Medicare Advantage Scrutiny Continues

As we have noted in the past, Medicare Advantage plans - under which private insurers are paid by Medicare to provide benefits that traditional government-operated Medicare does, have grown to the point where a majority of Medicare recipients are under the privatized plans.

Employers that offer retiree health benefits, such as UC, now sometimes offer only Medicare Advantage - as UC at one point wanted to do - or offer it as a low-cost option along with traditional Medicare wrap-around plans - as UC does. 

It appears that the private providers of Medicare Advantage were overpaid on a risk-adjusted basis, making it attractive to expand into the Medicare market, advertising on TV, and offering features such as gym memberships not typically provided by traditional Medicare wrap-around plans. While these features are attractive, the question remains as to what happens when patients are seriously ill. Are they being denied benefits that traditional Medicare would have provided? The impression that all is not well with Medicare Advantage is beginning to create resistance in Congress and demands for more regulation.*

And there is this report from Stat News: A bipartisan group of lawmakers is urging the Biden administration to prohibit Medicare Advantage insurers from using artificial intelligence tools to deny care until it completes a systematic review of their accuracy and effects on patients. In a letter sent Tuesday, the lawmakers cited a STAT investigation in calling on the Centers for Medicare and Medicaid Services to beef up oversight of AI and algorithmic tools that discriminate against old and sick patients...

The letter comes after a STAT investigation in 2023 found that Medicare Advantage insurers were using an AI tool to cut off care to patients struggling to recover from grave illnesses and injuries such as cancer, severe strokes, and amputations. The investigation found that the owner of the algorithm, UnitedHealth Group, pressured its own clinicians to cut off rehabilitative care for patients within 1% of the days projected by an algorithm...

UnitedHealth and its subsidiary, NaviHealth, are facing a class-action lawsuit stemming from their use of the algorithm to deny care, as is Humana, another large Medicare Advantage insurer that has used the UnitedHealth-owned algorithm. Meanwhile, UnitedHealth has eliminated the NaviHealth name and rebranded the company as Optum Home & Community Care.

[Congressional members] also proposed a two-week grace period before an insurer can reissue a denial after an initial denial has been overturned on appeal. STAT’s investigation found that UnitedHealth Group was instructing its frontline clinical staff to immediately issue new denials to patients after they won appeals, resulting in a near-constant battle over coverage for severely ill family members...

Full story at: 

https://www.statnews.com/2024/06/25/medicare-advantage-ai-tools-denial-unitedhealth-lawmawkers-cms/.

A UnitedHealth Medicare Advantage plan is an option being offered by UC.** Just taking note of that...

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It goes without saying - but I'll say it anyway - that what ultimately happens to Medicare Advantage, and Medicare more generally, is going to be determined - along with a whole lot of other things - by the upcoming election in November. The recent debate was a reminder.

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*A major New York City municipal union recently has pulled back its support for Medicare Advantage for its retirees. See https://gothamist.com/news/key-union-pulls-support-for-moving-250k-nyc-retirees-to-medicare-advantage.

**https://ucnet.universityofcalifornia.edu/retirees/retiree-benefits/retiree-health/medical-plans-for-retirees/uc-medicare-choice/.