Time to hold private Medicare Advantage plans accountable

By Miranda Rosenberg, MS2
Palm Beach Post, Sept. 2, 2014

In 2004, only about 5.3 million Medicare enrollees participated in a Medicare Advantage plan. Now, that number has nearly tripled to 15.7 million. Payments to Medicare Advantage plans account for nearly a third of total Medicare spending today.

These plans were introduced with the false assumption that private insurers would provide Medicare-level coverage for less money than the federal government. It has not happened. Instead today the federal government pays private insurers more than it pays to cover equivalent patients under the traditional fee-for-service Medicare program.

Meanwhile, private Medicare plans have used sophisticated methods to attract the healthiest Medicare patients and discourage less healthy patients from enrolling.

The Patient Protection and Affordable Care Act aims to save the federal government money by bringing Medicare Advantage reimbursements in line with fee-for-service Medicare expenditures. Private insurers are actively fighting these reimbursement reductions, and are asking the federal government for more money in order to continue to provide their programs. They blame financial pressures from the Affordable Care Act for their recent narrowing of physician networks, but evidence suggests otherwise.

A recent study from the Wharton School of Business at the University of Pennsylvania examined how much patients benefit when Medicare Advantage programs receive higher reimbursements. Researchers found that when reimbursements rose, insurance company profits increased, and more companies were willing to offer comparable insurance products. Patient benefits and quality of care, however, remained unchanged. Seniors did not see lower monthly premiums, lower copays or easier access to more doctors, diagnostic tests and treatments.

Instead America’s taxpayers have been footing an inflated bill. Currently, Medicare Advantage plans receive adjustments based on a patient’s health status and expected health services usage, but patients’ risk and sickness scores can be manipulated to increase private insurers’ profits. The U.S. Department of Health and Human Services recently audited six Medicare Advantage plans and found that in 2007 alone, the federal government overpaid the plans by a combined $650 million because of inflated patient risk scores.

Medicare Advantage programs cannot selectively disenroll Medicare patients, but they can drop physicians without cause. In the past 12 months, Humana and United Healthcare — two of the largest Medicare Advantage programs — dropped thousands of physicians including many of the top physicians in the country — such as practitioners at Tampa’s nationally renowned H. Lee Moffitt Cancer Center and the entire Yale Medical School faculty.

Patients with the most complicated (and expensive) illnesses often wish to continue their care with physicians they have come to trust and who are familiar with their complex medical histories. In order to stay in their care, these patients have been forced to switch back to traditional Medicare. This not only directly generated an additional financial burden on the Medicare program, but also indirectly is generating a higher reimbursement to the Medicare Advantage programs since their reimbursements are based on traditional Medicare’s expenditures on patients on comparable age.

Forty-nine years ago, President Lyndon B. Johnson signed the landmark Medicare bill in Independence, Mo. In his remarks, he referred to America’s seniors as “our prideful responsibility” and declared that they were entitled to “the best medical protection available.”

Medicare Advantage programs have tried to justify higher government reimbursements by claiming that they keep patients healthier. But if their patients appear to be healthier because they have pushed out less healthy patients, then they are not meeting their “prideful responsibility.” It is time to put private Medicare insurers at financial risk and hold them responsible for the costs of patients disenrolling from their programs.

Miranda Rosenberg is a graduate of Harvard with a major in government. She is currently a second year medical student at University Of Pennsylvania Perelman School of Medicine with a research focus on health policy.