Hospitals and insurance giants are clashing over the wildly popular Medicare Advantage plans as both seek to protect their interests. Many seniors enrolled in these plans are in the crosshairs.
Hospitals and health care providers are terminating contracts with insurers that provide private-sector alternatives to Medicare due to too many denials, delays, or refusals to pay for treatments typically covered by government-run health insurance. is increasing.
The fight has deepened this year as the federal government releases new guidance on how the plans should be implemented, posing a major new threat to revenue streams for some of the nation's largest insurers.
“These knife fights, as we call them in the industry, I think we're seeing more and more of them,” Whit Mayo, an analyst at Leerink Partners, told Yahoo Finance. “And I wonder if this means insurance companies are thinking, 'Okay, this might be an even bigger problem for our bottom line.'”
Elderly people also have many risks. If more hospitals drop these plans, seniors who rely on them could end up paying higher costs or even not being able to see the doctors they want. In the face of these challenges, many people have little recourse.
“It stinks,” Mayo said. “It puts consumers in the middle of these negotiations, but they also want to know whether they will incur out-of-network costs if they find a provider that is not in their network. “We take it very seriously. So the mental toll that comes with this is huge.”It's terrible for people who are caught in the middle. ”
“The deck is heavily stacked in favor of enrollment in MA.”
According to Chartis research, 33 million Americans have MA plans this year, representing just over half of Medicare-eligible individuals. These are provided by giants such as UnitedHealthcare, owned by UnitedHealth Group (UNH), as well as Humana (HUM) and his CVS/Aetna (CVS).
These MA plans have only grown in popularity since the program's inception, surpassing traditional Medicare in enrollment over the past six years. His two big draws to these plans are benefits and cost.
MA plans offer benefits not offered by traditional Medicare, such as dental and vision coverage and a grocery allowance. Many have low or $0 monthly premiums. This is cheaper than Medicare's $174.70 monthly premium and the supplemental coverage that seniors who choose Medicare often purchase.
“MA plans have very good coverage. That additional funding allows MA plans to provide services that Medicare does not provide,” David Lipshutz, associate director of the Medicare Advocacy Center, told Yahoo Finance. Ta. “This deck contains many contents that are advantageous for his MA registration.”
Of course, there are trade-offs. Some MA plans require enrollees to access a network of providers that have contracts with their insurance company. If an enrollee goes out of network, they may have to pay higher medical bills or may not be allowed contact with that provider at all.
“They deny it.”
The effects of this trade-off culminated in 2022. Just as seniors who delayed elective procedures flooded hospitals that were already suffering from severe staffing shortages, MA insurers began denying them additional coverage for the care they needed.
The act infuriated medical workers.
“This practice is time-consuming and costly, but more importantly, it is a significant cost-effective option for patients who are often caught in the middle or have coverage that differs from that provided to patients enrolled in traditional Medicare. Not appropriate,” the spokesperson wrote. Louisville, Kentucky-based Baptist Health Medical Group ended its MA contract with Humana last year.
Some hospitals are proceeding with treatment without prior permission because it is an emergency and the appeal process takes too long.
“Some patients just can't wait,” said Chris Van Gorder, president and CEO of San Diego-based Scripps Health. “Delaying heart or cancer surgery can be life-threatening. “There is,” he said.
Then, when a hospital submits a claim, “the hospital says, 'We don't authorize it,' and rejects it,” Van Gorder said.
“It’s going to get ugly.”
As a result, many healthcare providers are losing money.
Scripps Health lost $75 million last year from patients with MA insurance, Van Gorder said.
Scripps Clinic and Scripps Coastal, the medical groups that have exclusive medical services agreements with Scripps Health, have attempted to renegotiate with the MA insurance company to reach acceptable terms, but ultimately was not successful.
Then, last year, the medical organization withdrew from MA HMO contracts with UnitedHealthcare, Anthem Blue Cross, Blue Shield of California, Health Net of California, SCAN Health Plan, UnitedHealthcare of California, and Alignment Health. did.
“The last thing I wanted to do in the world was cancel contracts with 32,000 patients. My job is to provide medical care, not cancel medical care,” Van Van said. Gorder said. “I don't have the financial means.”
Over the past 18 months, more than a dozen other health and hospital systems across the country have dropped out of MA plans' networks, many citing medical denial issues.
“Unfortunately, there's going to be some pretty adversarial contract negotiations between payers and hospitals over the next few years, and I think we're at the forefront of that,” Van Gorder said. “I think this is going to be terrible.”
UnitedHealthcare tells Yahoo Finance, “Each year, we successfully renegotiate the majority of our contracts with healthcare providers. Our goal is to ensure that our members are charged fair and sustainable rates. and to appropriately manage the resources available to cover the medical costs of our members.” for the services they need. ”
Humana and Centene did not respond to requests for comment.
Still, the turmoil has also caught the attention of the Centers for Medicare and Medicaid Services, which recently announced changes to processing prior authorizations, patient risk coding and other measures to address some of the concerns of providers. Announced new rules regarding reporting and transparency requirements.
It will also make it harder to deny claims, putting more pressure on insurance companies and potentially forcing them to reduce the benefits they offer in MA plans.
“The industry is currently embroiled in the highest level of controversy in history. It's a very challenging environment for planning,” Mayo said. “And I think there will be sectors that will see significant cuts in benefits.”
“People don't have much recourse.”
On the other hand, elderly people who need medical care are caught in the middle.
Seniors can choose another MA plan or Original Medicare during Medicare Advantage's open enrollment period from January 1 to March 31. Plan exchanges increased in January and February, Mayo said, based on monthly data from CMS.
Still, switching to traditional Medicare isn't a panacea either. Seniors have no problem enrolling in Medicare, but may find it difficult to enroll in Medigap insurance (supplemental insurance that covers 20% of medical expenses not covered by Medicare).
When seniors sign up for Medicare for the first time at age 65, many insurance companies that offer MA plans will deny Medigap coverage based on pre-existing conditions or charge higher premiums. I can not do it.
But insurers could deny pre-existing conditions or charge extra if someone wants to switch to traditional Medicare in the future. Therefore, seniors may choose another MA plan instead, which may later be abandoned by their health care provider.
“It's dangerous every year,” Lipshutz said. “When doctors go out of network, people have less recourse.”
Janna Herron is a senior columnist at Yahoo Finance. Follow her on Twitter @JannaHerron.
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