Buyer beware: Medicare Advantage plans have red flags

A recent report by the federal Department of Health and Human Services Office of Inspector General (OIG) revealed a trend among some Medicare Advantage plans of inappropriately denying or delaying care for plan holders. In many cases, these claims would otherwise be covered under traditional Medicare. As a result, many people are either paying for services out of pocket or going without care.

Medicare Advantage (MA), or "managed care," plans are all-in-one alternatives to traditional Medicare and are provided by private insurers. They are designed to offer more comprehensive coverage than traditional Medicare, including fitness programs and vision, hearing and dental services. Many MA plans limit coverage to in-network providers and also set a limit on yearly out-of-pocket costs for covered services.

Maggie Schaffer, Director of Case/Quality Management at Bothwell Regional Health Center, said that only one skilled residential facility in Sedalia currently accepts managed care plans, making it difficult for some patients to receive the short- or long-term medical care they need locally after leaving the hospital.

"Occasionally, the facility may try to get a one-time contract, but this is a long shot for them," she said. "If a patient has a Medicare Advantage plan, we often have to look outside of Sedalia for a facility that will accept the coverage."

Since Medicare Advantage plans are provided by private companies, they can have individualized rules of service, such as requirements for specialist referrals. Companies that provide MA plans also make the decisions on approving or denying care and often require prior authorization for services that would automatically be covered under original Medicare.

According to the OIG report, millions of patients have been denied care by their MA plan provider even though their doctors have deemed it medically necessary or beneficial. These denials happen in part because sometimes clinical criteria used by MA plans to determine coverage can be more strict than that of traditional Medicare. The OIG stated that about 13% of denied prior authorization requests met the criteria for coverage, as did 18% of denied payment requests.

"We get denials for inpatient care or skilled nursing on a regular basis," Schaffer said. "We try to do mediation, but we are not always successful."

Patients who have been denied coverage have the option to appeal the decision, but Schaffer said that process can be lengthy, resulting in further delay of care.

"An appeal for a patient is usually pretty overwhelming," she said. "They don't always have the words to have a decision overturned — they just know they are sick, and their doctor wants them in the hospital."

The popularity of MA plans has increased dramatically during the past 10 years, and enrollment numbers continue to rise. Currently, over 28 million people are covered under a private Medicare Advantage plan.

Schaffer said people who are considering or are currently covered by an MA plan should be aware of the findings of the 2022 OIG report and should weigh the advantages of an MA plan against the potential risks of denied coverage.

"Check with your local skilled nursing home, medical equipment company and home health company and see if they accept your insurance," she said. "Don't only rely on what the company selling the plan tells you, and if you have a Medicare Advantage plan, understand your right to an appeal and be familiar with the appeals process."