Doctors, patients, and seniors groups are airing new grievances about Medicare Advantage, arguing the growing government program is failing seniors and making life miserable for doctors and other providers.
But health insurance companies — most of which make sizable profits on the MA plans they offer — are defending the private alternative to traditional Medicare. They say MA remains popular among those who pick their plans and provides extra benefits that help keep older adults healthy. The insurance industry’s primary lobbying group also hinted at litigation if the government moved forward with a regulation that would beef up audits on MA plans.
This summer, the Biden administration asked the public to submit thoughts on ways to improve the Medicare Advantage program, which will likely encompass a majority of all Medicare beneficiaries by next year. The feedback won’t affect 2023 MA plans, which are solidified and will start enrolling people next month. But it could influence how the government approaches regulations for 2024, which will come out in February.
The Centers for Medicare and Medicaid Services received roughly 4,000 comments about MA ahead of a deadline last week. Several independent patient groups repeated their longstanding concerns that federal policymaking has favored and propelled the growth of Medicare Advantage plans, which cost taxpayers more money than the traditional program, and that many patients remain in the dark about the program’s tradeoffs, such as limited networks of hospitals and doctors.
“We hear from beneficiaries — commonly those who are sicker and have greater health needs — who have been poorly served by their MA plan,” the Center for Medicare Advocacy told the federal government. “Certainly, beneficiaries in traditional Medicare face barriers to coverage and care, which we devote much of our time addressing. However, from our experience assisting Medicare beneficiaries, and borne out by independent research, many of these barriers are exacerbated for beneficiaries enrolled in Medicare Advantage.”
A dominant complaint among the comments centered around prior authorization, which is when hospitals, doctors, and other providers have to get approval from insurers in advance for whatever care or drugs they think the patient needs. Federal rules currently allow MA plans to take up to 14 days to respond to a prior authorization request from a provider.
Earlier this year, the Department of Health and Human Services’ Office of Inspector General found that MA plans routinely deny necessary care through prior authorizations. Many of those denials were overturned if they were appealed.
James Webb, a musculoskeletal radiologist in Tulsa, Okla., focuses on treating patients who have osteoporosis. Roughly 60% of his patients are on Medicare, he said, and many who have spinal fractures need a procedure called kyphoplasty. But some of the insurers he works with either don’t cover kyphoplasty anymore, or they require intensive prior authorization paperwork. Traditional Medicare, however, covers the procedure.
“It’s always a moving target with the Medicare Advantage plans,” Webb told STAT. “It’s seemed really bad in the last three years.”
Opioid treatment providers in New Jersey told Medicare officials that one MA plan requires prior authorization every 90 days for an outpatient opioid service called medication-assisted treatment — even though the state outlawed prior authorizations for that treatment in 2019.
Prior authorizations are common outside of Medicare and often target high-priced procedures and drugs, as well as care that lacks strong clinical evidence. They “are a necessary safeguard that ensure consumers receive only clinically appropriate care,” Ceci Connolly, CEO of the Alliance of Community Health Plans, wrote to federal officials. ACHP lobbies on behalf of regional health plans owned by hospitals and doctors.
Several groups also raised concerns that MA plans are not including enough hospitals, doctors, addiction treatment centers, and other facilities in their networks, or still have erroneous directories of who is in-network. Out-of-pocket costs are capped every year for people who enroll in MA plans, a perk that doesn’t exist in traditional Medicare. But that often comes at the expense of these narrower networks.
“Many times Medicare Advantage insurers require these patients to travel 30-plus miles to a specialty pharmacy and ambulatory surgical center that the insurer owns to receive the care they need,” Wichita County Health Center CEO Teresa Clark wrote in a letter that was copied by several rural Kansas hospitals. Indeed, many of the companies that offer the largest MA plans, like UnitedHealth Group and CVS Health, now own specialty pharmacies, surgery centers, and physician clinics.
But one of the most controversial, fundamental elements of Medicare Advantage continues to be risk adjustment — the mechanism in which plans are paid more if they enroll sicker people. One of the primary ways the government can police plans’ behavior is through audits called risk adjustment data validation, or RADV.
RADV audits, which are universally feared by MA plans, comb through insurers’ records of how they coded their patients and make sure those diagnoses line up with patients’ medical records. Any discrepancies could force MA plans to pay back potentially tens of millions of dollars, just for one audit. A rule that would significantly boost those audits — and lead to much larger clawbacks — has been stuck in limbo for years due to the industry’s fierce opposition. But CMS has to make a final decision by this November: It will either have to finalize the RADV rule, or kill it and start from scratch.
Health insurers’ primary lobbying group, America’s Health Insurance Plans, reiterated older demands that CMS “withdraw” the entire rule. But if the agency moves forward, AHIP suggested there would be legal problems.
The “rulemaking is unfair, inappropriate, and legally impermissible,” AHIP wrote in its comments, adding the rule also “violates the requirements” of laws that govern administrative procedures.
When asked if those comments meant AHIP was ready to sue if Medicare finalized the auditing rule, an AHIP spokesperson said: “That language really can’t be taken as an indicator of any potential future litigation strategy.”
About the Author: Bob Herman Business of Health Care Reporter Bob Herman is a business of health care reporter at STAT. He covers hospitals, health insurance, and other corners of the industry — with a goal of explaining and shining light on the massive amount of money flowing through the system.