Every year, tens of thousands of people enrolled in private Medicare Advantage health insurance plans are denied necessary care that should be covered under the program, according to a report by the Department of Health and Human Services’ inspector general.
The report calls for Medicare officials to strengthen oversight of these private insurance plans, which provide benefits to 28 million older Americans.
Medicare Advantage plans have become an increasingly popular option among older Americans, offering privatized versions of Medicare that frequently are less expensive and provide a wider range of benefits than traditional government-run Medicare.Enrollment in Medicare Advantage plans has more than doubled over the last decade, and half of Medicare beneficiaries are expected to choose a private insurer over the traditional government program in the next few years, says The New York Times.
The industry’s main trade group says people choose Medicare Advantage because “it delivers better services, better access to care and better value.”
Medicare Advantage insurers receive a flat monthly fee for every Medicare beneficiary they cover. Investigators say one of the concerns about this payment method “is the potential incentive for insurers to deny access to services and payment in an attempt to increase profits.” Under original Medicare, the federal government pays providers directly for each service or treatment Medicare covers.
The inspector general’s investigators reviewed pre-authorization denials from 15 Medicare Advantage organizations from the first week of June 2019. The investigators found that 13 percent of the services denied likely would have been paid for under original Medicare. They estimated that, based on their sample, nearly 85,000 pre-authorization requests would have been denied that year.
The report cites several examples of care being denied. In one case, a Medicare Advantage plan wouldn’t pay for an MRI to determine if an adrenal lesion was malignant. The plan said the lesion was too small and the patient would have to wait a year to get the test. The inspector general's physician panel that reviewed these cases said the MRI was necessary and the patient shouldn't have to wait. The insurer reversed its decision when it was appealed.
In many instances, the inspector general's report says, the Medicare Advantage plans substituted their clinical criteria for Medicare coverage rules. The report recommends that the Center for Medicare Services issue new, more specific guidance on when and how plans can use their own criteria to decide whether to pay for care. The inspector general also wants CMS to penalize plans that “are using more restrictive clinical criteria or requesting unnecessary documentation.”
The American Hospital Association says the findings “confirm — and provide data and real-life examples — of the harm that certain commercial insurer policies have on patients and the providers that care for them. The AHA continues to push back forcefully against MA plan policies that restrict or delay patient access to care, and add cost and burden to the health care system, while also contributing to health care worker burnout. We’ll continue to make the case that these commercial health plan abuses must be addressed to protect patients’ health and ensure that medical professionals — not the insurance industry — are making the key clinical decisions in patient care.”