An informal phone survey of Utah nursing homes and home health agencies reveals that a large number of new Medicare Advantage insurance claims are paying for significantly fewer days of care than original Medicare would normally pay. In some cases these plans could be paying as little as 20% of the normal Medicare benefit.
Respondents admit some insurers are paying the proper Medicare amount but the majority of claims are deficient. This flaw in coverage seemed to be true with private fee for service plans as well as managed plans. We also learned this problem is not just in Utah but is being experienced nationwide.
A number of surveyed care providers expressed concern that many patients under Medicare Advantage were being released from treatment far too early and might be at risk for serious falls or from infection from wounds that were not yet healed. Others felt that Advantage plans were not in the long run saving money by restricting payment for nursing or home care because patients who are not fully recovered would probably end up back in the health-care system with emergency room visits or new hospital stays.
Many of the respondents felt the decision by Advantage insurers to deny further days of care seemed to be based entirely on avoiding any more expense and appeared to have no relationship to the medical needs of the patient.
Medicare Advantage plans were created along with the Medicare drug benefit as a result of the 2003 Medicare Modernization Act. The plans are funded by Medicare but design and administration are carried out by private-sector insurers. An Advantage plan must offer at least the same benefits of original Medicare but may offer better benefits as well. MA plans are designed around provisions of modern group insurance coverage and these plans do away with the gaps in coverage with original Medicare. Many of these plans are integrated with the new Medicare drug benefit as well.
Because of the modern design, there is no need for a Medicare supplement (Medigap) policy and the additional cost of the supplement is eliminated. The trade-off for this improvement is generally more direct out-of-pocket costs for MA beneficiaries. Eligible Medicare beneficiaries typically enroll with an MA by signing on with a designated agent of the insurer.
Almost all of the surveyed nursing facilities and home care providers indicated they were advising their patients or the family caregivers to go back to original Medicare where beneficiaries would receive more treatment. Unfortunately, this would only be for future claims since care received under an MA would have to be paid under that plan.
Also in many cases when care recipients were told they were not going to receive the type of care they would normally receive under original Medicare or they might have to pay more out-of-pocket, they were surprised they had a different plan. It seems many of them had signed up for the Medicare drug benefit and in the process had been enrolled in a Medicare Advantage plan as well. Survey respondents relate these MA beneficiaries claim they were not aware of this change in their coverage.
Dan Hull, director of the Utah Home Care Association, explains this flaw in Medicare Advantage coverage is well known to his industry and is not just restricted to Utah. It is a problem for home health care across the country. He says he recently attended a conference in Las Vegas where this issue was discussed. One speaker estimated it would take the payments on five Medicare Advantage patients to equal the payments from one original Medicare patient. Or in other words, according to Mr. Hull, Medicare Advantage was only paying about 20% of the number of home health visits original Medicare would normally pay for.
"The home health care delivery system was developed over many years with cooperation between Medicare and home health agencies to provide the appropriate level of care." says Hull. "It makes no sense for insurance companies to come in and completely destroy something that works so well and in the process jeopardize the recovery of our patients." he continues.
We attempted to get input from the American Health Care Association and the Utah Health Care Association about this problem. These organizations represent nursing homes respectively across the country and in Utah. Neither organization had received much input from their members but they were aware there were some problems with MA plans. It had been a topic of discussion for the UHCA board meeting for July.
Because Advantage is so new, there are probably too few MA claims for skilled nursing, at this point, for these associations to take notice. But, based on phone conversations, the local nursing homes definitely are alarmed by what has come in so for.
Anyone under Medicare Advantage can switch back to original Medicare before the end of this year. Beginning in 2007 there is only a three month window each year between January 1 and March 31 to go back to original Medicare. Medicare requires a release from the insuring company before accepting back someone from an MA plan. The MA plan will require either a phone call or more likely a written request before releasing coverage.