Medicare Advantage plans found to improperly deny claims
WASHINGTON — Medicare Advantage plans, the popular private-insurance alternative to the traditional Medicare program, have been improperly denying many medical claims to patients and physicians alike, federal investigators say in a new report.
The private plans, which cover more than 20 million people — more than onethird of all Medicare beneficiaries — have an incentive to deny claims “in an attempt to increase their profits,” the report says.
The findings, by the inspector general at the Department of Health and Human Services, come as policies in Washington are creating new incentives for older Americans to enroll in Medicare Advantage plans. Some experts predict that the share of Medicare patients in the private plans could grow to half in a few years.
“Because Medicare Advantage covers so many beneficiaries, even low rates of inappropriately denied services or payment can create significant problems for many Medicare beneficiaries and their providers,” said the report by the inspector general, Daniel Levinson.
Medicare’s annual open-enrollment period starts Monday, and beneficiaries can join Medicare Advantage plans, switch plans or return to original Medicare.
But the inspector general’s report underlines potential concerns for consumers. Investigators found “widespread and persistent problems related to denials of care and payment in Medicare Advantage.”
Relatively few people appeal the denial of claims, leaving insurers free to avoid payment. But those who do appeal often succeed. About 75 percent of appeals are successful at the first level of review.
More and more beneficiaries are choosing Medicare Advantage because, as the name indicates, the plans offer potential advantages, including a doctor who can coordinate care. Private plans have an annual limit on outof-pocket expenses; traditional Medicare does not.
Federal officials predict that enrollment in Medicare Advantage plans will climb next year to 22.6 million, or 36 percent of beneficiaries. The total number of people covered by Medicare is expected to reach 72 million by 2025, up from 60 million today.
Even as the inspector general’s report was issued, on Sept. 27, doctors and patients and members of Congress were expressing concern about some practices of Medicare Advantage plans.
“Patients may be encountering barriers to timely access to care that are caused by onerous and often unnecessary prior authorization requirements,” said a letter sent to President Donald Trump’s administration earlier this month by a bipartisan group of more than 100 lawmakers.
Insurers defend the requirements. They “protect patients from unnecessary and inappropriate care” and help reduce costs, said Matt Eyles, the president and chief executive of America’s Health Insurance Plans.
Medicare plans receive fixed monthly payments from the government. In return, they are supposed to provide the full range of services that patients need. If they keep patients healthy and reduce the need for hospitalization, they can often keep costs below what they are paid by Medicare.
But denying services can also keep down costs. In the past two years, Medicare has imposed more than $10 million in fines and taken other enforcement actions against private plans for overcharging beneficiaries, denying or delaying coverage for prescription drugs, and failing to respond to patients’ complaints.