Seniors Are Getting Suckered Into Medicare Advantage Plans

Too many who face health problems will have a tough time getting benefits

Elderly Americans who qualify for Medicare for some years have been hoodwinked into signing up for Medicare Advantage Plans run by insurance companies rather than stick with traditional Medicare.  There are endless commercials on TV that sucker seniors with alluring enticements of many additional benefits not offered in traditional Medicare.  But what do seniors who fall for the advertisements give up?  Medical freedom.  The freedom to choose their medical providers because they must use what the MAP offers.  Insurance companies make medical decisions.

Now comes a strong  new report from the HHS Office of the Inspector General (OIG).  It documents just how awful the MAP option can be if and when significant medical coverage is needed.  This is what the public needs to understand.  MAPs are based on a capitated payment model where companies are paid a fixed amount per beneficiary.  Thus, there's a real incentive for insurers to deny access to services and payment in an attempt to increase profits, the report noted.

But first it should be appreciated how successful the marketing of MAPs has been in recent years.  Concern about seniors being denied medical benefits is growing as MAPs are increasingly responsible for more Medicare beneficiaries. In 2021, 42% of all Medicare beneficiaries were enrolled in a Medicare Advantage plan, and that is projected to rise to about 51% by 2030, according to the report.  In fact, enrollment in 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.  Buyer beware.

Because of the many negative pandemic impacts, as more and more seniors deal with poor economic conditions, especially mounting inflation and high living costs, they are likely to become even more enticed into signing up with MAPs.

Here is the bad news.  Every year, tens of thousands of people enrolled in private MAPs are denied necessary care that should be covered under the program, federal investigators concluded in the new report.  The investigators urged Medicare officials to strengthen oversight of these private insurance plans, which provide benefits to 28 million older Americans, and called for increased enforcement against plans with a pattern of inappropriate denials.

Here are examples of what the new report found that highlight the serious flaws with MAPs.  They often denied medically necessary care to beneficiaries and payments to doctors that met Medicare coverage rules.  OIG found that 13% of prior authorization requests that were denied met Medicare coverage rules, as did 18% of physician payment requests that were turned down.

The type of care denied typically involved advanced imaging services, such as MRIs, and stays in post-acute care facilities, the report stated.  The report added that plans denied these services and requests by using clinical criteria that are not contained in Medicare coverage rules, by requesting unnecessary documentation, and via genuine error.

"Although [Medicare Advantage Organizations (MAOs)] approve the vast majority of requests for services and payment, they issue millions of denials each year and CMS's annual audits of [MAPs] have highlighted widespread and persistent problems related to inappropriate denials of services and payments," the report stated.

In response to the report, American Medical Association President Gerald E. Harmon, MD, said the findings "mirror physician experiences."  "Surveys of physicians have consistently found that excessive authorization controls required by health insurers are persistently responsible for serious harm when necessary medical care is delayed, denied, or disrupted," he said.

Based on its finding that about 13 percent of the requests denied should have been covered under Medicare, the investigators estimated as many as 85,000 beneficiary requests for prior authorization of medical care were potentially improperly denied in 2019.

Advantage plans also refused to pay legitimate claims, according to the report. About 18 percent of payments were denied despite meeting Medicare coverage rules, an estimated 1.5 million payments for all of 2019. In some cases, plans ignored prior authorizations or other documentation necessary to support the payment.

These denials may delay or even prevent a Medicare Advantage beneficiary from getting needed care, said Rosemary Bartholomew, who led the team that worked on the report. Only a tiny fraction of patients or providers try to appeal these decisions, she said.  “We’re also concerned that beneficiaries may not be aware of the greater barriers,” she said.

Consider this case.  Kurt Pauker, an 87-year-old Holocaust survivor in Indianapolis who has kidney and heart conditions that complicate his care, is enrolled in a Medicare Advantage plan sold by Humana.  In spite of recommendations from Mr. Pauker’s doctors, his family said, Humana has repeatedly denied authorization for inpatient rehabilitation after hospitalization, saying at times he was too healthy and at times too ill to benefit.

Last March, after undergoing hip surgery, Mr. Pauker was again told that he did not qualify for inpatient rehab but would be sent back to a skilled nursing center to recover, his family said.

During his previous stay at a skilled nursing center, he received little in the way of physical or occupational therapy, the family said. He has so far lost his appeals, and relatives have chosen to pay for care privately while continuing to pursue his case.

In watching the many commercials for MAPs seniors should keep in mind that if it sounds too good to be true, then it likely merits very serious examination.  What seems at first as a great low-cost option can, in the long run, cost you needed medical treatment.

Dr. Joel S. Hirschhorn, author of Pandemic Blunder and many articles and podcasts on the pandemic, worked on health issues for decades, and his Pandemic Blunder Newsletter is on Substack. As a full professor at the University of Wisconsin, Madison, he directed a medical research program between the colleges of engineering and medicine.  As a senior official at the Congressional Office of Technology Assessment and the National Governors Association, he directed major studies on health-related subjects; he testified at over 50 US Senate and House hearings and authored hundreds of articles and op-ed articles in major newspapers.  He has served as an executive volunteer at a major hospital for more than 10 years.  He is a member of the Association of American Physicians and Surgeons, and America’s Frontline Doctors.