A Senate subcommittee Wednesday sent letters to the nation’s largest Medicare Advantage insurers, demanding they reveal internal documents that illustrate how they make coverage determinations.
Word of that request came during a hearing examining healthcare denials and delays in the Medicare Advantage program held by the Senate Committee on Homeland Security and Governmental Affairs’ Permanent Subcommittee on Investigations.
The harmful effects of such processes on residents seeking skilled nursing care was specifically highlighted by subcommittee members and witnesses.
“There is growing evidence that insurance companies are relying on algorithms rather than doctors or other clinicians to make decisions to deny patient care,” said Chairman Richard Blumenthal (D-CT), during the subcommittee’s first session of the new Congress. “Our subcommittee has been hearing from patients and providers alike who have stories of care being delayed or denied. And many of these stories involve patients who have been hospitalized for serious medical issues and need nursing home or rehabilitative care before they are ready to return home.”
“The insurers may refer to these algorithms as tools used for guidance, but the denials they generate are too systematic to ignore. All too often, black box AI [and algorithms] have become a blanket mechanism for denial.”
Blumenthal noted that insurers call those algorithms proprietary, but the subcommittee would like to see them become more transparent.
During opening remarks, Blumenthal also pointed out a strong motive for MA plans to keep requiring prior authorizations or terminating coverage of certain care before physicians say patients are ready: Their profit margins. Blumenthal shared a graphic showing that MA plans have an average margin of $1,730 per enrollee, compared to $745 for those insured on the individual market or $689 for those insured through the group plan market.
“Insurers are, in effect, denying Ameircans necessary care in order to fatten and pad their bottom lines, and that phenomenon is unacceptable,” he said. “I want to put these companies on notice. If you deny life-saving coverage to seniors, we are watching, we will expose you, we will demand better, we will pass legislation if necessary.”
He added that letters seeking more information on company practices were sent to CVS-Aetna, United Heath and Humana, which in combination cover more than 50% of Medicare Advantage beneficiaries.
A potential incentive
“Medicare Advantage plans’ internal criteria are supposed to be no more restrictive than original Medicare. However, the capitated payment system in Medicare Advantage creates a potential incentive for insurers to deny access to services for enrollees,” testified Megan Tinker, chief of staff for the Department of Health and Human Services’ Office of Inspector General.
In addition to noting new CMS rules regarding plans’ use of authorizations and clinical criteria, Tinker noted that OIG Inspector General Christi A. Grimm met with several plan executives last month and told them to “step up their efforts” around practices that impede access to care.
A major OIG report issued in April 2022 found that Medicare Advantage plans routinely denied skilled nursing stays, a finding underscored by KFF analyst Jeannie Fuglestein Biniek, PhD. That has meant fewer stays and reduced length of stay for skilled nursing providers, who argue they are more equipped than ever to handle complex patients.
“Virtually all Medicare enrollees are in a plan that requires prior authorization for at least some services, usually high-cost services like chemotherapy or skilled nursing facility stays — services that people use at some of the most medically fragile points of their lives,” said Fuglestein Biniek, associate director of KFF’s program on Medicare policy.
While she endorsed CMS efforts to rein in the use of such tools in limiting care delivery, she also noted that it will be hard to assess how well such measures work because there is a dearth of data on Medicare Advantage denials.
In recent weeks, as Medicare Advantage enrollment officially surpassed more than 50% of all Medicare beneficiaries, calls to improve the plans’ transparency have increased.
Denials lead to red tape ‘maze’
Christine Jensen Huberty, a supervising attorney with the Greater Wisconsin Agency on Aging Resources, testified about her agency’s efforts to help residents work through denials of skilled nursing care.
“If a senior has traditional or original Medicare, they can expect to receive up to 100 days of coverage for their stay with no hassle,” she said. “If a senior has a Medicare Advantage plan, however, they can expect to receive a denial well before their doctor’s even say they’re ready to go home.”
Those denials start a “maze of red tape that is dizzying even to our experienced legal team,” Huberty added, noting that most are now issued by a third-party contractor using an algorithm to deny or shorten a stay.
“Patients caught in this maze are forced to make a devastating decision: Stay in the rehab facility and pay thousands of dollars out of pocket or go home against medical advice,” she added, noting that denials that are ultimately overturned may take a year to be reimbursed. “They’re not getting the coverage that they paid for, and they’re met with hurdles at every turn. … Our most vulnerable citizens are up against an impossible system.”
Researcher Lisa Grabert of the Marquette University College of Nursing outlined how the federal government has relied on insurers to trim costs to the overall healthcare system by taking on risk. That will make it more challenging now to control practices that assist them in managing that risk. If the tools are altered, the risk could revert back to the government in the form of higher costs. One intervention that aims to manage risk management tools could cost more than $16 billion in approved care that is currently being avoided, Grabert noted.
The subcommittee members, however, seemed drawn to stories of individual stress and concerns about coverage.
They heard on Wednesday from Connecticut widow Gloria Bent, who outlined her challenges in getting her husband intensive therapy after having a brain lesion removed and suffering physical and cognitive losses.
Gary Bent was denied intense acute therapy and instead approved for short-stay SNF care. But he began receiving notices for pending non-payment before his care plan was even completed there. Over seven weeks, Bent’s family won two appeals and lost a third. He was discharged from a nursing home and rehospitalized the next day.
“The reappearance of melanoma in 2022 pulled a rug out from under my husband and my family,” Gloria Bent testified. “Then came the added trauma, which piled on steadily, of having to fight to keep him receiving the care he needed. This should not be happening to families and patients. It’s cruel.”
