Medicare Advantage Insurance Denial
When Americans sign up for Medicare, they can opt for original Medicare or Medicare Advantage. Medicare Advantage (MA) is offered from a private health insurance company. This coverage typically includes Medicare Part A, Part B, and often Part D as well as other benefits. In 2022, Medicare Advantage plans account for 48% of eligible Medicare recipients. And Medicare Advantage participation is projected to reach 61% by 2032. This page reviews Medicare Advantage plans, the largest private health insurers offering MA plans, how to select a MA plan, and recent issues with these plans. We discuss what to do if you receive a Medicare Advantage health insurance denial. If you receive a Medicare Advantage insurance denial, contact the Law offices of Scott Glovsky. We’ve been helping Medicare Advantage policyholders get the care they need for over 20 years.
What is Medicare?
Medicare is the federal health insurance plan for Americans 65+. Medicare also covers some younger disabled individuals as well as those with End-Stage Renal Disease. In 2022, over 58 million people are Medicare recipients. When you become eligible, you have choices. You can sign up for original Medicare that includes Part A (hospital insurance) and Part B (medical insurance). Original Medicare is sometimes called, “fee for service.” In addition, you may sign up for Medicare Pard D (drug insurance) and Medigap (Medicare Supplement Insurance). Instead of selecting original Medicare, however, you can also enroll in a Medicare Advantage plan. You have the same protections and rights in original Medicare and Medicare Advantage plans.
What is Medicare Advantage and Why Would There Be a Medicare Advantage Health Insurance Denial?
Medicare Advantage plans are also known as Medicare Part C or MA plans. These plans offer Medicare-approved private company health insurance. These private health insurers include companies like Blue Shield, Anthem Blue Cross, UnitedHealthcare, Cigna, and others). Medicare Advantage private insurance companies must comply with Medicare rules. MA plans include Medicare Part A, Part B, and Part D. Medicare Advantage plans get a certain amount from Medicare each month. Like other private company health insurance plans, MA members must adhere to the insurer’s policies. For example, you utilize the insurer’s network approved healthcare providers and adhere to its out-of-pocket expense rules. Sometimes you need prior authorization prior to coverage of treatments or medications. Some plans have lower out-of-pocket expenses than original Medicare and some offer coverage not included in Medicare. As an example, some MA plans offer dental, hearing and vision services.
Keep in mind that if you select a MA plan, you still have Medicare. However, you’ll receive most of your Part A and Part B coverage from your MA plan instead of from original Medicare.
Why Do Health Insurance Companies Offer Medicare Advantage Plans?
Medicare Advantage is a lucrative market for health insurance companies. In fact, in 2021, Medicare Advantage insurers reported much higher gross margins per enrollee ($1,730) than the individual non-employer market ($745), the group employer market ($689), and the Medicaid managed care market ($768).
What Types of Medicare Advantage Plans Can I Choose From?
Like commercial health insurance plans, you have options. You can select a Health Maintenance Organization (HMO) plan or a Preferred Provider Organization (PPO) plan. Options also include a Private Fee-For-Service (PFFS) plan or a Special Needs Plan (SNP). A few other less common plans include a HMO Point of Service (HMOPOS) plan and a Medicare Medical Savings Account (MSA) plan. You can learn more about some of these types of plans here.
Who Can Sign Up for a Medicare Advantage Plan?
You are eligible if you have original Medicare. Of course you must be a U.S. citizen, aged 65 or older, and so on as explained above. And you must have Medicare Part A and Part B. However, to join a MA plan, you must live in an area covered by the specific plan you select.
Is Medicare Advantage More Expensive than Medicare?
Costs are different and vary depending on the specific Medicare Advantage plan selected. Original Medicare stipulates that after you meet your deductible for Medicare Part B (medical), you typically pay 20% of the approved Medicare amount. You also pay a monthly premium for Part B and a different premium for Part D (prescriptions). Plus, there is not an annual limit on out-of-pocket expenses except if you have Medigap. For Medicare Advantage plans, however, out-of-pocket costs vary by the specific plan and the service provided. Like original Medicare, you pay a monthly Part B premium that usually includes your Part D coverage. You might also have to pay a monthly plan premium. MA plans do have out-of-pocket limits for both Part A and Part B. And you don’t need to purchase Medigap. For additional differences, go here.
To calculate your out-of-pocket costs with a MA plan, evaluate your premium, deductible, copayments, and coinsurance. Also review what kind of healthcare treatments you need and the frequency that you need them. Review if your provider accepts the Medicare-approved amount for payment. And go here to see other things to evaluate.
Why are Medicare Advantage Programs Growing Vs. Original Medicare?
From 2006 to 2022, Medicare Advantage enrollees increased by 22.2 million while original Medicare declined by 1 million enrollees. In 2022, 49.9% of eligible Medicare enrollees had MA plans. This percent is projected to grow to 61% by 2032. Some people prefer MA plans because they work just like the health insurance plans they had prior to turning 65. They offer integrated and coordinated care. And they enable you to get coverage for many different healthcare services in the same plan. Other individuals prefer MA plans because they have an out-of-pocket limit. As mentioned above, original Medicare only provides this limit if a person also purchases Medigap. Depending on the type of MA plan you select, many of these plans also have smaller monthly premiums. In fact, a 2022 Better Medicine Alliance study found that MA enrollees pay almost $2,000 less in out-of-pocket expenses and premiums than original Medicare participants.
Another study observed that some of the most vulnerable enrollees had better outcomes with MA plans. The most vulnerable includes those most at risk with multiple health conditions, greater disabilities, and other issues. These outcomes included utilization of care, quality of care, lower costs for care, fewer hospitalizations and readmissions, and more. Of course, some MA plans offer additional benefits such as dental, hearing, and vision. In fact, some plans even offer gym discounts or memberships as well as assistance getting to doctor appointments.
MA plan downsides include less flexibility in your healthcare providers. You need prior authorization for some medical services and medications. Also, you might pay more with out-of-pocket costs than people who have both original Medicare and Medigap.
Criticism of Medicare Advantage Plans and Why There Is Medicare Advantage Health Insurance Denial
Medicare Advantage plans are managed by health insurance companies, not by Medicare. With original Medicare, Medicare pays hospitals and doctors according to a fee-for-service model. As such, doctors dictate patient care. With Medicare Advantage plans, Medicare pays MA insurance companies a fixed per-patient dollar amount and pays extra for some patient health concerns. These health concerns like heart disease and diabetes qualify for extra “risk adjustment” dollars. MA insurance companies, not Medicare, dictate patient care. And given the fixed fee, there is an incentive for MA plans to deny care to retain more profits. There is also an incentive to make patients appear sicker than they are (known as excess billing or excess coding) to receive risk adjustment dollars.
Lawsuits against MA insurers for excess billing are common. A few whistleblowers alleged this against UnitedHealthcare in 2017. The DOJ alleged something similar and filed a lawsuit against Cigna in 2020. As of September 2022, the DOJ 2020 lawsuit against Anthem alleging potentially tens of millions of dollars in fraudulent claims is set to go to trial. In fact, of the 10 largest MA health insurers, 5 have been accused of fraud by whistleblowers, 5 have been accused of fraud by the government, 8 have been accused of overbilling by the Inspector General, and 3 overbilled and have been accused by both whistleblowers and the government. The government watchdog MedPac claims that MA plan excess billing in 2020 was $12 billion. And a former government health official suggests 2020 MA excess billing was actually $25 billion.
In January 2023, CMS announced plans to take back billions of dollars of overpayments to Medicare Advantage health insurers going back to 2018. Regulators will apply an error rate extrapolated from audits conducted to the remainder of the insurer’s MA plans. CMS decided not to take back overpayments from 2011 to 2017, saving insurers billions of dollars.
In March 2022, the Medicare advisory commission presented Congress and HHS with recommendations to help repair the “deeply flawed” MA payment rules. The suggestions include creating more suitable benchmarks to define plan payments, changing the quality bonus program, and fixing the excess coding issue that drives incentives for additional diagnoses and thus risk adjustment payments.
An article in October 2022 pointed out that Medicare Advantage plans were sending patients home from skilled nursing and rehabilitation facilities before they were sufficiently healthy. And in March 2023, a Stat investigation revealed that MA health insurers were using unregulated artificial intelligence predictive algorithms to determine when to send patients home and were doing so too early. Advocates for patients said these algorithms, implemented at the beginning of the care process, don’t adjust for individual patient circumstances and can be different than what Medicare routinely covers. As mentioned previously, original Medicare and MA plans cover the same minimum benefits. These benefits include up to 100 days in these facilities. Healthcare providers, patient advocates and nursing home representatives claim that MA plans are increasingly not abiding by these rules.
Another criticism is denying medically necessary care. We review Medicare Advantage Health Insurance Denials below.
What Private Insurance Companies Offer Medicare Advantage Plans?
In 2022, the average Medicare recipient can select from 39 different Medicare Advantage programs. In 2016, the number of accessible MA plans was only 19. Of course, some people can select from even more MA plans. For example, Los Angeles Medicare participants can choose from 71 plans and Orange, CA recipients can select from 69 plans. And across all types of MA plans, there are over 3,800 specific plans available. Plan types split by HMOs (59%), PPOs (37%), and others.
In terms of specific health insurers offering MA plans, Humana and UnitedHealthcare offer plans in 68% of counties. There are 28.4 million Medicare Advantage enrollees in 2022. Enrollment in 2022 by health insurer is as follows: UnitedHealthcare (28%), Humana (18%), and Blue Cross Blue Shield (14%). CVS Health has 11% of enrollees, Kaiser has 6%, Centene (Health Net) has 5%, and Cigna has 2%. All other health insurers comprise the remaining 16% of enrollees.
Based on the numbers above, the top two health insurers UnitedHealthcare and Humans represent 46% of all MA enrollees. In fact, in 29% of counties, UnitedHealthcare and Humana account for 75% of MA enrollees.
How Do I Select a Medicare Advantage Plan?
With so many MA plans available, choosing the ideal one can be complex and confusing. Medicare publishes a five-star rating system based on over 40 metrics and publishes it on the Medicare Plan Finder website. The score includes a lot of things such as responsiveness to appeals and participant ratings. Other criteria include access to services and medications as well as customer service. The website asks a series of questions and then gives you plan options with the plan’s composite score. The number of five-star MA contracts moved form 74 in 2022 to 57 in 2023. When reviewing ratings, compare the average star rating to plans you review. Also evaluate the specific metrics that are most important to you.
But the ratings don’t tell the entire story for participants who experienced Medicare Advantage health insurance denials. Concerns include the fact that MA health insurers can combine quality scores of plans in different states for different types of enrollees. The ratings mostly highlight treatments as opposed to treatment outcomes. And the Medicare Plan Finder website is difficult to navigate due to the number of decisions required. Decisions include plan type, premium amount, copayments and other parameters.
Find free resources here for selecting Medicare Advantage (and Medicare) plans.
Should I Select a Medicare Advantage Plan Based on Its Cost?
Today, enrollees look to premium cost twice as strongly as quality ratings. But an August 2022 RAND study found that more expensive Medicare Advantage plans don’t equate to better care. The study looked at $0 monthly premium plans as well as plans with $60-$120+ monthly premiums. Researchers found insignificant differences in patients’ experience scores based on monthly premiums. The study suggests that enrollees should evaluate other factors including star ratings.
Oftentimes, people associate higher monthly premiums with lower out-of-pocket costs. But this association is different with MA plans due to the Quality Bonus Program (QBP). In this program, the past highest performing plans receive 5% bonuses to either lower enrollee monthly premiums or to provide more enrollee benefits. And QBP bonuses are substantial – 2022 bonuses are estimated at $10 billion. In fact, they are so substantial that in October 2022, some financial analysts project that specific MA health insurers such as Centene and CVS Health’s Aetena that are set to lose bonuses in 2023 might see as much as a 10% drop in their earnings outlook. 75% of MA participants are enrolled in plans that receive bonus money. Bonuses that lower premiums change the relationship between pricing and quality.
Another Reason Not To Select a Medicare Advantage Plan Based on Cost
Another report from the Brookings Institution suggested that the five largest MA health insurers – UnitedHealthcare, Humana, Elevance (Anthem), Aetna and Kaiser – may disguise profits as costs. How? By doing so with their related businesses that aren’t regulated by Medical Loss Ratios (MLR). These insurers all own related businesses including Pharmacy Benefit Managers, physician practices, hospitals and post-acute healthcare providers. And spending on the related businesses may reach 70%. The ACA sets the minimum MLR at 80%. (MLR rates vary by plan type.) So, 80% of all premium revenue must be spent on medical care and quality improvements vs. marketing, profits and operations. Prices charged from related businesses to MA insurance plans substantially impact costs and profits. As such, health insurers may move profits to where they are not regulated by MLR. The report focused on the ability to do so, not on insurer current practices.
Are There High Medicare Advantage Insurance Denials?
Like other health insurance plans, Medicare Advantage Health insurance denials are not uncommon. And sometimes they are mistakes. A report from HHS’ Office of Inspector General showed that MA and Medicare Part D enrollees encounter a considerable number of incorrect denials. These denials may prevent or delay medically necessary care. Specifically, among MA prior authorization denials, 13% met Original Medicare coverage rules. Why were these requests denied? MA plans used criteria outside of Medicare’s criteria. MA plans requested unnecessary documentation. And MA plans made system and manual review errors. Denial examples included MRIs, injections, and enrollee stays in facilities such as rehabilitation facilities. The OIG also showed that among payment denials, 18% met Medicare coverage rules and MA billing rules. Most occurred due to human errors in manual claims processing reviews and due to system processing errors.
Unfortunately, only 1% of MA participants appeal these denials even though up to 75% of appealed denials are overturned. The percent of people who appeal is likely small because the appeals process is complex, time consuming, and hard to understand.
What Should I Do if I Receive a Medicare Advantage Insurance Denial?
As with private commercial insurance plans, you can appeal. Regardless of the type of MA plan you have, we recommend that you speak with a qualified health insurance attorney prior to filing your appeal. Why? Because this attorney can help optimize your chances of overturning the Medicare Advantage Health Insurance Denial.
You must always go through the Medicare appeals process. Even prior to appealing, however, the initial step is to request an “Organization Determination.” You, your representative, or your doctor can request the OD. This determination is essentially a request for the plan to cover or pay for your medical care. Your Medicare Advantage plan provides you information on how to make this request. If your MA plan denies your request, it will explain why in writing. The communication also tells you how to appeal.
Five Levels of Medicare Advantage Appeals: Levels 1 – 2
The appeals process for Medicare Advantage Health Insurance Denials has five levels. Each level’s decision tells you how to appeal in the next level. Learn more about what to include in your appeal here.
Appeal Level 1: You request a Reconsideration of the Organization Determination from your insurance plan. You have 60 days from the OD denial date to request a reconsideration. Then your MA plan has 72 hours to respond to an expedited care request and 30 days for a standard request. The plan can take 60 days to respond to a payment request.
Appeal Level 2: If MA denies your Reconsideration appeal, your case is automatically sent to the second level, an Independent Review Entity (IRE). (Some IREs refer to themselves as “Part C Qualified Independent Contractors” or QICs.) Then you have ten days to send the IRE information about your situation. And just like the Reconsideration first level, the IRE has the same timeframe to respond to your appeal. If the IRE denies your appeal, you must request your case be sent to the next level within 60 days. The Medicare Reconsideration Notice from the QIC provides instructions on how to do so. The next level is a decision from the Office of Medicare Hearings and Appeals (OMHA).
Five Levels of Medicare Advantage Appeals: Levels 3 – 5
Appeal Level 3: In the OMHA level, you request a decision based on a hearing with an Administrative Law Judge (ALJ) or an attorney adjudicator. Your case must have a value of $180 or more in 2022 to get a hearing. This judge reviews your case and your testimony prior to deciding. The hearing may be over the phone, via video-teleconference or in person. And a hearing isn’t necessary if the ALJ or adjudicator decides to overturn the prior denial. However, if OMHA overturns the denial, your MA health plan may appeal its decision. It appeals by requesting a Medicare Appeals Council (Appeals Council) review. Also, if OHMA doesn’t provide you a decision in the allowed timeframe, you can request OHMA to send your case to the next appeal level. If OHMA doesn’t overturn the denial, you have 60 days to ask for a Medical Appeals Council review.
Appeal Level 4: You can request that the Medicare Appeals Council review your case following instructions from the ALJ’s hearing decision. If the Appeals Council doesn’t provide a determination in the allotted timeframe, you can request that your case be moved to Level 5. You have 60 days to request a judicial review by a federal district court if the Appeals Council doesn’t overturn your denial.
Appeal Level 5: In 2022, your case must be valued at no less than $1,760 to receive a federal district court judicial review.
Contact Law Offices of Scott Glovsky if You Receive a Medicare Advantage Health Insurance Denial
The California-based Law Offices of Scott Glovsky has been helping health insurance policyholders for more than twenty years. Scott Glovsky is recognized as one of the most experienced, well-respected, and compassionate insurance lawyers in the nation. We understand a Medicare Advantage Health Insurance Denial and have helped many patients get the care they need. Results of our cases have impacted millions of California insurance policyholders by forcing insurance companies to change their behavior.