To Care Act, which passed the House last year but was not taken up by the Senate, would, among other things, significantly improve data reporting and collection requirements concerning MA plans’ use of prior authorization.
More Retirees Forced into MA Plans
While overpayments to MA plans, which allows them to offer attractive supplemental benefits, coupled with limited rights to purchase Medigap policies in most states, leads to increased MA enrollment, some MA enrollees have no say in choosing their coverage. An article in Forbes titled “Medicare Advantage Retiree Plans Save Employers Money But Create Issues For Retirees” by Diane Omdahl (July 11, 2023) documents the growth in employers forcing retirees into MA plans – noting that “half of large employers offering health benefits to Medicare-age retirees do it through a contract with a Medicare Advantage plan.” Citing KFF research, the article states that almost 45% of employers offering MA plans do not give retirees the choice to keep other, non-MA coverage. The author notes:
Today, half of large employers offering health benefits to Medicare-age retirees do it through a contract with a Medicare Advantage plan. Big names making the change recently include IBM, AT&T, and American Airlines Flight Attendants. Medicare Advantage coverage for New York City’s 250,000 retirees was going to start on September 1 but that’s on hold after a judge’s ruling.
A big factor driving this shift, of course, is money. KFF Health News notes that “employer-sponsored plans receive billions of dollars in federal payments” and that the government is paying most of the healthcare costs. New York City alone could save up to $600 million annually by switching to Medicare Advantage for its retirees.
The author cautions retirees to remember 3 points: “[r]etiree coverage can be a lifelong option so choose wisely”; “[t]he plan is in charge; and “[k]now that the coverage can change”.
Access to Care
In addition to inappropriate use of prior authorization, as discussed above, barriers to care in MA plans include often limited provider networks. For example, the New York Times, in an article titled “Medicare Advantage Plans Offer Few Psychiatrists” by Reed Abelson (July 5, 2023), described a report recently published in Health Affairs that found:
People with private Medicare coverage may not be getting the mental health services they need because they cannot find a psychiatrist within their plan’s network […] More than half of the counties the researchers studied did not have a single psychiatrist participating in a Medicare Advantage plan, the private-sector counterpart to traditional Medicare.
The report found that of the MA provider networks reviewed, “fewer than a quarter of available psychiatrists in a plan’s network” compared to provider networks offered through Affordable Care Act exchange plans and Medicaid managed care which “were not as restrictive and included about 40 percent of the available psychiatrists”.
As the Center for Medicare Advocacy has asserted elsewhere, much more oversight and accountability of the MA program is needed. The Medicare program and its beneficiaries require a more robust response from both Congress and the Administration to protect and preserve the traditional Medicare program and rein in the excesses of Medicare Advantage.
July 13, 2023 – D. Lipschutz