A new federal watchdog report warns that privately run Medicare health plans used by millions of older Americans may be improperly denying patients medical care.
Federal auditors have found “widespread and persistent problems related to denials of care and payment in Medicare Advantage,” the privately administered plans that insure more than 20 million people, according to the report from the Health and Human Services Office of Inspector General.
Medicare Advantage plans collect a fixed fee from the government for taking care of patients 65 or older who qualify for traditional Medicare coverage. The fixed per-patient rates the government pays may give plans “an incentive to deny preauthorization of services for beneficiaries, and payments to providers, in order to increase profits,” the report said.
Medicare Advantage plans have become popular with consumers because they combine traditional Medicare benefits with additional coverage, such as vision, dental care, and prescription drugs.
The program paid $210 billion to Medicare Advantage plans last year. Companies including UnitedHealth Group Inc., Humana Inc., and Aetna Inc. are the largest sellers of the coverage. Enrollment in Medicare Advantage has roughly doubled in the past decade, and one-third of Medicare patients are now covered by the private plans.
In 2016, Medicare Advantage plans denied 4 percent of requests to approve treatment before it was provided, known as prior authorization, and 8 percent of requests for payment after treatment, according to the report.
Only 1 percent of patients disputed the insurers’ denials, but in those cases, the decisions were overturned three-quarters of the time, according to the report.
Improper denials “may contribute to physical harm for beneficiaries if they’re not getting access to services that they need,” said Rosemary Rawlins, the inspector general’s team leader on the report. Patients and doctors can also be harmed financially if not reimbursed for appropriate care, she said.
If plans aren’t providing the care they’re contracted to, it risks wasting taxpayers’ money. The government “has already paid to cover beneficiaries’ health care,” Rawlins said. Not every denial is an indication that patients are being blocked from needed treatment, however.
“You wouldn’t expect the denial rate to be zero,” Rawlins said. “Part of managing care is denying care that’s not needed.”