FutureFocus November 14, 2018: MarketWatch: Medicare Advantage Contracting and Supplemental Benefits

Lisa Remington

In this FutureFocus, is our MarketWatch on Medicare Advantage contracting and supplemental benefits. We are learning that beneficiaries choosing MA plans are not advised on each plan’s supplemental benefits and benefits may be restricted on eligibility criteria. We discuss what providers should do about denials from Medicare Advantage plans, and the four ways MA plans manage post-acute providers.

Lisa Remington, President, Remington Health Strategy Group

The expansion of Medicare Advantage supplemental benefits will not be available, nor easy to find.  Medicare officials have touted the expansion as historic and an innovative way to keep seniors healthy and independent. Despite that enthusiasm, a full listing of the new services is not available on the web-based “Medicare Plan Finder,” the government tool used by beneficiaries, counselors and insurance agents to sort through dozens of plan options.

Even if people sign up for those plans, they won’t all be eligible for all the benefits. Advantage members will need a recommendation from a health care provider in the plan’s network. Then they may need to have a certain chronic health problem, a recent hospitalization or meet other eligibility requirements.

Of the 3,700 plans across the country next year, only 273 in 21 states will offer at least one. About 7 percent of Advantage members — 1.5 million people — will have access, Medicare officials estimate.

Among the new benefits that some Medicare Advantage plans said they will offer are:

  • Trips to the pharmacy or fitness center in addition to doctor’s appointments for plan members, depending on where they live or their health conditions.
  • A monthly or quarterly allowance for over-the-counter pharmacy products such as cold and allergy medications, eye drops, vitamins, supplements and compression stockings.
  • House calls by doctors or other health care providers, under certain conditions.
  • A home health care aide for a limited number of hours to help with dressing, eating and other daily activities, possibly including household chores and light housekeeping.

However, plans offering these and other services will likely have only some of the options and will have different eligibility criteria and other limitations. The same services likely won’t be available in every county the plan serves.

For example, next year an estimated 150,000 Humana Medicare Advantage members in Texas and South Florida — two of the 43 states Humana serves — who cannot be left alone at home will be able to get a free in-home personal care aide for up to 42 hours a year, so that their regular caregiver can get a break. And more than half of the members in Cigna-HealthSpring Advantage plans will have access to free transportation services in all but five of the 16 states and the District of Columbia where the company sells coverage.

What Providers Do About Denials From Medicare Advantage Plans

By: Elizabeth Hogue, Attorney

According to a Report from the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) entitled, "Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials," published on September 27, 2018, Medicare Advantage Plans cover more than 20 million beneficiaries in 2018. The large number of beneficiaries now covered by Medicare Advantage Plans and the capitated payment model used to pay Medicare Advantage Plans caused the OIG to be concerned about whether Medicare Advantage Plans were denying care inappropriately in order to make more money.

With regard to the capitated model of payment, a significant concern, according to the OIG, is the potential incentive the model creates for Plans to inappropriately deny access to services and payment in order to increase their profits. Plans that deny authorization of services for beneficiaries or payments to health care providers may contribute to physical or financial harm. Such denials also misuse monies that the Centers for Medicare and Medicaid Services (CMS) paid Plans for beneficiaries' healthcare. Even low rates of inappropriately denied services or payments can create significant problems for many Medicare beneficiaries and providers.

The OIG is preachin' to the choir here! Many providers have experienced wholesale denials of payment in recent years. So, what should providers do?

As described in the report referenced above, the OIG found that when beneficiaries and providers appeal preauthorization and payment denials, Medicare Advantage Plans overturned 75% of their denials during the period 2014-2016. In fact, the Plans reversed approximately 216,000 denials in each of these years. During the same period, independent reviewers at higher levels of the appeals process overturned additional denials in favor of beneficiaries and providers.

The OIG expressed concern about the high number of overturned denials in its Report. The OIG says that it raises concerns that beneficiaries and providers were initially denied services and payments that should have been rendered. The OIG was especially concerned because beneficiaries and providers rarely use the appeals process that is specifically designed to ensure access to care and payment. In fact, during 2014-2016, beneficiaries and providers appealed only 1% of denials to the first level of appeal.

According to the OIG, audits by CMS also reveal widespread and persistent problems with Medicare Advantage Plans related to denials of care and payment. In 2015, for example, CMS cited 56% of audited Plans for inappropriate denials. CMS also cited 45% of Plans for sending denial letters with incomplete or incorrect information, which may inhibit the ability of beneficiaries and providers to file successful appeals. Based on these audits, CMS took enforcement action against some Plans, including imposition of penalties and sanctions.

The OIG urges CMS in its Report to continue to monitor Plans, especially those with extremely high overturn rates and/or low appeal rates. The OIG also urges CMS to address persistent problems related to inappropriate denials and insufficient information in denial letters.

What should providers do? The "name of the game" for denials in the Medicare fee for service or "original" Medicare has always been appeal, appeal, appeal! As the above Report makes clear, the same applies to Medicare Advantage Plans. Both providers and beneficiaries should appeal, appeal, appeal!

©2018 Elizabeth E. Hogue, Esq.  All rights reserved. No portion of this material may be reproduced in any form without the advance written permission of the author.

Four Ways Medicare Advantage Plans Manage Post-Acute Providers

MA plans contract with only a select number of post-acute care providers. In order to win these MA contracts, post-acute care providers need to prove their value. They need to convince MA plans that they have lower costs and good patient outcomes.

  1. MA plans contract with only a select number of post-acute care providers. In order to win these MA contracts, post-acute care providers need to prove their value. They need to convince MA plans that they have lower costs and good patient outcomes.
  2. Second, MA plans have contracts with post-acute care providers that typically pay less then Medicare FFS rates, pay differently (e.g., per stay rather than per day), or require post-acute care providers to take on some financial risks. Such arrangements provide incentives to post-acute providers to discharge patients early to their homes or to a lower cost post-acute care setting.
  3. Third, MA plans use other managed care tools such as prior authorization to limit use of higher cost post-acute care providers. Plans also might impose higher cost-sharing for post-acute care services to incentivize patients to limit their use.
  4. Last but not the least, MA plans use data-driven insights combined with better patient and provider engagement to manage care transitions from acute to post-acute care and to coordinate care across settings. A variety of organizations and consultants help MA plans achieve these goals.

Medicare Advantage plans are looking for providers that can deliver high-quality care, partner on member satisfaction value, provide data driven value, and can reduce the cost of care.

Medicare Advantage plans are looking for providers that can deliver high-quality care, partner on member satisfaction value, provide data driven value, and can reduce the cost of care.

For more resources on Medicare Advantage Plans see:

Medicare Advantage Plans 2019: Testing New Payment Models and Care Delivery

Medicare Advantage and the IMPACT Act: Social Risk Factors Best Practice