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.
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.
For example, more than 30,000 San Diego-area residents are looking for new doctors after two large medical groups affiliated with Scripps Health said they would no longer contract with Medicare Advantage insurers.
“The insurance companies running the Medicare Advantage plans are pushing physicians and hospitals to the edge,” said Chip Kahn, president and CEO of the Federation of American Hospitals, which represents the for-profit hospital sector.
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.
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.
