Medicare Advantage plans continue to gain in popularity as a growing number of seniors choose them over basic Medicare (or Medicare with supplemental coverage). They’re often touted as the best value in senior health care, with a wide range of services all covered under a single premium. But does the reality match the hype? For thousands of seniors, the answer may be “no.”  Last spring, we discovered this article on the HealthDay website that painted a decidedly mixed portrait of Medicare Advantage plans.

The HealthDay article reveals how, in tens of thousands of cases, unseen underwriters at Medicare Advantage insurers denied coverage for medical procedures that were both eligible for coverage and considered medically necessary. The article is based on this expose published in the New York Times.  (Please note that a subscription may be required to access the Times article.)  Since Medicare Advantage plans have enjoyed such marketing success, we wanted to bring this issue to your attention to alert you to a potentially disturbing trend.

Denial of Coverage Calls for New Oversight

The article begins in a suitably disturbing way: “Coverage for eligible, necessary care is denied each year to tens of thousands of seniors with private Medicare Advantage plans, U.S. federal investigators say.” This alarming fact was revealed in a recent 61-page report, in which a team from the U.S. Department of Health and Human Services urged Medicare to improve oversight of Advantage plans and “strengthen enforcement against those private insurance companies with a pattern of improper denials of coverage.”

According to the article, older people with Medicare Advantage plans number around 28 million, most of whom chose Medicare Advantage over traditional Medicare because of the plans’ touted lower costs and greater ranges of benefits. But the recent report has called some of these claims of better benefits into question, and caused us to consider just how solid Medicare Advantage’s “advantage” actually is.

Unjustified Denials are “Widespread, Persistent”

According to the HealthDay article, “[T]he investigators said they found ‘widespread and persistent problems related to inappropriate denials of services and payment.’”

The report goes on to explain, “Their review of 430 denials by Medicare Advantage plans in June 2019 revealed that 13 percent of cases where care was denied for medical services were actually medically necessary and should have been covered. Based on that rate, the investigators estimated as many as 85,000 requests for prior authorization of medical care were potentially improperly denied in 2019.”

The upshot of all this? In 2019, the Advantage plans refused payment to 18 percent of legitimate claims—around 1.5 million payments. “In some cases, plans ignored prior authorizations or other documentation to support the payment,” the article said.

Most Frequently Denied Services: CT Scans, MRIs

Out of all the denials reported, the most frequent ones were for MRIs and CT scans. These delays can have frightening consequences. “In one case, an Advantage plan refused to approve a follow-up MRI to determine whether a lesion was malignant after it was identified through an earlier CT scan because the lesion was too small. The plan reversed its decision after an appeal, the New York Times reported.”

The report also notes a case in which a patient had to wait for authorization for a CT scan. She ended up waiting for five weeks for this scan, which was meant to assess her endometrial cancer treatments. Medical experts agree that such delays can mean the difference between life and death, and can certainly cause unnecessary pain and distress for many, many patients.

Some Patients Denied Rehab Care

The pattern of claim denial doesn’t stop there, according to HealthDay. “Advantage plans also denied requests to send patients recovering from a hospital stay to a skilled nursing facility or rehabilitation center when doctors determined those places were more appropriate than sending a patient home, the Times said.”

In one example, a patient dealing with skin infections and bedsores was denied a nursing center transfer, while in another example a high-risk patient recovering from fractured-femur surgery was denied rehab. The HealthDay article states, “Clearly, these denials may delay or prevent a Medicare Advantage beneficiary from receiving needed care, according to report team leader Rosemary Bartholomew. Few patients or providers try to appeal these decisions, she noted.”

The article adds, quoting Bartholomew directly, “We’re also concerned that beneficiaries may not be aware of the greater barriers” to getting necessary care.

Three-Fourths of Denials Reversed on Appeal

It’s not exactly a silver lining, but it is something: appeals do tend to trigger reversal of initial denials, at least three-quarters of the time. This raises the question as to whether denial is little more than a delaying tactic, designed to stall until a patient gives up. As HealthDay writes, “Hospitals and doctors have long sounded off about insurance company tactics, and legislation to tackle some of those concerns is being considered by Congress, according to the Times.”

Medicare officials aren’t pleased by the findings either, but they’re putting on a brave face, as you might expect: “The report’s findings are being reviewed to determine appropriate action, and plans with repeated violations will face increasing penalties, Medicare officials said in a statement. […] They said the agency ‘is committed to ensuring that people with Medicare Advantage have timely access to medically necessary care.’”

Their response sounds a bit bureaucratic at this point, but we’ll watch this story for further developments and see if anything changes. As this is a developing situation, we’ll be sure to bring you any and all updates as they arise.

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(originally reported at https://consumer.healthday.com)