Q. Medicare Fall Open Enrollment starts next month. I heard something not long ago about Medicare Advantage plans denying necessary care. This is very worrisome. What do you know about this, and what is being done? Do you have any tips for this year’s upcoming Medicare Open Enrollment?
A. Of the more than 64 million Americans covered by Medicare, more than 29 million are enrolled in Medicare Advantage plans. Many Americans are attracted to these plans because of lower premiums and the prospect of getting more services than traditional Medicare. What many don’t realize, however, is that you always have to give up something in exchange for these lower premiums and “additional” services, and that almost always means having limited networks of doctors, requiring referrals for certain services such as seeing any kind of specialist, and requiring prior approval for any kind of medical or surgical procedure, with such prior approval often being denied, sometimes for seemingly arbitrary and capricious reasons. As with everything else in life, there is great truth in the old adage “you get what you pay for.”
A common concern about Medicare Advantage plans is that they have an incentive to deny access to certain services and payments to providers in an attempt to increase profits. Insurers are given a set amount of money per patient regardless of the amount of care received.
Government Watchdog Report Found Private Medicare Plans Routinely Rejected Claims and Denied Services
The U.S. Department of Health and Human Services (HHS) released a report earlier this year that discusses the issue of denial of access to services and payments. The report found that Medicare-managed care organizations (i.e., Medicare Advantage plans) inappropriately denied medically necessary care to tens of thousands of people enrolled in private Medicare Advantage plans.
The report from HHS’ inspector general investigators states that:
- Private Medicare plans denied 18 percent of claims allowed under Medicare coverage rules. Medicare Advantage plans denied payment requests, mostly because of human mistakes during manual claims reviews or because of system processing errors.
- The plans turned down some prior authorization requests from medical providers that likely would have been covered by traditional Medicare, according to the inspector general’s office. Among the denied requests, some 13 percent met Medicare coverage rules.
- The office identified two common reasons behind the denials.
- First, “insurers used clinical criteria not contained in Medicare coverage rules – such as requiring an X-ray before allowing more advanced imaging, like an MRI.”
- Second, “the insurers ruled in some cases that documentation was not sufficient for approval, even though the inspector general’s physician reviewers found that existing medical records were enough to support the necessity of the services.”
- Medicare Advantage plans denied prior authorization requests and payment requests that met Medicare coverage and billing rules by 1) using internal criteria that are not contained in the Medicare coverage rules; 2) requesting unnecessary documentation although appropriate documentation was found in patient records submitted by physicians; and 3) making manual review errors and system errors.
- Coverage and payment denial prevent patients from receiving necessary care and can unnecessarily burden physicians.
- Medicare Advantage plans reversed some of the denied prior authorization and payment requests that met Medicare coverage and billing rules. The reversals often occurred when a beneficiary or provider appealed or disputed the denial, and in some cases the Medicare Advantage organizations identified their own errors.
Physicians Are Concerned About Effects of Denials on Patients
Surveys of physicians found that excessive authorization controls required by health insurers are often responsible for serious harm when necessary medical care is delayed, denied, or disrupted in an attempt to increase profits. In a 2021 American Medical Association (AMA) survey:
- Thirty-four percent of physicians reported that prior authorization led to a serious adverse event for a patient in their care, such as hospitalization, medical intervention to prevent permanent impairment, or even disability or death.
- Physicians and their staff spend nearly two days per week on prior authorizations creating costly administrative burdens.
“It has become common practice for health insurance companies to create obstacles for patients, in hopes of not having to pay for essential health care,” says Robert E. Wailes, M.D. “The reason for these types of obstacles is simple: Fewer procedures performed translates to larger insurance company profits. The time delays and administrative burdens also continue to undermine health care outcomes. Lawmakers must act now to place patient needs before corporate profits and simplifying by streamlining prior authorization processes.”
Recommendations for Improvement
In response to the study, investigators from HHS OIG urged Medicare officials “to strengthen oversight of these private insurance plans” and called for “increased enforcement against plans with a pattern of inappropriate denials.”
The inspector general’s office recommends that the Centers for Medicare and Medicaid Services (CMS), which oversees Medicare Advantage, issue new guidance on the appropriate use of insurers’ clinical criteria in medical necessity reviews and update its audit protocols to address the issues identified in the report. It also suggests CMS direct Medicare Advantage plans to take additional steps to reduce manual review and system errors.
CMS said it agrees with all these recommendations and is determining the next steps to take. According to a representative from CMS, “Medicare Advantage plans may institute additional requirements to better define the need for a medical service, but they cannot be more restrictive than traditional Medicare’s national and local coverage policies,” the agency said. “It conducts audits of plans’ compliance and targets areas of concern, such as services with high rates of denial. Plans found to have repeated violations are subject to penalties, sanctions, and contract termination.”
At the federal level, HR 3173/ S 3018 legislation titled the “Improving Seniors’ Timely Access to Care Act” was authored by Congressman Ami Bera, M.D. It seeks to “streamline Medicare Advantage prior authorization for routinely-approved services, ensure plans adhere to evidence-based guidelines developed by physicians, mandate public reporting of prior authorization decisions and timeframes, and implement an electronic process to reduce physician administrative burdens.” The proposed federal legislation has gained bipartisan support from more than 300 members in both chambers of Congress.
One successful approach taken in several states is an audit-based system where prospective prior authorization is waived for clinicians deemed high performing. Texas, for example, recently passed legislation that prevents insurers from imposing prior authorization requirements on providers who have historically high approval rates.
Review Your Medicare Health Plan Every Year
As you mentioned, Medicare Open Enrollment begins in a little over a month, from October 15-December 7, 2022. Based on the report discussed in this article, you can see that Medicare Advantage plans have at times delayed or denied beneficiaries’ access to medical care – even though the requests met Medicare coverage rules. Have you experienced such denials? Are you unhappy with your Medicare or Medicare Advantage plan? The Medicare Open Enrollment Period offers a chance to make changes.
Farr Law Firm is excited to continue our affiliation with Retirement & Medicare Together to serve the Medicare needs of our clients. We are working with Retirement & Medicare Together because of their knowledge, experience, and dedication to client service. Now is a perfect time to review your plan and start thinking about making any necessary changes. Click here to schedule your no-cost Medicare review today!
For lots more details about Medicare Open Enrollment, please see my articles on the subject. Also, be sure to read today’s Critter Corner to learn why you should review your plan every year, even if you think you’re satisfied with your plan.
Plan for Medicare Open Enrollment, as well as Your Future and Your Loved Ones
Just as you are planning for the Open Enrollment Period, you should plan for your future and for your loved ones. If you have a loved one who is nearing the need for nursing home care, or if you haven’t done your estate planning or incapacity planning, please call us to make an appointment for a consultation:
Fairfax Medicare Planning: 703-691-1888
Fredericksburg Medicare Planning: 540-479-1435
Rockville Medicare Planning: 301-519-8041
DC Medicare Planning: 202-587-2797
About Evan H Farr, CELA, CAP
