logo Print this page

Medicare Advantage Plans Often Decline Authorizations for Long-term Acute Care (LTAC) Transfers

Original story posted on: February 13, 2019

  • Product Headline: RACmonitor Compliance Webcasts Subscription
  • Product Image: Product Image

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.



Dr. Howard Stein is the associate director of medical affairs and a physician advisor at Centrastate Medical Center in Freehold, N.J. He has been a full-time physician advisor for 13 years and a part-time physician advisor since 1993. He is a board-certified family physician who served as an assistant clinical professor of family medicine at Robert Wood Johnson Medical School in New Brunswick, N.J. and at the University of Medicine and Dentistry of New Jersey (UMDNJ) in Newark, N.J. He is board-certified by the American Board of Quality Assurance & Utilization Review Physicians. Dr. Stein is also an executive board member of the American College of Physician Advisors.

This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest from Howard Stein, DO, MHA, CHCQM-PHYSADV

Related Articles

Copyright © 2020 | ICD10monitor.com, a division of Panacea Healthcare Solutions, Inc.
287 East 6th Street | Suite 400 | St. Paul, MN | 55101 • TOLL FREE: 800.252.1578