This week was quite the week for the Medicare Advantage (MA) plans. A blog post on Health Affairs criticized traditional Medicare in its entirety, noting that each of the parts of Medicare has its own “idiosyncratic” cost-sharing structures and the potential for unlimited copayment; the same post touted the wonderful extra benefits that Medicare Advantage plans provide such as dental and vision care, hearing aids, and even health club memberships.

Next came a doctor’s blog post highlighted by Vox; the article included the statement “Medicare is actually fairly crappy insurance,” suggesting the private insurers do things better.

Unfortunately, the author provided grossly inaccurate information about traditional Medicare benefits, noting that “seniors can easily find themselves owing $20,000 on a $100,000 outpatient surgery.”  What the author failed to note is that the most expensive outpatient surgery (other than placement of a prosthetic retina, which is exceedingly rare) is placement of a defibrillator, with an approved payment of $30,000. And even with that surgery, the patient liability is limited to $1,288, the Part A deductible for 2016.

Then came a study from Avalere Health claiming that MA plans are underpaid $2.6 billion annually because the hierarchal condition category process, which is used to risk-stratify patients, drastically underestimates the cost of caring for some patients. This in turn led to the suggestion that perhaps the MA plans don’t need to be audited by the Recovery Auditors, as discussed by Emily Evans here, but rather that they need more money from the Centers for Medicare & Medicaid Services (CMS). Of course, the study was financed by America’s Health Insurance Plans, the lobbying group for the Medicare Advantage plans, and it did not address how much the plans may be overpaid for the many patients who have insurance yet never seek costly care. 

Now, I expect that many readers of this right now are screaming at computers that this is not the Medicare Advantage that they know. It certainly is not the experience at one hospital that had a MA plan try to deny payment for a beneficiary who was hit by a car. The patient was intoxicated and the plan’s medical director tried to argue that since the patient was drunk, the patient was at fault, so the insurer did not have to pay. Another MA plan tried to deny an admission for a patient with pneumonia. The patient presented to the ED with an initial complaint of abdominal pain (lower lobe pneumonia can present with abdominal pain due to irritation of the diaphragm). The plan’s medical director tried to argue that the patient got too much IV fluid that went to the lungs and didn’t really had pneumonia – and since the doctor ordered the IV that caused the fluid overload, the insurance would not pay. Another medical director was able to diagnose drug-seeking behavior despite no mention of it in the medical record and use that incorrect diagnosis to deny payment for an admission.

Well, the true nature of the large MA plans came to light publicly on Friday, when Cigna was notified by CMS that all MA patient enrollment and marketing must cease immediately due to deficiencies in its benefit administration, appeal and grievance process, and compliance program, which sounds suspiciously like every single one of the things it is supposed to do. In fact, CMS has a Web page that lists 116 enforcement actions imposed on various Medicare Part C and D plans.

Much of this attention on Medicare has been inspired by U.S. Sen. Bernie Sanders, who has been talking about Medicare for all. Without debating the merits or problems with a single-payer system, I’ll just note that to many, Medicare for all sure sounds better than Medicare Advantage for all.

About the Author

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians.

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