Senate Subcommittee Probes Medicare Advantage Insurers Over Coverage Denials and Profits: Demanding Transparency and Better Patient Care
Explore the Senate subcommittee's deep dive into Medicare Advantage insurers' practices, their profit motives, and the impact on beneficiaries. Learn about the concerns over the use of algorithms for coverage decisions and the calls for transparency and patient-focused reform in the healthcare industry.
On Wednesday, a Senate subcommittee asked top Medicare Advantage insurers to disclose internal documents that reveal their decision-making process for healthcare coverage. The request was made during a hearing on healthcare delays and denials under the Medicare Advantage program.
The committee is concerned about the detrimental effects of these decisions on patients needing skilled nursing care. The chairman, Richard Blumenthal, said there's increasing evidence that insurers are using algorithms, instead of medical professionals, to make care denial decisions. These decisions often affect seriously ill patients who require specialized or rehabilitation care before going home.
Blumenthal said that while these algorithms are described as mere tools by insurers, the repeated denials they cause cannot be ignored. He emphasized the need for transparency around these algorithms, which the insurers often label as proprietary.
Blumenthal also linked the continual need for prior authorizations or premature ending of certain healthcare coverages to insurers' profit motives. He shared data indicating that Medicare Advantage plans have higher profit margins per insured person compared to other insurance markets.
Letters have been sent to CVS-Aetna, United Heath, and Humana—companies that collectively cover more than half of all Medicare Advantage beneficiaries—requesting more details on their operational practices.
The Department of Health and Human Services’ Office of Inspector General testified that Medicare Advantage plans' criteria should align with original Medicare. However, she pointed out the potential incentive for insurers to deny services due to the fixed payment system in Medicare Advantage.
A report from last year highlighted the frequent denial of skilled nursing stays by Medicare Advantage plans, causing a decrease in stays and the length of such stays for skilled nursing providers.
Witnesses discussed the issues surrounding denial of skilled nursing care, highlighting that Medicare Advantage plan holders often face a complicated process to appeal their denied coverage. Patients caught in this system often have to choose between paying out of pocket or leaving the facility against medical advice. Appeals that are eventually approved can take up to a year to be reimbursed.
The hearing also examined the difficulty in controlling insurers' practices that help them manage risk. Changing these practices could lead to higher costs for the government. However, the focus of the subcommittee members seemed to be on the personal hardships caused by coverage concerns.
Personal stories shared included that of a widow from Connecticut, who detailed her struggles to secure intensive therapy for her husband following the removal of a brain lesion. The emotional and financial strain of navigating the healthcare system added to the distress of dealing with her husband's health crisis.
The committee's examination of Medicare Advantage's internal workings underscores the larger concerns about private insurance companies' role in managing public health benefits. It also draws attention to the long-debated issue of transparency in how these companies operate, particularly in their decision-making process for providing coverage.
Given the fixed payment system in Medicare Advantage, insurance companies may have financial incentives to limit services provided to beneficiaries, leading to a conflict of interest between ensuring quality care and maintaining profitability.
Testimonies and personal stories shared during the hearing highlighted this concern. They also underscored the need for reform, particularly in areas such as skilled nursing care and rehabilitation services. While these services are often crucial in recovery, they are also costly, leading to frequent denials that can delay or impede necessary treatment.
The committee expressed interest in potentially legislating to improve the situation if necessary. However, the potential for increased governmental costs presents a significant obstacle, suggesting the need for a balanced approach that ensures both adequate patient care and sustainable cost management.
An additional point of concern is the use of artificial intelligence and algorithms in decision-making. There's growing evidence that these tools may be contributing to systematic denials of care. While they may increase efficiency, there's a risk that they could lead to arbitrary or inappropriate denial of services, particularly if they are not overseen or understood adequately.
The shift to more transparency in the Medicare Advantage plans, which now cover more than half of all Medicare beneficiaries, could result in significant changes to how these plans operate and provide coverage. However, the details of these potential changes and their impact on beneficiaries, insurance companies, and overall healthcare costs remain to be seen.
As of now, the committee has put the major insurance companies on notice, seeking more information on their practices and signaling their intent to improve the system for patients who depend on Medicare Advantage for their healthcare needs.
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ABOUT THE AUTHOR:
Ms. Pinky Maniri-Pescasio is the Founder of GoHealthcare Consulting. She is a National Speaker on Practice Reimbursement and a Physician Advocate. She has served the Medical Practice Industry for more than 25 years as a Professional Medical Practice Consultant.