From their ads, Medicare Advantage (MA) plans may seem like a low-cost, easy, and efficient way for America's seniors to get healthcare. But Barry, a recently retired software executive, tells a cautionary tale.
When a gastric issue led the 65-year-old (his name has been changed to protect his privacy) to the hospital this summer, a CT and biopsy revealed pancreatic cancer. His oncologist came to his bedside to discuss next steps.
"We'll need to do a PET scan to see if the tumor is localized, and that will determine whether we should do chemo or surgery," he was told. With pancreatic cancer, the oncologist said, "the faster we move, the better."
But the oncologist frowned. Unfortunately, the scan couldn't be scheduled for 3 or 4 weeks.
"You're the Cleveland Clinic," Barry responded.
"We're not the problem," the oncologist replied. "We have to get approval from your insurance. We'll submit it, they'll reject it. There's a lot of back and forth."
Barry was puzzled. He had avoided signing up with an MA plan after his broker warned him that those enrollees often had to wait for prior authorization review, which delayed care for weeks to months.
"Just to be clear," he said, "I'm not in Medicare Advantage. I have regular Medicare with a supplemental."
The oncologist's "whole demeanor changed," he told 鶹ý. The frown became a smile.
"Well then, we can go a lot faster," he was told.
He got his PET study 3 days later. Barry said a 4-week wait would be intolerable. More importantly, he said, "The sooner I could begin, the less chance the tumor would have to grow or spread elsewhere and become much more difficult to treat."
With beneficiaries rapidly joining MA plans by the millions each year, more than half of those eligible will be in MA plans rather than traditional Medicare as soon as next year. By 2032, that number is projected to hit 61%, according to a Kaiser Family Foundation (KFF) based on a Congressional Budget Office .
They are wooed by ads promising low- or no-cost premiums, money added to their Social Security checks, free dentistry, home meals, prescriptions, and rides to the doctor. But those ads and marketing schemes don't tell the whole story.
There is a greater, and less well-publicized, problem with MA plans -- denial of physicians' referrals for care. Even after appeals and approval, there are delays in scheduling. It's a game that gobbles up huge amounts of staff time, clinicians complain. One physician said he expects all MA referral requests to be denied at least once.
"We hear about MA policies that seem to purposefully use all sorts of protocols to deny people care, or at least delay it, and we've seen more and more complaints," said David Weil, program manager for the San Diego-based Health Insurance Counseling and Advocacy Program, a federally funded service that provides free, impartial insurance advice and education for Medicare beneficiaries.
Even when services are finally approved, Weil continued, "some MA beneficiaries go to schedule their test or procedure and find it's nearly impossible."
The advertisements on TV are particularly misleading and worrisome, he said. Featuring stars like , , or , they urge beneficiaries to "call the number on your screen," reassuring that "It's free."
"We're seeing this all the time – people who have been taken in by advertising that changes their Medicare benefits to a Medicare Advantage plan to the detriment of their medical outcomes," Weil said.
"They can't see their doctors that they had been going to, and they have to work up all the tests and everything has to be redone with new providers. We continue to see clients who have been harmed by brokers who switch them to a plan that doesn't work for them. They just sign them up for the highest commission that they'll be paid." (For a sidebar on incentives that lead brokers to steer new beneficiaries toward Medicare Advantage plans, click here.)
A Good Idea Gone Bad
The goal in the MA concept in 1997 appeared to be a noble one. As of 1999, new Medicare+Choice plan patients would get all their care from providers who talked with each other and coordinated services, thereby reducing waste and overuse. While absorbing risk of taking on sicker patients, they'd be incentivized to use resources judiciously, thus reducing harm from unnecessary care, and cost the Medicare program much less.
But that's not how it's worked out.
According to a KFF , in 2019, Medicare spent an average of $321 more for an MA enrollee than if that enrollee was in traditional Medicare.
Subsequent to a flurry of Congressional hearings earlier this year, CMS recognized a problem with MA plans and in April a growing number of complaints, some 15,497 in 2020 and 39,617 in 2021, excluding December.
On August 1, it asked for on some 46 potentially problematic aspects of MA plans. For example, it asked about the plans' "specific prior authorization and utilization management techniques." And on marketing, it asked, "How well do MA plans' marketing efforts inform beneficiaries about the details of a given plan?" with specific examples of effective or ineffective techniques.
In a 42-page , the Center for Medicare Advocacy said while there are barriers in traditional Medicare, those barriers are worse for MA enrollees.
In a nutshell, its attorneys David Lipschutz and Kata Kertesz wrote, MA plans seem to work well for the young and healthy, but not so well for many who are not.
"This is a population that is falling through the cracks when it comes to accessing medically necessary care in MA plans." "Much more drastic changes are needed in order to adequately protect Medicare beneficiaries against an onslaught of overly aggressive and often misleading Medicare Advantage marketing performed by those who have significant financial stakes in steering people towards MA plans, regardless of whether such option is the best course for an individual," they wrote.
Delays and Denial of Care
It is also of concern because of several reports suggesting that some MA plans deny care.
One Government Accountability Office conveyed concern about the inordinate disenrollment of enrollees from MA plans, and into fee-for-service, in their last year of life. The report raised questions about whether they were able to get timely, needed care before they died.
Another from the OIG in April found numerous examples of MA plans denying or delaying approval for enrollees' recommended services, even though they were legitimately covered under Medicare benefits.
"We found that, among the prior authorization requests that MAOs [Medicare Advantage organizations] denied, 13% met Medicare coverage rules; in other words, these services likely would have been approved for these beneficiaries under" fee-for-service or traditional Medicare, the report said.
Mary Beth Donahue, President and CEO of Better Medicare Alliance, which represents more than 180 provider groups, health systems, and health plans, objected to the criticism of MA plans.
"More than 29 million seniors and individuals with disabilities make an active choice to enroll in Medicare Advantage because it provides a 94% consumer rate, supplemental benefits that meaningfully improve beneficiaries' health, , and annual savings of nearly per year – demonstrating an affordability that is particularly important for seniors on fixed incomes in a period of inflation on household costs," she said.
She disputed the KFF report that MA enrollees cost more than those in traditional Medicare, saying that the plans receive "support from a bipartisan supermajority in Congress because it delivers lower per-beneficiary while bringing coverage to a more diverse, lower-income, and more medically complex beneficiary population, all while taking important strides on policymakers' goals. These are the facts on Medicare Advantage conspicuously missing in recent misleading media reports."
Three Years to a Diagnosis
Craig Rose, a 74-year-old San Diego man with a SCAN MA plan, started having recurring bouts of pneumonia just over 3 years ago. None of his doctors could identify the cause, and Rose wondered if the network's pulmonologists were rigorously investigating his symptoms, or taking it slow, since Rose, a former runner, is trim and otherwise healthy.
While traveling in New York last June, Rose noted traces of blood in his sputum. He called his pulmonologist who advised him to stick with the plan, which meant undergoing a lung scan the following month but if he began coughing up blood, he should go to an ER.
Within 36 hours, Rose was coughing up blood. He spent four days at NYU Langone Health with pneumonia. Doctors there told him to get a bronchoscopy as soon as he got home. After another brief delay, that procedure revealed a rare case of nontuberculosis mycobacterial (NTM) infection.
Rose's MA network did not have an NTM specialist but his internet search found one at UC San Diego Health, Wael El Maraachli, MD, just a few miles away. Rose's MA plan denied him coverage since he was not in network, then rejected his appeal.
He scheduled anyway and paid nearly $900 out of pocket including labs, and will continue his care at UCSD. Now, he questions whether his diagnosis might have come months -- if not years -- sooner, and less costly had he been insured through traditional Medicare with a supplement.
Numerous beneficiaries told 鶹ý that they signed up for their MA plans when they were younger and healthier. Their premiums were zero or low. But after they needed care for newly diagnosed chronic conditions, they found themselves paying far more in co-pays and deductibles than a supplemental plan would have cost them. Now with pre-existing conditions they're ineligible to sign up for a supplement. They're stuck.
Saving Money, Losing Access
Paul Speckart, MD, a San Diego endocrinologist, told 鶹ý that prior authorization -- the ritual of applying for approval, being denied, and reapplying -- is a frustrating process he must endure for many of his patients regardless of their coverage. But it's always worse when the patient has an MA plan, he said.
He tells those patients in or considering MA that "they're trading money for access," that is low or no premiums for a limited network, and they may not be able to see the best specialist for their problem. "I have to tell them, 'Your plan does not offer that,'" he said.
And there are longer delays in scheduling when contracted providers are backed up, creating a logjam for those waiting to be seen. A recent patient complained to him that after waiting to see a dermatologist, he felt like "an object who got a cursory exam."
The plans collect a per capita sum from Medicare, but can delay paying money out -- "all to cut down on usage and save money," Speckart said.
In recent months, several Congressional and have focused on the dozens of Office of Inspector General reports that found MA companies submitted fraudulent diagnosis codes that were not supported in patients' medical records. In less than two years, according to a 鶹ý search, the OIG accused some 20 MA companies that received overpayments from Medicare trust funds of at least , five of them last month.
Diagnosis codes exaggerated patients' health status to make them appear sicker and more expensive than they were, and thus, they'd receive hundreds of dollars per enrollee more each month than audits of their health records justified.
On September 20, 2021, the OIG their concern. "We found that 20 of the 162 MA companies drove a disproportionate share of the $9.2 billion in payments from diagnoses that were reported only on chart reviews and HRAs [health risk assessments], and on no other service records."
"One company further stood out in its use of chart reviews and HRAs to drive risk adjusted payments without encounter records of any other services provided to the beneficiaries for those diagnoses," the agency said.
A recent investigation quoted a former government official that MA plans overbilled the government's Medicare funds as high as $25 billion in 2020 alone.
Wendell Potter, former executive with two large health plan companies, Cigna and Humana, said on that MA plans "will be recognized in years to come as the biggest heist, the biggest fraud, and the biggest transfer of wealth from taxpayers, middle-income, low-income Americans" to corporate executives and shareholders.
Washington Editor Joyce Frieden contributed to this report
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