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Patients “managed” out of benefits on Medicare Advantage programs.
Administrative overhead for Medicare fee-for-service operations typically runs at approximately 2-3 percent. Overhead for commercial insurance plans has been reported to be 18-20 percent. So, what services are being denied by Medicare Advantage (MA) plans to account for this cost difference?
Physician advisers, nurse care managers, and social workers request authorization for their inpatients every day, only to be put through a paperwork maze of speed bumps in an attempt to filter out the services for which the plan wishes to pay. As more healthcare organizations move toward a DRG payment per stay, rather than a per-diem reimbursement, MA plans no longer are incentivized to move patients out of the hospital quickly. In fact, they favor tardiness as the hospital continues to care for their member without additional reimbursement.
One glaring example of this is authorizations for long-term acute-care (LTAC) facility services. LTACs were created to accept patients with prolonged hospital stays demanded by difficult medical problems. Most LTACs are 10-20-bed units that are essentially hospitals within a hospital, managed by critical care physicians. They specialize in prolonged weaning of oxygen for ventilated or high-dose oxygen patients who cannot be managed in acute or subacute rehabilitation settings. LTACs also manage prolonged wound care patients with hyperalimentation, wound vacuums, and immobility. LTACs have proven themselves to have better patient outcomes then acute-care hospitals in the same areas. However, many MA plans routinely deny authorization for LTAC transfer, saying the same service can be delivered in the acute-care hospital. MA plans have already committed to the DRG payment for that stay, so why should they add cost?
It is clear to me that some Medicare Advantage plans simply care about the bottom line rather than providing the best care for their members. When patients forego Medicare fee-for-service care for a Medicare Advantage plan, they are told they will have the same benefits for a lower cost. Is that really true?
Medicare Advantage plans pay for their overhead and generate profit for their shareholders by limiting or denying other services, including acute rehabilitation, subacute rehabilitation, and ambulance transport, just to name a few. Managing cost aims to improve efficiency and quality of care, but payors have crossed the line into withholding care and costs, when possible. But that is a topic for another day!
There is little that can be done to solve the problem. Since payor-hospital contracts rule the day, few contracts include the LTAC authorization process. Grievances can be filed to the Centers for Medicare & Medicaid Services (CMS), utilizing Dr. Phil Baker’s process outlined on the RAC relief listserve. Patients’ families can call and complain to their health plans. I doubt, however, when seniors are recruited by MA plan breakfasts and commercials, they are aware that some benefits just will not be approved. Perhaps they will just be satisfied with the free breakfast and the free pair of eyeglasses these plans pay for.