Care lags in Medicare Advantage
Federal report finds thousands of legitimate bills are being denied
More Texans are enrolling in Medicare Advantage plans, which are marketed to offer more services at a lower cost than the traditional fee-for-service plan known as Medicare Part B. But a new federal report indicates this may not be true.
About 2.1 million Texans are enrolled in Medicaid Advantage plans. That’s roughly an 80 percent increase from the 1.2 million in 2016, when the Centers for Medicare and Medicaid first began posting Medicare Advantage data online.
This may seem like a good thing, especially in Texas, where 1 in 6 people don’t have health insurance. But plans like these can leave older Americans, many of them on fixed incomes, strapped with surprise medical bills.
Medicare Advantage is offered by private companies approved by Medicare. The plans, which combine the different parts on Medicare, charge modest premiums, but are primarily funded by the federal government. They operate like HMOS or PPOS, benefiting by controlling cost. They typically require patients to stay in networks to avoid additional charges, as well as requiring pre-approvals for some services, prescription drugs and procedures.
A report from the Inspector General’s office of the Health and Human Services Department released in April found that Medicare plans were denying claims for necessary care that should be covered under the program. Investigators sifted through more than 12,000 instances in which the insurer denied payment for services that the investigators found to be medically necessary. About 13 percent of those denials met Medicare coverage rules. In other words, would have been covered by government-run Medicare Part B.
It’s not only federal agencies that raised concerns over this practice. The American Hospital Association wrote in a statement that Medicare Advantage Organizations may be taking advantage of prior authorization, the process of approving a procedure or prescription as medically necessary before the insurer will cover it.
“Patients are often blindsided by denials and can face unexpected medical bills as a result,” the statement said. “The extensive approval process that doctors and nurses must go through adds billions of wasted dollars to the health care system and contributes to clinician burnout.”
The inspector general’s report also points out that these denials disproportionately hurt people who cannot afford to pay for their care without insurance as well as the critically ill who may suffer more from delayed or denied care.
Experts also have said the financial stress of medical costs and debt can reduce quality of
life, especially for those who suffer from chronic illness.
The authors of the report recommended that the Centers for Medicare and Medicaid update audit protocols and issue new guidance on how Medicare Advantage Organizations should determine if something is medically necessary. CMS said it would adopt the recommendations.
Not the first time
The April report isn’t the first time Medicare Advantage was found to have improperly denied payment for certain services. In 2018, the office of the inspector general published a report that had similar findings.
The 2018 report found that when patients and providers appealed payment denials, Medicare Advantage Organizations overturned 75 percent of their own denials from 2014 to 2016, or about 216,000 denials each year.
“The high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided,” the report stated. “This is especially concerning because beneficiaries and providers rarely used the appeals process, which is designed to ensure access to care and payment.”
The inspector general recommended that Centers for Medicare and Medicaid “enhance its oversight” of Medicare Advantage contracts, write letters to Medicare Advantage companies that had high rates of denials and make sure enrollees have information about Medicare Advantage violations.