Updated on: July 30, 2019

The Unfair Advantage of Medicare Advantage Plans

Original story posted on: July 31, 2019

Medicare Advantage plans appear to be following their own rules.

Many of the national Medicare Advantage (MA) plans are misusing commercial guidelines and making up their own rules, as they see fit, in order to avoid paying hospitals equitably for the care provided to their members.

That was the assessment made during a recent edition of Monitor Mondays. During the broadcast’s Monday Rounds segment, we heard about an online discussion on a user group regarding MA plans that refuse to pay for inpatient admissions unless the patient stays longer than 72 hours. The discussion also revealed situations in which MA plans refused to pay for critically ill patients who transfer in less than 48 hours, as well as plans that use commercial criteria to deny admissions for patients who don’t meet inpatient criteria, but have a medically necessary hospital stay of over 48 hours. These plans also reportedly deny admissions for patients who meet inpatient commercial criteria, but don’t stay long enough to meet the plans’ arbitrary standards for inpatient admission.

“It’s not your fault, because you did not sign the contract with the payor and you were not asked to participate in the contract negotiations,” Dr. Ronald Hirsch told Monitor Mondays listeners. “So don’t take it personally. Use the required peer-to-peer discussion opportunity and continue to appeal these denials. If you track avoidable events, track these denials and attribute them to finance, just as you would attribute an avoidable day to a physician who rounded too late to safely discharge a patient.”

In other news, Hirsch reported that the Center for Medicare Advocacy (CMA) recently posted a memo about the new payment structure for home care, noting that such a plan is likely to adversely affect a hospital’s ability to acquire home care services for some patients. One of the factors to determine the payment to a home care agency for an episode of care is the origin of the patient, with two rates – one for community, and one for institution – and obviously, the referral from the community will have a lower payment.

“But what the Centers for Medicare & Medicaid Services (CMS) did was classify hospital outpatients as referred from the community, not from an institution, which they limit to only inpatient admissions from any acute-care facility or a referral from a skilled nursing facility (SNF),” Hirsch said. “Amazingly, their own analysis of past claims clearly demonstrates that patients referred to home care from outpatient stays require more resources than those referred from community sources.”

Hirsch said that CMS appears to be concerned that creating a special payment rate for these patients could create an incentive for providers to encourage outpatient encounters. Hirsch also said that CMS was concerned that home health agencies will tell patients to go spend the night in the hospital under observation care before they will accept them.

“What this all means is that some home care agencies might decide that they are no longer willing to take referrals of patients who had an outpatient total knee replacement or any other outpatient surgery, or any of the many observation patients who are discharged every day to home care,” Hirsch said. “I wonder if AARP will now have to start advising their members to insist on inpatient admission so that they can access the home care benefit.”

Programming Note: Listen to Judith A. Stein, JD, executive director of the Center for Medicare Advocacy, report on this story live, along with William Dombi, president of the National Association of Home Care and Hospice, during the next edition of Monitor Mondays, Monday, Aug. 5, 10-10:30 a.m. EST.

Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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