This may be something for us to keep an eye on?
We’ve noticed denials from some MA programs for services covered by FFS Medicare, including some ambulance services coverage authorized under COVID-19 waivers…
Medicare Advantage debate rekindled by report on coverage denials
Thursday's federal watchdog report accusing Medicare Advantage of denying too many services that should have been paid for under Medicare coverage rules is inflaming Washington's debate over whether the program is helping seniors or simply padding insurers' pockets.
Why it matters: Medicare Advantage enrollment has ballooned in recent years, making the question of its value — both in terms of quality and cost — increasingly important.
Driving the news: The report from the HHS Office of the Inspector General says it found "widespread and persistent problems" of inappropriate denials of services and payment requests that met Medicare coverage rules.
- Auditors found 15 Medicare Advantage organizations denied 12,273 previously authorized requests for medical care during the first week of June 2019.
- Putting that into context, the Medicare Advantage plans would have denied 84,812 beneficiary requests for services that met Medicare coverage rules that year.
Between the lines: Medicare Advantage has proved highly lucrative for insurers, turning Medicare into more of a private marketplace as enrollment swells.
- Private insurers like Humana and UnitedHealth Group that administer Medicare Advantage plans can expect a 5% average increase in federal payments next year — half a percentage point above what the Biden administration proposed in February.
- Humana recorded a $930 million first-quarter profit and projected its Medicare Advantage rolls will grow by 150,000 to 200,000 this year, according to Modern Healthcare.
- More than 28 million seniors and people with disabilities were enrolled in a private Medicare Advantage plan at the beginning of this year, an 8.8% increase from the same time in 2021.
Yes, but: Not everyone thinks the program's success is a good thing — particularly for taxpayers.
- Whistleblowers have accused Medicare Advantage plans of inflating how sick their members are in order to bump up federal payments, Bloomberg recently reported.
- A recent report from the Medicare Payment Advisory Commission concluded that plans collected $12 billion more caring for seniors in 2020 than it would have cost in traditional Medicare.
The other side: "The OIG report validates that the vast majority of Medicare Advantage prior authorization requests are approved, and that the vast majority of denials that the OIG reviewed were appropriate," said Kristine Grow, a spokesperson for America's Health Insurance Plans, adding Medicare administrators noted plan performance is improving.
What we're watching: The program generally isn't an attractive political target given its popularity with seniors and, for Republicans, its embrace of private-sector coverage.
- Policymakers often turn a blind eye to exorbitant health care costs in response to health industry lobbying.
- But denial of services could make the program an easier target for critics.
- Democratic Reps. Katie Porter, Rosa DeLauro and Jan Schakowsky and Sen. Elizabeth Warren are pressing the Biden administration to put payments to Medicare Advantage plans on a par with traditional Medicare and increase transparency in the program.
- Reps. Suzan DelBene, Mike Kelly, Ami Bera and Larry Bucshon seized on the inspector general's findings to call for reforms to the program.
The bottom line: Medicare Advantage is unquestionably getting bigger. Thursday's report once again raised the question of whether that's a good thing.