The Medicare and Medicaid programs offer managed care through the Medicare Advantage (MA) program (Part C) and individual state Medicaid managed care programs, respectively. Managed care plans enter into contracts with a network of health care providers and medical facilities. Any savings associated with a managed care plan often correlates to the level of restrictions the plan applies to an enrollee’s costs and health benefits, such as narrow networks that may exclude a patient’s caregiver or preferred hospital.
Savings also accrue to many MA (and Medicaid managed care) plans by implementing payment policies inconsistent with Medicare FFS payment policies, for example: inappropriate prior authorization, which also leads to denials of post-acute care; inappropriate medical necessity claims denials (with no use of the Medicare FFS two-midnight rule), downcoding and retroactive reclassifications; post payment review; inappropriate use of observation care; limited and often non-transparent networks; cumbersome, outdated and non-standardized appeals processes; burdensome documentation requests; and inconsistent black box audit standards. Further, MA plans are paid by Medicare for bad debt, but this rarely is passed through to health care providers.
And yet, MedPAC’s “long-standing assessment [is] that, when properly compared, Medicare spends more overall for enrollees in Medicare Advantage than the program would have spent for similar beneficiaries enrolled in traditional FFS Medicare.”
In September 2018, the Department of Health & Human Services Office of Inspector General (OIG) conducted a study called Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials. The OIG found: (i) significantly high rates of overturned prior authorization and payment denials; and (ii) that the Centers for Medicare & Medicaid Services (CMS) audits highlight widespread and persistent MA plan performance problems related to denials of care and payment. The OIG noted that these findings are especially concerning because beneficiaries and providers rarely use the appeals process. The OIG recommended that CMS: (i) enhance its oversight of MA plans and take appropriate corrective action; (ii) address persistent problems related to inappropriate denials and insufficient denial letters; and (iii) provide beneficiaries with clear, easily accessible information about serious violations by MA plans. CMS concurred with all three recommendations.
FAH advocates for federal policies that level the playing field between MA and Medicare FFS beneficiaries. During the 116th Congress, the FAH joined a large coalition in support of H.R. 3107, the Improving Seniors’ Timely Access to Care Act of 2019. It would establish prohibitions, requirements and streamlined standards relating to prior authorization processes under MA plans. Action taken at the state level through departments of insurance and departments of managed care varies depending on state law and regulations. FAH continues to monitor key state actions taken in response to plans for the purpose of assessing opportunities to address these issues at the federal level.