By Julie Appleby/KFF Health News
A hospital system in Georgia. Two medical groups in San Diego. Another in Louisville, Kentucky, and nearly one-third of Nebraska hospitals. Across the country, health care providers are refusing to accept some Medicare Advantage plans — even as the coverage offered by commercial insurers increasingly displaces the traditional government program for seniors and people with disabilities.
As of this year, commercial insurers have enticed just over half of all Medicare beneficiaries — or nearly 31 million people — to sign up for their plans instead of traditional Medicare. The plans typically include drug coverage as well as extras like vision and dental benefits, many at low or even zero additional monthly premiums compared with traditional Medicare.
But even as enrollment soars, so too has friction between insurers and the doctors and hospitals they pay to care for beneficiaries. Increasingly, according to experts who watch insurance markets, hospital and medical groups are bristling at payment rates Medicare Advantage plans impose and at what they say are onerous requirements for preapproval to deliver care and too many after-the-fact denials of claims.
Stuck in the Middle
The insurers say they’re just trying to control costs and avoid inappropriate care. The disputes are drawing more attention now, during the annual open enrollment period for Medicare, which runs until Dec. 7.
Stuck in the middle are patients. People whose preferred doctors or hospitals refuse their coverage may have to switch Medicare Advantage plans or revert to the traditional program, although it can be difficult or even impossible when switching back to obtain what is called a “Medigap” policy, which covers some of the traditional plan’s cost-sharing requirements.
Low Value Care
The insurance industry’s lobbying arm, AHIP, said in a February letter to the Centers for Medicare & Medicaid Services that prior approvals and other similar reviews protect patients by reducing “inappropriate care by catching unsafe or low-value care, or care not consistent with the latest clinical evidence.”
AHIP spokesperson David Allen said in an email that Medicare Advantage plans are growing in enrollment because people like them, citing surveys conducted by an AHIP-backed coalition.
The vast majority, he wrote, said they were satisfied with their plans and the access to care they provide.
Canceled Contracts
The disputes so far don’t appear to center on any particular insurer, region, or medical provider, although both UnitedHealthcare and Humana Inc. — the two largest Medicare Advantage insurers — are among those that have had contracts canceled.
Baptist Health in Louisville, Kentucky, said in a statement that all nine of its hospitals, along with its clinics and physician groups, would cut ties with Advantage plans offered by UnitedHealthcare and Wellcare Health Plans Inc. beginning in January unless they reach an agreement.
“Many Medicare Advantage plans routinely deny or delay approval or payment for medical care recommended by a patient’s physician,” Baptist Health said in its statement.
The system’s medical group, with nearly 1,500 physicians and other providers, left Humana’s network in September.
In a similar move, Brunswick, Georgia-based Southeast Georgia Health System, which includes two hospitals, two nursing homes, and a physician network, warned this fall that it would end its contract with Centene Corp.’s Wellcare Medicare Advantage plans in December, citing what it said was years of “inappropriate payment of claims and unreasonable denials.”
Beginning of Trend?
In some cases, health systems’ threats to abandon Advantage plans — as well as insurers’ threats not to include providers in their networks — are negotiating tactics, intended as leverage to win concessions on payment rates or other issues. And some have been resolved. Ohio’s Adena Regional Medical Center, for example, said in September it would drop Medicare Advantage plans offered by Elevance Health, formerly known as Anthem Inc., but reinstated them following additional negotiations.
Still, some hospital and policy experts say the conflicts may be the beginning of a trend.
“This seems different,” said David Lipschutz, associate director and senior policy attorney at the Center for Medicare Advocacy, who said hospitals and doctors are becoming “much more vocal” about their frustration with some cost-control efforts by Medicare Advantage insurers.
Taxpayer Costs
“There have been serious problems with payment suspensions and reviews that annoy the providers. I would not be surprised if we start to see more of this pushback” as the Medicare market becomes more concentrated among a handful of insurers, said Don Berwick, president emeritus and senior fellow at the Institute for Healthcare Improvement and a former CMS administrator.
While availability varies from county to county, Medicare beneficiaries can choose on average among 43 plans, according to KFF. UnitedHealthcare and Humana account for about half of the nationwide enrollment in Advantage plans.
Studies show that Medicare Advantage costs taxpayers more per beneficiary than the traditional program. But the plans enjoy the backing of many lawmakers, especially Republicans, because of their popularity.
Claims Denials
The Health and Human Services Department’s inspector general reported last year that some Advantage plans have denied coverage for care that should have been provided under Medicare’s rules.
The report examined prior authorization requests — a requirement to seek insurers’ OK before certain treatments, procedures, or hospital stays — and claims denials, where insurers refuse to pay for all or part of care that’s already been performed.
Lawmakers have recently demanded additional information from Advantage insurers about the factors they use to make such determinations.
Denial Letters
CMS proposed a rule this month to cap commissions for brokers who sell Medicare Advantage plans and require more detail on how the plans’ prior approval programs affect certain low-income enrollees and people with disabilities.
Lipschutz said the HHS inspector general’s study may have encouraged hospitals and doctors to be more outspoken.
The inspector general’s office found that 13% of the denied requests for treatment it reviewed and 18% of denied claims were for care that should have been covered. Responding in part to that report, the Biden administration issued a rule set to take effect in January that requires Medicare Advantage plans to provide “the same medically necessary care” as the traditional program. Every Advantage insurer must also annually review its own policies to make sure they match those in the traditional program.
The American Hospital Association, while lauding the administration’s action, questioned whether it would be enough. In a letter sent last month to CMS, the hospital lobbying group said its members “have heard from some [insurers] that they either do not plan to make any changes to their protocols” or “have made changes to their denial letter terminology or procedures in a way that appears to circumvent the intent of the new rules.” The letter urged “rigorous oversight” by CMS.
Allen, the AHIP spokesperson, did not respond to a request to comment on the AHA letter.
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