PNHP

Medicare Advantage Overbills Taxpayers by $140 Billion a Year—Enough to Wipe Out Medicare Premiums

Medicare Advantage Overbills Taxpayers by $140 Billion a Year—Enough to Wipe Out Medicare Premiums

"Medicare Advantage is just another example of the endless greed of the insurance industry poisoning American healthcare," says a new report from Physicians for a National Health Program

By Jake Johnson
Common Dreams, October 4, 2023

A report published Wednesday estimates that privately run, government-funded Medicare Advantage plans are overcharging U.S. taxpayers by up to $140 billion per year, a sum that could be used to completely eliminate Medicare Part B premiums or fully fund Medicare’s prescription drug program.

Physicians for a National Health Program (PNHP), an advocacy group that supports transitioning to a single-payer health insurance system, found that Medicare Advantage (MA) overbills the federal government by at least $88 billion per year, based on 2022 spending.

That lower-end estimate accounts for common MA practices such as upcoding, whereby diagnoses are piled onto a patient’s risk assessment to make them appear sicker than they actually are, resulting in a larger payment from the federal government.

But when accounting for induced utilization—”the idea that people with supplemental coverage are likely to use more health care because their insurance pays for more of their cost”—PNHP estimated that the annual overbilling total could be as high as $140 billion.

“This is unconscionable, unsustainable, and in our current healthcare system, unremarkable,” says the new report. “Medicare Advantage is just another example of the endless greed of the insurance industry poisoning American healthcare, siphoning money from vulnerable patients while delaying and denying necessary and often lifesaving treatment.”

Even if the more conservative figure is accurate, PNHP noted, the excess funding that MA plans are receiving each year would be more than enough to expand traditional Medicare to cover dental, hearing, and vision. Traditional Medicare does not currently cover those benefits, which often leads patients to seek out supplemental coverage—or switch to an MA plan.

The Congressional Budget Office has estimated that adding dental, vision, and hearing to Medicare and Medicaid would cost just under $84 billion in the most costly year of the expansion.

“While there is obvious reason to fix these issues in MA and to expand traditional Medicare for the sake of all beneficiaries,” the new report states, “the deep structural problems with our healthcare system will only be fixed when we achieve improved Medicare for All.”

Bolstered by taxpayer subsidies, Medicare Advantage has seen explosive growth since its creation in 2003 even as it has come under fire for fraud, denying necessary care, and other abuses. Today, nearly 32 million people are enrolled in MA plans—more than half of all eligible Medicare beneficiaries.

Earlier this year, the Biden administration took steps to crack down on MA overbilling, prompting howls of protest and a furious lobbying campaign by the industry’s major players, including UnitedHealth Group and Humana. Relenting to industry pressure, the Biden administration ultimately agreed to phase in its rule changes over a three-year period.

Leading MA providers have also faced backlash from lawmakers for handing their top executives massive pay packages while cutting corners on patient care and fighting reforms aimed at rooting out overbilling.

As PNHP’s new report explains, MA plans are paid by the federal government as if “their enrollees have the same health needs and require the same levels of spending as their traditional Medicare counterparts,” even though people who enroll in MA plans tend to be healthier—and thus have less expensive medical needs.

“There are several factors that potentially contribute to this phenomenon,” PNHP’s report notes. “Patients who are sicker and thus have more complicated care needs may be turned off by limited networks, the use of prior authorizations, and other care denial strategies in MA plans. By contrast, healthier patients may feel less concerned about restrictions on care and more attracted to common features of MA plans like $0 premiums and additional benefits (e.g. dental and vision coverage, gym memberships, etc.). Insurers can also use strategies such as targeted advertising to reach the patients most favorable to their profit margins.”

A KFF investigation published last month found that television ads for Medicare Advantage “comprised more than 85% of all airings for the open enrollment period for 2023.”

“TV ads for Medicare Advantage often showed images of a government-issued Medicare card or urged viewers to call a ‘Medicare’ hotline other than the official 1-800-Medicare hotline,” KFF noted, a practice that has previously drawn scrutiny from the U.S. Senate and federal regulators.

PNHP’s report comes days after Cigna, a major MA provider, agreed to pay $172 million to settle allegations that it submitted false patient diagnosis data to the federal government in an attempt to receive a larger payment.

Dr. Ed Weisbart, PNHP’s national board secretary, told The Lever on Wednesday that such overpayments are “going directly into the profit lines of the Medicare Advantage companies without any additional health value.”

“If seniors understood that the $165 coming out of their monthly Social Security checks was going essentially dollar for dollar into profiteering of Medicare Advantage, they would and should be angry about that,” said Weisbart. “We think that we pay premiums to fund Medicare. The only reason we have to do that is because we’re letting Medicare Advantage take that money from us.”

https://www.commondreams.org…

Our Payments, Their Profits

Quantifying Overpayments in the Medicare Advantage Program

Physicians for a National Health Program, October 4, 2023

Introduction: By our estimate, and based on 2022 spending, Medicare Advantage overcharges taxpayers by a minimum of 22% or $88 billion per year, and potentially by up to 35% or $140 billion. By comparison, Part B premiums in 2022 totaled approximately $131 billion, and overall federal spending on Part D drug benefits cost approximately $126 billion. Either of these— or other crucial aspects of Medicare and Medicaid—could be funded entirely by eliminating overcharges in the Medicare Advantage program.

Medicare Advantage, also known as MA or Medicare Part C, is a privately administered insurance program that uses a capitated payment structure, as opposed to the fee-for-service (FFS) structure of Traditional Medicare or TM. Instead of paying directly for the health care of beneficiaries, the federal government gives a lump sum of money to a third party (generally a commercial insurer) to “manage” patient care.

Although private insurers have been involved in one form or another since the early days of Medicare, it is only since the establishment of Medicare Advantage in the Medicare Modernization Act of 2003 that such participation has grown significantly. Since 2007, the share of beneficiaries enrolled in MA has nearly tripled, and the program now manages the care of more than half of all eligible beneficiaries.

Proponents of managed care have long maintained that programs like MA reduce expenditures, improve quality of care, and enable consumer choice. The reality is just the opposite. The data show that privatized Medicare has not once yielded savings for the program; conservative estimates by the Medicare Payment Advisory Commission (MedPAC), an independent agency created to advise Congress on the Medicare program, show that payments to MA plans over the past two decades have always been higher than they would have been for patients in Traditional Medicare. Despite this additional spending, MedPAC could not say conclusively whether care outcomes fared better under MA. And while patients in Traditional Medicare have access to nearly all doctors and hospitals across the country, those in MA must contend with heavily limited networks and arcane prior authorization procedures, calling into question which “choices” consumers are ultimately able to make.

These are all serious issues, but this report will deal chiefly with the first problem: overcharging in Medicare Advantage. Various elements of MA, either by design or by consequence, result in a much higher level of government spending than is necessary to provide Medicare benefits, with much of this money going toward corporate profits. Instead of creating a more efficient system of care, large corporations have used MA as their cash cow, taking billions in taxpayer dollars while using a plethora of tactics to delay or deny treatment for patients.

In this paper, we will discuss the various methods by which MA is grossly overpaid for the care and services it provides to beneficiaries. We will attempt to estimate at least in a preliminary manner the magnitude of these overpayments in each case. It is worth noting that much of this is shrouded in mystery because the relevant data is unavailable to researchers or difficult to measure. What is clear, however, is that the privatization of Medicare is for the benefit of private insurers. Patients, the government, and the American taxpayer are simply left to pick up the tab.

full paper:
https://pnhp.org/MAReport

Insurers Are Gaming Medicare — To The Tune Of $140 Billion

Private health insurers are systematically taking advantage of Medicare while denying care to seniors, a new report shows.

By Matthew Cunningham-Cook and Lucy Dean Stockton
The Lever, October 4, 2023

The federal government is losing as much as $140 billion per year by subsidizing private Medicare Advantage plans, according to a bombshell new report. In the groundbreaking investigation, health care researchers identified the four major ways that private insurers systematically exploit the taxpayer-funded national health insurance program while denying care to the nation’s most vulnerable patients.

The researchers additionally found that seniors could save over $1,800 in annual fees taken from their Social Security checks if the government redirected what it spends subsidizing Medicare Advantage plans to instead reduce premium costs. Under the current arrangement, “traditional” Medicare pays about $12,000 a year to private Medicare Advantage insurers for every patient whose care they “manage.”

Medicare Advantage insurers — which include UnitedHealth Group, Humana, Cigna, and Blue Cross Blue Shield — are profiting at the expense of ordinary seniors, 40 percent of whom are completely dependent on their Social Security benefits, which average about $1,600 per month after Medicare premiums are taken out.

“Insurers are quietly plundering the Medicare trust fund for their own profits and compromising the health of senior citizens and [people with] disabilities,” said Ed Weisbart, a family medicine physician who is the secretary of Physicians for a National Healthcare Program (PNHP), a single-payer advocacy group that produced the report.

Medicare, the public health insurance for seniors and people with disabilities, is one of the most popular and effective social programs in the country. The program is funded by taxpayer money and keeps costs low by setting fixed prices with health care providers.

Medicare Advantage lets private insurance plans step in as a middle man. When the program was established in its current form in 2003, its proponents argued it would help save the government money on Medicare spending. However, research from the Medicare Payment Advisory Commission (MedPAC), an independent agency that advises Congress on Medicare, shows that the program has not yielded savings in the two decades since it was established.

Medicare Advantage plans receive a flat payment for the care they provide, strongly incentivizing the insurers sponsoring the plans to ration care — leading to high rates of wrongful claim denials, worse health outcomes, and costly administrative headaches for providers.

These private plans have been under fire for the rate at which they deny patient care. As The Lever reported, these claims have a devastating cost to health outcomes but frequently save insurance companies money as patients forgo treatments they cannot afford.

Since then, claim denials have only increased. A report from the KFF (formerly known as the Kaiser Family Foundation), a major foundation that studies health policy issues, found that two million prior authorization requests were denied by Medicare Advantage in 2021 — significantly higher than the rates for traditional Medicare.

Since 2007, the share of beneficiaries enrolled in Medicare Advantage plans has tripled, far outpacing the growth of traditional Medicare enrollment.

Many people leave traditional Medicare for private plans, and once they do, an administrative barrier makes it difficult to return. That’s because while Medicare covers 80 percent of patients’ health care costs, the last 20 percent are usually covered by the individual or a supplementary plan called Medigap. But in most states, when someone leaves Medicare Advantage, often due to illness necessitating broader coverage networks, Medigap insurers can deny future coverage — effectively making their return to traditional Medicare impossible.

As of this year, Medicare has reached a turning point: Medicare Advantage now manages care for over half of all eligible beneficiaries.

As patients are joining these for-profit plans, providers are leaving. Scripps Health, a major health care provider in San Diego, announced in late September that it would decline most Medicare Advantage plans moving forward, because of their practices.

Scripps CEO Chris Van Gorder told MedPage Today, “We are a patient care organization and not a patient denial organization and, in many ways, the model of managed care has always been about denying or delaying care — at least economically.”

Van Gorder explained that the private plans’ routine denials forced Scripps’ medical groups to operate at a $75 million annual loss, adding: “That is why denials, [prior] authorizations, and administrative processes have become a very big issue for physicians and hospitals.”

Scripps is one of many health care groups around the country dropping Medicare Advantage plans. In the last month, medical groups in Ohio, Virginia, Oregon, Missouri, Oklahoma, and South Dakota have all terminated or partially terminated their contracts with Medicare Advantage plans, citing delayed reimbursements and administrative conflicts.

In August, Humana, which controls 18 percent of the Medicare Advantage market, posted a 38 percent increase in its profit from the same quarter in 2022, earning $957 million in one quarter alone. UnitedHealth — the largest Medicare Advantage insurer, controlling 29 percent of the market — posted $8.1 billion in profits, up $1 billion, or 14 percent, from the same period the prior year. The enormous profits are driven by the substantial subsidies that Medicare Advantage offers the insurers.

Taking Advantage

The report from PNHP is among the first to fully categorize the predatory costs that the private insurance plans impose on Medicare. It spells out four key ways that Medicare Advantage games the Medicare system for profit.

Favorable selection and deselection:

Researchers found that Medicare Advantage plans actively seek out healthier patients, targeting their marketing towards a healthier demographic in a process called “favorable selection” and “favorable deselection.”

While traditional Medicare accepts anyone who is eligible, private plans aggressively market to a healthier population — and when high-need patients find that their Medicare Advantage plans won’t cover their health care costs, they often try to return to traditional Medicare.

This means that low-needs patients turn to Medicare Advantage, taking Medicare funding with them, while high-needs patients further strain the traditional Medicare system with elevated care costs.

The flat rates that the government pays to Medicare Advantage insurers is based on the costs of traditional Medicare participants, but traditional Medicare participants tend to be sicker. Research shows that patients tend to switch to traditional Medicare as they get sicker due to Medicare Advantage plans’ narrow provider networks and restrictions on care.

The PNHP report cites a 2019 study from KFF, finding that similarly situated seniors who switched to Medicare Advantage plans received $1,253 in less care in a given year than those who had stayed in traditional Medicare.

MedPAC found in June that favorable selection for a healthier Medicare Advantage population resulted in 11 percent lower costs for Medicare Advantage plans, even as insurers get paid on the basis of the traditional, higher-need Medicare population. The report estimates that these overpayments cost Medicare $44-56 billion annually.

Upcoding:

Even though beneficiaries enrolled in Medicare Advantage plans tend to be healthier, the private plans systematically make their patients appear sicker to juice more profits out of Medicare.

As part of a complex formula, Medicare Advantage insurers receive “risk adjustment” payments when their patients have more severe conditions, strongly incentivizing the private plans to create records that indicate having sicker patients, a practice known as “upcoding.”

As The Lever covered in May, this fraudulent practice leads to $20 billion in additional spending per year — and generates more profits for insurers. The PNHP report cites a 2021 study showing that risk adjustment payments are 20 percent higher in Medicare Advantage than traditional Medicare.

Quality benchmarks and county bonuses: 

Currently, Medicare provides bonuses to Medicare Advantage plans based on the locations they cover, supposedly to ensure equal geographic access to coverage. But as MedPAC noted in its 2023 report, these payments “are not necessary for maintaining affordable supplemental coverage” and “fail to capture savings for the Medicare program.”

These payments are combined with bonuses that Medicare Advantage insurers receive for being higher “quality.” Over half of all plans currently receive over four stars out of five, making them eligible for “quality” payments — and the rating system is plagued with limited information, making it a poor performance measure.

A June 2023 report from the Urban Institute found that “after weighting, about two-thirds of a contract’s star rating is determined by beneficiary experience and administrative effectiveness,” and that “measures of beneficiary experience do not permit meaningful distinctions across [Medicare Advantage] contracts.” The report added, “Administrative effectiveness measures do not target important deficiencies regulators have identified within [Medicare Advantage] organizations.”

The PNHP report estimates that quality benchmarks and county bonuses may amount to $24-28 billion in annual overspending.

Induced utilization:

In traditional Medicare plans, only 80 percent of health care costs are covered — and 86 percent of traditional Medicare beneficiaries have some type of supplemental coverage, whether from a Medigap plan, an employer-sponsored health plan for retirees, or another form of supplementary coverage to cover the last 20 percent.

Medicare Advantage participants do not need supplementary coverage.This is an essential feature of the marketing of Medicare Advantage plans: Seniors accept the costs of narrow networks and managed care in exchange for not needing to pay the cost of supplementary coverage.

But Medicare makes spending assumptions for Medicare Advantage on the basis of significantly more comprehensive coverage than what the plans actually offer. That means that Medicare Advantage plans are paid using assumptions that they provide more care than they actually do.

The report estimates that these costs amount to $36 billion per year.

Experts say that the $140 billion these predatory practices are costing the government could instead go to reducing costs for seniors.

“Medicare Advantage overpayments could be rediverted into paying everybody’s [traditional Medicare] premiums, the money they’re paying every month out of Social Security,” said Weisbart, from PNHP.  “It’s going directly into the profit lines of the Medicare Advantage companies without any additional health value.”

He added, “If seniors understood that the $165 coming out of their monthly Social Security checks was going essentially dollar for dollar into profiteering of Medicare Advantage, they would and should be angry about that. We think that we pay premiums to fund Medicare. The only reason we have to do that is because we’re letting Medicare Advantage take that money from us.”

Analysts from Moody’s Investor Service, a bond credit rating agency, suggested in March that they could expect slower growth in the overall insurance industry compared to 2022, but that they “expect continued growth in Medicare Advantage.”

https://www.levernews.com…

Lancet Panel on Investor-Owned Health Care

Summary: The recent Lancet webinar on private for-profit ownership of US health care assembled leading experts on this crucial issue. We must – and can – reverse this commoditization of health care.

Public policy and health in the USA: Should investors own healthcare? (click HERE, scroll down to “On-demand webinars”), The Lancet Webinars, Sept. 2023

Claudia Fegan: The question of “Should investors own healthcare,” I believe is the most important policy question facing healthcare in the United States today. We spend over 4 trillion dollars a year, 18 percent of our gross domestic product is spent on healthcare in the U.S. each year. That is more than twice as much as most other developed countries. Yet we rank miserably in the outcome measures such as life expectancy, preventable hospitalizations, maternal mortality, and suicide. We need to ask what role in the U.S. the current investor-driven system plays in causing and exacerbating the racial disparities in healthcare.

Donald Berwick: In the past few years I’ve tried to understand how such a noble system can be so underperforming in its potential at the cost of the well being and spirit of the work force and the patients it serves, I have come to use the word GREED, and I’ve been challenged for that because most of the people that work everyday in all of the sectors of healthcare feel quite good about what they’re doing, they’re trying to help patients. But when we look at the underlying dynamics, I believe the commoditization, commercialization, the role of changing ownership to private hands, and the proletarianization of the healthcare workforce lie at the core of at least some of the reasons why this system is so deeply underperforming. You cannot find a sector in healthcare in which greed is not just manifest, but I would claim even dominant.

Greed right now effectively concentrates wealth in the United States; wealth concentrates political power and influence through the role of lobbying and political contribution, and that political contribution stops efforts to reign in or place constraint on greed.

Rosemary Batt: Private equity turns healthcare from a social good into a financial asset. It extracts wealth through financial strategies and not primarily by providing better care. There may be some improvements in care, but the fundamental focus is on financial gain. (She explains the mechanisms that private equity uses for wealth extraction.)

Steffie Woolhandler: What we’ve seen is what I’ll call financialization of the entire healthcare system: money has become the mission. Traditionally providers invested money in buildings and equipment in order to produce medical care. That was our service mission or social mission. Now, financial entities are investing in medical care to produce money through profit, and money is their mission, and that, fundamentally, is what is wrong with the U.S. healthcare system today. This is happening despite the fact that the majority of the American people do not want this. Polls continue to show that the majority of the American people want a nonprofit, single payer, Medicare for All system for the United States. But Medicare for All is not enough. We need to address ownership, and we need to take back hospitals, community resources, the doctors’ practices, we need to take them back from investors and return control to community providers and patients (see HJM post on The Nation “Medicare For All Is Not Enough”).

Q&A:

Don McCanne: Is there any prospect that the United States could have a progressive legislature and administration that would support a healthcare financing system exclusively devoted to the service of universal patient care rather than being devoted to private wealth?

Steffie Woolhandler: Absolutely. There’s that possibility. Other nations have succeeded in establishing non profit, publicly owned, sometimes publicly regulated and publicly administered systems. If they can do it, we can do it. It’s just going to take a lot of organizing and a lot of educating the public about the possibility.

Donald Berwick: I’ll add that we are the outlier. Every other country finds a way to guarantee care to everyone – every other developed country – at a cost of about half of ours. So no-one can say, “it can’t be done.” It’s a matter of will, and I fear nowadays it’s a matter of political will.

Comment:

By Don McCanne, M.D.

This excellent one hour webinar by The Lancet explains why single payer alone is not enough. Not only do we have to establish an equitable, affordable financing system that makes healthcare accessible for all (single payer), we are going to have to address the issue of ownership of the healthcare delivery system such that our healthcare dollars that derive from us, the people, end up serving the public, social mission of providing healthcare for all instead of the private mission of enhancing personal megawealth for the few.

The notice of this Lancet webinar should be distributed to all who care, and to those who don’t now seem to care but may have within them the capacity to care when the facts are understood.

Whether nominally public or private, it’s our money; let’s spend it on us.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Denied Medical Claims Most Likely with Private Insurance & Rarely Resolved

Summary: This national survey finds that 21% of privately insured individuals had claims denied in the last year, on top of a similar frequency of denied or delayed prior authorizations. Those with other insurance problems (like high drug copays) had more denials, suggesting flawed insurance. Just 29% of denials were resolved.

Consumer Survey Highlights Problems with Denied Health Insurance Claims, KFF, Sept. 29, 2023, by Karen Pollitz, et al

An earlier KFF survey of adults with health insurance found that roughly 6 in 10 insured adults experience problems when they use their insurance. Problems studied include denied claims, network adequacy issues, preauthorization delays and denials, and others. … This Data Note takes a closer look at insured adults who said that in the past year, insurance did not pay for care that they received and thought was covered: a “denied claim.”

Comment:

By Jim Kahn, M.D., M.P.H.

This important analysis documents the extent and shape of claims denials. Here are the key points:

Figure 1: Almost 1 in 5 insured adults had at least one claim denied in the last year. Those with private insurance had more denials.

Figure 4: Individuals with other insurance problems – like the 16% with prior authorization denials or delays, or the 23% with drug payment issues, or the 27% with low insurance payments – were far more likely (as high as 76%) to experience claims denials. This suggests that some insurance is failing way short on multiple measures of financial protection.

Figure 5: Only 29% of those with denied claims had their major insurance problem resolved. As the full report indicates, many people don’t understand the denial rules or how to appeal.

If you want further insights, read the full report.

It’s no wonder that 40% of Americans have significant medical debt with the combined high prevalence of claims denials, prior authorization denials, and high cost-sharing.

Needless to say (but I do like to say it), single payer would greatly simplify and largely eliminate these problems.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Hospitals are dropping Medicare Advantage left and right

By Jakob Emerson
Becker’s Hospital Review, September 27, 2023

Medicare Advantage provides health coverage to more than half of the nation’s seniors, but a growing number of hospitals and health systems nationwide are pushing back and dropping the private plans altogether.

Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers. Some systems have noted that most MA carriers have faced allegations of billing fraud from the federal government and are being probed by lawmakers over their high denial rates.

“It’s become a game of delay, deny and not pay,” Chris Van Gorder, president and CEO of San Diego-based Scripps Health, told Becker’s. “Providers are going to have to get out of full-risk capitation because it just doesn’t work — we’re the bottom of the food chain, and the food chain is not being fed.”

In late September, Scripps began notifying patients that it is terminating Medicare Advantage contracts for its integrated medical groups, a move that will affect more than 30,000 seniors in the region. The medical groups, Scripps Clinic and Scripps Coastal, employ more than 1,000 physicians, including advanced practitioners.

Mr. Van Gorder said the health system is facing a loss of $75 million this year on the MA contracts, which will end Dec. 31 for patients covered by UnitedHealthcare, Anthem Blue Cross, Blue Shield of California, Centene’s Health Net and a few more smaller carriers. The system will remain in network for about 13,000 MA enrollees who receive care through Scripps’ individual physician associations.

“If other organizations are experiencing what we are, it’s going to be a short period of time before they start floundering or they get out of Medicare Advantage,” he said. “I think we will see this trend continue and accelerate unless something changes.”

Bend, Ore.-based St. Charles Health System has taken it a step further and is not only considering dropping all Medicare Advantage plans, but is also encouraging its older patients not to enroll in the private Medicare plans during the upcoming enrollment period in October.

The health system’s president and CEO, CFO and chief clinical officer cited high rates of denials, longer hospital stays and overall administrative burden for clinicians.

“We recognize changing insurance options may create a temporary burden for Central Oregonians who are currently on a Medicare Advantage plan, but we ultimately believe it is the right move for patients and for our health system to be sustainable into the future to encourage patients to move away from Medicare Advantage plans as they currently exist,” St. Charles Health CFO Matt Swafford said.

“I feel terrible for the patients in this situation; it’s the last thing we wanted to do, but it’s just not sustainable with these kinds of losses,” Mr. Van Gorder added. “Patients need to be aware of how this system works. Traditional Medicare is not an issue. With these other models, seniors need to be wary and savvy buyers.”

Here are seven more recent examples of hospitals dropping Medicare Advantage contracts:

1. Adena Regional Medical Center is terminating its contract with Anthem BCBS’ Medicare Advantage and managed Medicaid plans in Ohio, effective Nov. 2. The flagship facility of Chillicothe, Ohio-based Adena Health System said rate negotiations between the organizations “have not been productive,” leading it to terminate its agreement with Anthem, whose parent company is Elevance Health.

2. Since Aug. 1, 11,000 Anthem Medicare Advantage members in Virginia have not had access to Cincinnati-based Bon Secours Mercy facilities. Anthem’s Medicare Advantage members in Ohio and Kentucky will be out of network with a majority of Bon Secours facilities as of Oct. 1.

3. Corvallis, Ore.-based Samaritan Health Services ended its commercial and Medicare Advantage contracts with UnitedHealthcare. The five-hospital, nonprofit health system cited slow “processing of requests and claims” that have made it difficult to provide appropriate care to UnitedHealth’s members, which will be out of network with Samaritan’s hospitals on Jan. 9. Samaritan’s physicians and provider services will be out of network on Nov. 1, 2024.

4. Cameron (Mo.) Regional Medical Center stopped accepting Cigna’s MA plans in 2023 and plans to drop Aetna and Humana in 2024. It plans to continue Medicare Advantage contracts with UnitedHealthcare and BCBS, the St. Joseph News-Press reported in May. Cameron Regional CEO Joe Abrutz previously told the newspaper the decision stemmed from delayed reimbursements.

5. Stillwater (Okla.) Medical Center ended all in-network contracts with Medicare Advantage plans amid financial challenges at the 117-bed hospital. Humana and BCBS of Oklahoma were notified that their MA members would no longer receive in-network coverage after Jan. 1, 2023. The hospital said it made the decision after facing rising operating costs and a 22 percent prior authorization denial rate for Medicare Advantage plans, compared to a 1 percent denial rate for traditional Medicare.

6. Brookings (S.D.) Health System will no longer be in network with any Medicare Advantage plans in 2024, the Brookings Register reported. The 49-bed, municipally owned hospital said the decision was made to protect the financial sustainability of the organization.

7. Louisville, Ky.-based Baptist Health Medical Group went out of network with Humana’s Medicare Advantage and commercial plans on Sept. 22, Fox affiliate WDRB reported.

https://www.beckershospitalreview.com…

Health Reform Essentials in Entertaining 2-Minute Videos

Summary: Dr. Glaucomflecken and John Stewart offer a master class on how to concisely convey what’s wrong with US health insurance and why. A dozen 2-minute videos.

Dr. Glaucomflecken, 30 Days of US Healthcare, September 2023, videos (2 min each)

Job Benefits

Deductibles
Co-insurance
Surprise Billing
Pharmacy Benefit Managers
Insurance Kickbacks [to PBMs]
DIR Fees [PBM fees on pharmacies]
Out of Pocket Maximum

Hospital Price Transparency
Payment Processing Fees
Family Medicine Negotiates with UHC

And … An American Gets Health Care Abroad [2022]

Medicare and Corporate Lobbyists in Congress [600 lobbyists: no drug price negotiations part D], The Problem With Jon Stewart, August 30, 2023

Comment:

By Jim Kahn, M.D., M.P.H.

Health policy discussion is often laden with technical jargon. Dr. Glaucomflecken’s amusing skits (in which he plays all roles), and John Stewart’s interviews provide an excellent antidote – they distill fundamentals into biting 2-minute snippets.

Here’s a quick tour of the story they tell, progressing through the videos …

1) Problems with current insurance.

The health insurance “job benefit” actually lowers salary (the worker is paying!). The insurance seems barely worth it … First comes the deductible … thousands of dollars before coverage kicks in. Followed by co-insurance and surprise billing (incompletely resolved with recent legislation, eg ambulances omitted). Pharmacy benefit managers (owned by insurers) manipulate the drug formulary and payment process to extract profits, including dropping generic drugs in favor of brand name (and overcharging for generics). Finally, you hit the out-of-pocket maximum – but beware non-network and excluded services. No wonder medical debt is sky high.

Hospital price transparency is a farce: ignored and incomprehensible for consumers. Electronic billing (efficient, right?) is an excuse to impose a 5% processing fee on providers.

And, the insurers are buying up the doctors.

2) There’s a better way abroad.

In all other wealthy nations, everyone is covered with little or no cost-sharing. Pick your phrase: not rocket science, known technology, best practices.

3) Why, then?

Because, as Stewart says, health industry lobbyists and the donors who hire them control Congress. See the PBM video too – if you earn enough money, you make the laws. Is the Inflation Reduction Act, which the drug companies so hate, a harbinger of real reform?

It’s time for the people to dismantle the fragmented and dysfunctional system in favor of a simple approach that works for patients – single payer.

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

California Says No to Privatizing Medicare

By Patty Harvey
North Coast Journal (Humboldt County, Calif.), September 21, 2023

On Sept. 7 an unheralded piece of legislation passed 30-6 to put California unequivocally on the side of protecting traditional Medicare.

Assembly Joint Resolution 4 requests President Biden to eliminate Wall Street profiteering from Medicare via a new program, ACO REACH. REACH is an invention by the Center for Medicare and Medicaid Innovation (CMMI) that began this year without any Congressional approval or oversight. Ending this program will not only be a boon to California with its 6.6 million seniors and people with disabilities but to an entire nation that has enjoyed 58 years of traditional Medicare — the public program we all pay into with our taxes.

The acronym ACO REACH (which stands for Accountable Care Organization Realizing Equity and Community Outreach) sounds pleasant but is wholly misleading. It has opened the floodgates to Wall Street plundering by private equity firms, investment bankers and venture capitalists.

Fifty-eight years ago, the idea of Medicare was to remove all cost sharing and provide unencumbered access to health care for seniors and disabled persons. But from the 1970s forward, a healthcare revisionist history has unrolled in pushback against Lyndon Baines Johnson’s successful implementation of the Medicare program.

In 1972, the Nixon administration allowed the insertion of certain middlemen, (Health Maintenance Organizations (or HMOs), into the Medicare payment process. These middlemen, mostly insurance companies, demand profit but have never produced data to indicate they are delivering on promises of lower costs or improved care. In fact, the data indicates just the opposite.

Medicare Advantage (MA), a privatized version of real Medicare, began in 2003 under the Bush Administration and furthers investors’ goals. It allows non-medical middlemen to restrict provider networks, deny medically prescribed care, cherry pick the healthiest enrollees, lemon drop the sickest and up-code health scores to make patients appear sicker in order to game the Medicare Trust Fund. Medicare Advantage plans overcharge Medicare by more than $75 billion per year, and private equity companies reap many billions more.

It comes down to a payment model called capitation. While Medicare pays providers for services actually performed, Medicare Advantage collects a per-person monthly stipend from the Medicare Trust Fund in anticipation of expected — not actual — need. It’s easy to see how making patients appear sicker would jack up that anticipated need and, accordingly, the capitated payment — without oversight to record whether or not that need is addressed.

The REACH payment model creates similar, dangerous incentives to restrict care. Already 2.1 million Americans have been enrolled in ACO REACH without their express knowledge or consent. Here’s how it works: An investor buys into control over hospital and physician groups and all seniors therein are automatically “aligned” into the REACH program. The only way to opt out is to find a new doctor who is not party to the scheme — not an easy proposition in rural areas where physician populations are shrinking.

An important difference between Medicare Advantage and ACO REACH, however, has to do with that powerful profit incentive. REACH physicians become financial risk bearers, meaning they are incentivized to restrict care in order to gain financially — a proposition that undermines doctor-patient trust. More troubling, while Medicare Advantage programs are required to spend 85 percent of monies received from Medicare on patient health, leaving them to keep 15 percent for overhead and profit, ACO REACH programs may keep up to 40 percent of their take while spending only 60 percent on patient care. Compare that to the 2-percent overhead spent by traditional, nonprofit Medicare.

No wonder people are saying Medicare is going broke! Today, as the Health Justice Monitor has observed, “the system has become maddeningly complex, with armies of functionaries working every angle, straddling every ethical line, to unlock a big safe full of money.”

This ongoing privatization has created a $350-billion market that Wall Street and private equity firms are rushing to exploit, undermining Medicare’s solvency and putting crucial decisions about patient care in the hands of private insurers rather than doctors. Further, the Center for Medicare and Medicaid Services has declared its goal for total privatization of Medicare by the year 2030. If this is allowed to happen, Medicare as we have known it will cease to exist as premiums rise and healthcare access is further delayed and denied.

California’s passage of Assembly Joint Resolution 4 is an important step to put the entire nation on alert to this eventuality. The next step will be improving and expanding Medicare into a universal, single-payer, publicly financed healthcare system similar to those in so many other developed nations that value health as a human right available to all.

Please contact your California state senator today and thank them for this final vote (Go to fastdemocracy.com/bill-search/ca/2023-2024/bills/CAB00030603/ to see sponsors). Humboldt’s own California Second District Sen. Mike McGuire is a co-author of the resolution. His office can be reached at (916) 651-4002.

Patty Harvey (she/her) is a co-chair of Health Care for All/Physicians for a National Health Program-Humboldt and a retired professor at College of the Redwoods.

https://www.northcoastjournal.com…

Understanding & Fighting Investor Ownership of Health Care

Summary: Private for-profit ownership of health care is undermining the health care mission, diverting care resources to shareholder bank accounts. Single payer financing is not enough … we need to resist the corporate takeover. Two important webinars are coming up NEXT WEEK. Listen in, and get involved.

Medicare for All Is Not Enough, The Nation, March 31, 2022, by David U. Himmelstein, Steffie Woolhandler, Adam Gaffney, Don McCanne, and John Geyman; covered in HJM here

Dr. Glaucomflecken videos (2 min each):

Comment:

By Don McCanne, M.D.

Single payer financing meets the goal of insuring everyone, funded equitably through progressive taxation. However, it is incapable of controlling the dictates of private ownership with a primary mission of increasing private wealth as opposed to providing the public service of health care for all. Private equity is acquiring not only facilities but also the health care professional groups staffing these facilities. Our article in The Nation summarizes these terrible trends, and Dr. Glaucomflecken distills the problems with his astringent humor. The public service model of single payer cannot work in a system designed to pump up the coffers of billionaires.

Two zoom webinars NEXT WEEK address the hazards of private ownership in health care:

1) The Lancet Webinars: Public policy and health in the USA miniseries: should investors own healthcare?

Tuesday September 26, 2023 2 pm EDT / 11 am PDT
Register here

Four US experts will examine the implications of growing investor ownership of physicians’ practices, hospitals, and other health services in the US, and their consolidation into giant corporate enterprises that dominate insurance and care delivery in many regions of the US. Panelists are luminaries Don Berwick, Rosemary Batt, Steffie Woolhandler, and Claudia Fegan.

2) Health Affairs:  Briefing: How the Ownership and Structure of Health Care Entities Affect Clinicians & Patients

Wednesday September 27, 2023 2 pm EDT / 11 am PDT
Register here

WATCH THE ZOOM MEETINGS AND THEN WORK TOGETHER TO FIGHT THIS PROCESS. WE HAVE TO DO IT. SINGLE PAYER WILL GO NOWHERE IF WE DO NOT ADDRESS THE OWNERSHIP HARM CAUSED BY THE BILLIONAIRES. WE HAVE TO REBUILD THE SYSTEM!

In solidarity and with love,

Don

http://healthjusticemonitor.org…

Stay informed! Subscribe to the McCanne Health Justice Monitor to receive regular policy updates via email, and be sure to follow them on Twitter @HealthJustMon.

Medical debt is one of many ills single-payer health care would heal, proponents tell County Council committee

By Bob Batz Jr.
Pittsburgh Union Progress, September 19, 2023

On Monday night in the Gold Room of the Allegheny County Courthouse, Downtown, County Council’s Health and Human Services Committee hosted a public hearing on the growing national and local problem of medical debt. Participants cited piles of statistics, such as how many American adults — 4 in 10 — are saddled with health care debt. Half are unable to pay an unexpected $500 medical bill. One third say that because they can’t afford it, they or family members have skipped medical or dental care.

But it was the human stories that most moved committee chairman Paul Klein, who represents District 11, and six other councilors who were present (two more joined by phone) and others among the two dozen attendees, including two County Council candidates — Carl Redwood and Sam Schmidt — and Pittsburgh City Councilor Barb Warwick.

Dr. Anthony Fiorillo, who is affiliated with Physicians for a National Health Program, told of a friend who lost his job and so lost health insurance for himself and his family. Knowing any diagnosis and treatment could cost tens of thousands of dollars, he put off treatment for worsening chest pains and wound up dropping dead standing at a sporting goods store checkout with his teenage son. He was 51. “I tell you this story to honor him.”

Another physician, Katherine Neely, told of a patient of hers who had a mail-in test clue that he might have colon cancer, but he was only covered if he had a full colonoscopy, which he decided to not pay for himself. He wound up dying. “That’s what medical debt does to citizens of Allegheny County.”

Now working for a private company that provides emergency care, Neely said she sees people seeking medical care who are blocked at the front desk by outstanding balances and copayments who turn around and walk out. “I have no idea if they’re able to get care somewhere else.”

Speakers repeated each other in citing this country as being the richest and spending more than others on health care, yet having some of the poorest outcomes, notably in maternal and infant mortality. That $4 trillion a year, proponents said, could more than pay for much better health care for everyone, from birth to grave.

“We are spending twice as much per capita as every other industrialized country, yet we trail in outcomes,” said Judith Albert, M.D., a retired obstetrician/gynecologist, co-founder of Physicians for a National Health Program of Western PA and steering committee member of the Western PA Coalition for Single Payer Healthcare.

Her fellow invited speaker Ed Grystar, chair of that coalition and a labor activist, said that what they are asking County Council to do is put a referendum on the ballot for citizens to vote for calling on their congressional leaders to push for national single-payer health care. That has happened recently in other states such as Wisconsin and Illinois.

“People are ready for fundamental change,” he said.

Among stats he cited: In the first six months of 2023, the seven big for-profit insurance companies made $40 billion in profits.

A referendum is different than council’s past resolutions, he said — “one tool to push the issue forward.” In addition, he urged the local leaders to do some research to know the numbers and demographics of county residents — insured, underinsured, uninsured — who have medical debt.

Councilor Liv Bennett of District 13 told everyone that it’s not just the indigent and the homeless, as she’s struggling with medical debt and with getting health care coverage at a new day job. “There is a face to these stories.”

Councilor at Large Bethany Hallam said, “I have lots of medical debt,” and she had questions for speakers who talked about negotiating medical bills down for those who couldn’t pay them.

Invited speaker Claire M. Cohen, M.D., a local child psychiatrist and coalition steering committee member who’s also part of PNHP of Western PA, had mentioned doing that for one of the bills for her adult children that she had to pay.

The hospital where this family member is employed sent her to the emergency room there and billed her for more than Cohen thought the procedure costs. So she negotiated the charge from $4,000 down to $2,000 down to $1,000.

Insurance reps tell her she’s “impassioned,” but she said, “I just get mad.”

Earlier Monday, she said, she spent an hour arguing for a patient who was being cut off from a medication that has kept him stable for five years — the kind of cutoffs she’s seeing more lately. “I just think it’s so wrong and so immoral.”

If the U.S. had a Medicare-for-all system, she said, there would be no need for medical debt relief. “People just get good care when it’s needed at a much lower price.”

Klein from the start acknowledged that the county has no legal authority when it comes to national health care, but at Hallam’s urging, Grystar and other speakers offered tangible acts that could help move the needle, such as urging local nonprofit but hugely valued health care providers to donate meds to county residents. Or COVID-19 tests and testing, as is happening in Philadelphia, to keep transmission and bigger problems in check.

On problem pointed out by Schmidt and others is how many health care workers themselves — 51% of the lowest-paid workers at local health care giant UPMC, she said — owe medical debt to their employers. Such workers shouldn’t have to choose between medical care or food, she said.

In his three-minute slot, Redwood said, “I think it is important that we become activist Allegheny County, activist Pittsburgh.”

Warwick noted City Council passage of her colleague Bobby’s Wilson’s bill to buy up $1 million dollars’ worth of city residents’ medical debt for pennies on the dollar and told her county counterparts, “Hopefully we can work together at tackling this problem.”

Klein closed by telling attendees, “We certainly will take this to heart.”

The meeting was livestreamed and a recording is posted online.

https://unionprogress.com…

Kudos to Maine Medical Association’s call for reform

The health policy statement – in favor of universal care – shows that the group recognizes the need to put patients’ and caregivers’ interests first.

By Philip Caper, M.D.
Portland (Maine) Press Herald, September 17, 2023

The Maine Medical Association is to be commended for its newly developed health policy statement, unveiled recently at its annual meeting in Portland (“Maine Medical Association says U.S. health care system needs an overhaul,” Sept. 13). It is the most detailed and comprehensive health policy statement issued by any state medical society in the U.S. It recommended fundamental reform of our existing complicated, fragmented and balkanized system by replacing it with a new comprehensive, simplified and adequately funded national or statewide system, covering all Mainers.

The MMA statement is the product of a nearly two-year effort by a 20-member ad hoc committee. It has been vetted by the MMA Board of Directors and is strongly supported by the recent meeting of the general membership of the association.

I understand that not all of my fellow members of the MMA are enthusiastic about this statement and its proposal for a major overhaul of the health care system – fearing it could disrupt their current business models. But that’s really the whole point of reform. They need to adapt their business model to the needs of patients and caregivers.

Sometimes, fundamental change is necessary to serve the public interest. Such change may require disruption and adaptation. In such times, we must follow our oath as physicians to “put the patient first” and “first do no harm” (including economic harm) ahead of all other considerations. That is the best way to continue to earn the high level of status and public trust we enjoy as physicians.

Medicare for all is the best way to achieve those goals.

https://pressherald.com…