The popularity of Medicare Advantage programs is on the rise. Medicare officials project that enrollment in these private alternatives to regular Medicare will spike by more than 11 percent next year, accounting for 37 percent of total Medicare beneficiaries. Seniors are drawn to Medicare Advantage by the attractive blend of lower premiums and enhanced benefits compared with regular Medicare, in spite of the fact that the Advantage plans are far more restrictive concerning the network of health care providers you’re allowed to see.
“Inappropriate” Claim Denials, and Few Appeals
But there’s apparently an unpublicized downside to Medicare Advantage plans, as described in this article from the Reuters news service. “A growing number of U.S. seniors are choosing Medicare Advantage, the popular private insurance alternative to traditional coverage,” the article begins. “But a new report by federal investigators finds that Advantage plans have a pattern of inappropriately denying patient claims.” The Reuters article, which appeared a few weeks ago, cites a new report from the Office of the Inspector General that uncovered “widespread and persistent problems related to denials of care and payment in Medicare Advantage.” The good news, says the article, is that the majority of denial-of-service claims are overturned on appeal. The bad news: during the three years of the federal study, a shockingly low number of denied claims were actually appealed – only ab0ut one percent. (For traditional Medicare the number of appeals is larger, but still tiny, at less than 3 percent.)
Almost 23 million beneficiaries will have opted for Medicare Advantage enrollment in 2019, estimates suggest. This article from the Washington Times explains why. “What has been critical to encouraging this transformation in Medicare has been the support from Congress and the Administration,” the article says. “CMS [the Center for Medicare and Medicaid Services] is providing Medicare Advantage plans with new flexibilities in benefit design, as well as possible expanded health-related supplemental benefits. This is offering new opportunities for innovative care delivery for all beneficiaries and the means to address critical health concerns for those with serious chronic conditions.” In other words, CMS, with the support of Congress and the Trump Administration, is bending over backward to make Medicare Advantage plans harder for consumers to resist.
“Managed Care” Can Mean Denial of Claims
The chief reason Medicare Advantage plans cost less – or appear to – is that they offer what is commonly called coordinated or managed care, say Medicare officials. Beneficiaries get their medical care through a network of preferred providers and often must get approval from a primary care physician before seeing a specialist. There are also significant fees and surcharges added whenever a policy-holder visits a doctor or clinic outside the network. Experts point out that this managed care model does save on costs but can also result in more claims being denied. Reuters says the basic motive for denial is financial. “The Advantage payment model reimburses plans a pre-set amount per patient, and this may be incentivizing plans ‘to deny preauthorization of services for beneficiaries, and payments to providers, in order to increase profits,’” in the words of the Inspector General’s report.
Comparing Medicare Advantage and traditional Medicare plans when it comes to denial of claims can be a challenge. The trade association for Medicare Advantage companies, AHIP (America’s Health Insurance Plans) says that only about 4 percent of Medicare Advantage claims were denied due to lack of prior authorization from the primary care physician, and about 8 percent due to problems with reimbursement. But even that small number translates into many thousands of denials in a system as big as Medicare Advantage. What we find really revealing is that, “when denied claims were appealed, the Advantage plans themselves overturned those denials 75 percent of the time,” says Reuters. This is a far higher overturn rate than traditional Medicare: about one-quarter of Medicare Part A denials and about half of Part B denials were overturned on appeal. The fact that three-fourths of Medicare Advantage denials are overturned suggests that the original grounds for rejection may have been flimsy, the Reuters report implies.
Know Your Rights and Responsibilities
Where does that leave you as you make your open enrollment decisions? Reuters quotes one official from the Office of the Inspector General: “What I would say is this: arm yourself with information that you need to understand your right to appeal rights and the process for doing that, no matter which program you choose.” The nuts and bolts of the appeal process depend on your plan. “In Medicare Advantage, the first level of appeal is made to the plan itself,” the article advises. “Start by requesting a written determination from the plan. In traditional Medicare, the first level of appeal is made to a claims administration contractor hired by Medicare.” We found a very helpful link to an article called “Appeal Basics” here at the website of the Medicare Rights Center.
There’s so much confusion and misinformation out there about health insurance! This article made us realize once again how important it is for seniors to get solid, professional and objective advice about every aspect of growing older. That certainly applies in the area of retirement planning. Instead of relying on a so-called investment advisor or insurance consultant who has a product to sell, we encourage you to seek the advice of an experienced professional like Rajiv Nagaich from AgingOptions. Rajiv will show you how all the pieces of your retirement plan need to fit together, just like the pieces of a puzzle: financial, legal, medical, housing and family. The result is a seamless plan called a LifePlan, a blueprint that will guide you as you create the fruitful and secure retirement of your dreams.
Why not invest just a few hours and find out more? Join Rajiv Nagaich at an upcoming LifePlanning Seminar – a free session packed with valuable information to show you what a wonderful experience a well-planned retirement can be. For dates, times and locations, click here – then register online or call us during the week. We’ll look forward to meeting you and answering your retirement questions.
(originally reported at www.reuters.com)