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.”
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.
“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.
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.
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.
jappleby@kff.org, @Julie_appleby
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