Medicare Advantage Denials
As discussed in a recent CMA Alert (August 25, 2022), the Center for Medicare Advocacy has seen an alarming increase in complaints from Medicare Advantage enrollees who, despite requiring skilled nursing facility (“SNF”) care, receive notices that their Medicare Advantage (MA) plan terminated coverage of their SNF care. Although these patients frequently win expedited appeals of the Medicare coverage denials, their MA plans often respond by issuing a new termination notice within several days of a successful appeal, essentially starting the coverage denial process over again and forcing enrollees and their families to respond to a barrage of routine coverage denials. These denials conflict with the opinions of the beneficiaries’ providers, the skilled nursing and/or skilled therapy required, and the total condition of the patient.
On October 4, 2022, Kaiser Health News published an article by Susan Jaffe titled “Nursing Home Surprise: Advantage Plans May Shorten Stays to Less Time Than Medicare Covers” which addresses this issue. The article highlights one of the Center’s clients, quotes our attorney Eric Krupa, and links to a grievance form created by Center attorney Justin Lalor, cited in our previous CMA Alert, which can be used to complain about multiple denials issued by MA plans (download the form and instructions at https://medicareadvocacy.org/wp-content/uploads/2022/08/MA-Grievance-Form.docx). (Note, a Grievance will not change the actual denial – an Appeal must be filed for that purpose.)
In short, the article highlights that “[h]ealth care providers, nursing home representatives, and advocates for residents say Medicare Advantage plans are increasingly ending members’ coverage for nursing home and rehabilitation services before patients are healthy enough to go home.” The article includes quotes from provider organizations, including the American Health Care Association, which represents nursing homes, expressing “significant concerns’ about large Advantage plans cutting off coverage. ‘The health plan can determine how long someone is in a nursing home typically without laying eyes on the person.’” A representative of the Society for Post-Acute and Long-Term Care Medicine noted that “[t]he problem has become ‘more widespread and more frequent,’ […adding that] ‘It’s not just one plan,’ he said. ‘It’s pretty much all of them.’”
Medicare Advantage Overpayments
A recent and notable article about Medicare Advantage was published in the New York Times, titled ‘The Cash Monster Was Insatiable’: How Insurers Exploited Medicare for Billions” (Oct. 8, 2022) by Reed Abelson and Margot Sanger-Katz. This article focuses on “how major health insurers exploited the [Medicare] program to inflate their profits by billions of dollars.” Noting that most large insurers offering MA plans have been accused of fraud in various lawsuits, the article outlines how MA insurers, “among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits” and “[a]s a result, a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.”
The article notes that even conservative estimates of the scope of such overpayment ($12 billion in 2020 alone, according to MedPAC), would be enough to “cover hearing and vision care for every American over 65.” As discussed in a previous CMA Alert (March 3, 2022), for a brief period of time during the Build Back Better debate , Congress contemplated reining in these overpayments to help pay for expanding dental, hearing and vision services for all Medicare beneficiaries – not just those enrolled in private plans – until the insurance industry stepped in to keep things the way they are.
Noting that there are trade-offs in enrolling in Medicare Advantage rather than traditional Medicare, the article states that MA plans “often have lower premiums or perks like dental benefits — extras that draw beneficiaries to the programs. The more the plans are overpaid by Medicare, the more generous to customers they can afford to be.” This phenomenon, of course, draws more people to MA, accelerating the privatization of the Medicare program.
Not surprisingly, the insurance industry is trying to change this narrative by claiming that MA actually saves Medicare money – despite overwhelming evidence to the contrary. For example, STAT recently published an article titled “Health insurers are painting a misleading picture of Medicare Advantage savings, experts say” (Sept. 26, 2022), by Bob Herman, which documents how “[t]he health insurance industry is continuing its campaign to convince the public that Medicare Advantage saves taxpayers money, but experts say federal data still concludes the exact opposite — and that the program as currently designed is a drain on Medicare’s trust fund.”
The Urban Institute recently added another analysis of MA overpayments in a paper titled “Understanding Medicare Advantage Payment: How the Program Allows and Obscures Overspending” (Sept. 27, 2022) by Robert A Berenson, Bowen Garrett and Adele Shartzer. Among other things, the paper describes components of the MA payment system, how they contribute to overpayment to MA plans, and outlines reform proposals “that would improve MA and generate program savings that could help shore up Medicare’s financing or reduce federal budget deficits.” As simply stated in the report’s introduction, “although MA was also supposed to generate Medicare program savings, it never has.”
The Center for Medicare Advocacy has long called upon policymakers to address the growing imbalance between Medicare Advantage and traditional Medicare, and to step up enforcement over plans to stop plans’ inappropriate denials and delays in care. It is long past time to act.
October 13, 2022 – D. Lipschutz