Hospitals say Nebraska patients denied care under Medicare Advantage

With the Medicare open enrollment period under way, the Nebraska Hospital Association is urging Nebraska seniors to make sure they fully understand what they're signing up for when they choose a plan.

Nationwide, some 51% of seniors now are covered by Medicare Advantage plans, which are administered by private health insurers. That's up from just over a third of seniors five years ago.

Jeremy Nordquist, the association's president, said the number of seniors choosing Medicare Advantage plans also has increased in Nebraska, albeit more slowly than in states such as Florida and Arizona. The plans are appealing because they may offer lower out-of-pocket costs. Part of the shift also is a result of intensive marketing efforts, often featuring celebrities.

But Nordquist said some Medicare Advantage plans are restricting access to health services by inappropriately denying covered services that are medically necessary and by requiring extensive documentation to demonstrate that necessity.

"Medicare Advantage will work well for some seniors," he said, "especially those who are able to stay healthy through their retirement years. But for many seniors, it leaves holes in their health care ... that will mean extensive out-of-pocket costs seniors didn't have to incur when they had traditional Medicare with a supplemental plan."

Hospitals, particularly those in rural areas, also are seeing impacts of the shift by patients from traditional Medicare to Medicare Advantage on their bottom lines, Nordquist said.

In a recent survey by the association, some 95% of hospitals responding said the shift had negatively impacted their finances, with 55% saying they'd seen somewhat of an impact and 40% reporting a significant impact.

Some 10% of the state's hospitals, Nordquist said, do not contract with any Medicare Advantage plans. About a third have turned down some plans because proposed reimbursement rates were so low.

That means a senior enrolled in a plan not accepted by their local hospital would be out of network, he said. That senior could face greater cost-sharing or have to go to a hospital farther away.

According to KFF, a nonprofit organization focused on health policy, beneficiaries with traditional Medicare can see any provider that accepts Medicare and is accepting new patients. They are not required to obtain a referral to see specialists. Prior authorization is rarely required and only for a limited set of services.

However, Nordquist said one of the biggest challenges hospitals face with Medicare Advantage plans is their more rigorous prior-authorization requirements.

Some 90% of Nebraska hospitals reported that Medicare Advantage plans negatively impact the care their hospital can provide and more than 92% said prior authorization required under the plans delays necessary care.

Larger hospitals have had to hire dozens of staff members to seek such approvals and address denials when they occur, he said.

Michael Dewerff, chief financial officer with Bryan Health, said the health system hired a physician adviser to handle the physician-to-physician discussions the plans often require to engage in appeals. The adviser still doesn't have time to argue every appeal.

Even though contracts call for the health system to be paid more through Medicare Advantage than under traditional Medicare, he said, denials, preauthorization work and underpayments mean the health system actually is paid a little less overall under Medicare Advantage plans.

Treg Vyzourek, CEO of Brodstone Healthcare in Superior, said his hospital is seeing longer times for approval for procedures and appointments with specialists, as well as denial of some procedures that would be approved under traditional Medicare.

And receiving prior authorization doesn't always mean claims will be paid, he said. The hospital has tallied $300,000 in unpaid claims over the past two years.

Summer Owen, chief financial officer with Great Plains Health in North Platte, said the health system has found it is difficult for patients to find primary care and specialists that accept Medicare Advantage plans.

"The benefits ... that are advertised often aren't available in rural areas," she said.

Rural hospitals also have found that it's difficult to place patients in skilled nursing facilities. Not all accept the plans. In one case, the plan denied a placement for a patient. The hospital appealed, received a final denial and discharged the patient, who could not afford to pay out of pocket for the facility. After being at home for three days, the patient had to be readmitted to the hospital.

In another, an orthopedic patient who needed complex care eventually was placed at a skilled nursing facility after a denial was overturned. But the patient had to spend 10 additional unpaid days in the hospital while the staff worked through the process.

Nordquist said a new rule that takes effect in January will help incrementally streamline the prior authorization process, aligning clinical criteria so that services approved under traditional Medicare have an easier path under Medicare Advantage.

New approvals and messaging standards will be required for marketing the plans for this enrollment period, which ends Dec. 7.

Nordquist said Nebraska's congressional delegation also has signed onto proposed legislation that would reform the prior authorization process.

"It's really important that we continue to make federal policy changes on this," he said.

Nebraska seniors can get free, unbiased help comparing their plan options by contacting their local office of the Nebraska State Health Insurance Assistance Program. In the Omaha area, Volunteers Assisting Seniors can be reached at 402-444-6617. To contact other groups around the state, call 800-234-7119.