Open enrollment is well underway for Medicare, as television viewers inundated with cheesy insurance company ads can tell. Those ads must work. For the first time 2024 will see most Medicare beneficiaries enrolled in private insurance – so-called “Medicare Advantage” (MA) – as opposed to fee-for-service (FFS) traditional Medicare.
In signing Medicare into law in 1965, President Lyndon Johnson stated: “There are those, alone in suffering, who will now hear the sound of some approaching footsteps coming to help.” Yet today it’s entirely possible those approaching footsteps belong to an insurance company coming to take Medicare advantage of a suffering person.
A June 2022 report from a federal inspector general analyzed 12,273 prior authorization denials by MA insurers – a small sampling compared to denials overall – and found an estimated 13% met Medicare coverage rules that “likely would have been approved for these beneficiaries under original Medicare[.]”
The nickel-and-diming found can operate at the smallest level of cruelty, even denying “a request for a walker (estimated cost $112) for a 76-year-old beneficiary with post-polio syndrome.” To put that $112 walker into perspective, the biggest MA insurer has a market capitalization of almost $500 billion.
Unlike FFS, prior authorization is required for almost everything by MA plans, including the nursing home care that would otherwise be a post-hospitalization entitlement. Algorithms, not your doctor, makes care decisions for you. Indeed, AARP’s pet insurer, UnitedHealth Group, has used its algorithm to cruelly deny rehabilitation care according to a recent STAT investigation, even as reporting reveals AARP gleefully encourages suing nursing homes.
The Centers for Medicare & Medicaid Services has been notoriously laissez-faire when it comes to Medicare Advantage, likely due to the revolving door between CMS and the insurance industry. This symbiotic relationship was most egregiously manifested when Marilyn Tavenner went straight from running CMS, where she had implemented the Affordable Care Act in ways favorable to the insurance industry, to running America’s Health Insurance Plans.
And MA beneficiaries are unlikely to see President Biden speak out on their behalf with the vigor that he expends in attacking nursing home care. For 2020, records show candidate Biden received nearly three times as many contributions from health maintenance organizations as did President Trump.
Assuming you can access care through a MA plan, chiseling extends to your care providers. In no case will MA pay as much as FFS, even though the Medicare Payment Advisory Commission’s annual report found that in 2020 “nonprofit plans reported a margin of 4.6%; for-profit entities reported a pre-tax margin of 6.9%” – margins that compare quite favorably to that same report’s finding that for nursing homes in 2020 “total margins would have been about – 1.8%” without one-time COVID-19 assistance.
In a survey, half of responding New Hampshire nursing homes reported being reimbursed by MA plans less than 79% of what FFS would pay, and most described MA claim denials as a “very significant” problem. The administrative burden of trying to get lesser reimbursement is oppressive, unlike FFS. Amidst a workforce crisis, 40% of the responding nursing homes report spending 6 or more hours on each MA enrollee jumping through prior authorization hoops and other hurdles. As one member of mine noted, “one of the biggest issues with MA is the lower length of stay. They don’t allow us to actually provide the appropriate care and instead push us to discharge before they are ready.”
It is not just nursing home providers, or those needing nursing home care, feeling the pain. A recent NBC News story was headlined “‘Deny, deny, deny’: By rejecting claims, Medicare Advantage plans threaten rural hospitals and patients, say CEOs.”
And insurers can deny claims with impunity. As a former state insurance regulator, I can attest to how fines imposed on carriers providing everyday health insurance are just part of their cost of doing business. What’s the deterrent value of, say, a half-million-dollar fine when your company is worth a half-trillion-dollars?
During the 2009 debate over health care reform, then-Sen. Jay Rockefeller (D.-W.V.) said of insurance companies: “They’re getting away with banditry. They revel in it.” The only thing that has changed since is that taxpayers are willingly handing over the loot.
Brendan Williams is the president and CEO of the New Hampshire Health Care Association.
The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.
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