GOA Questions Unexpected Charges to Senior Citizens
by Medicare Advantage Plans
Problems with fee-for-service plans denying charges,
high charge for disenrollment
Dec. 17, 2008 The timing may not be good or
maybe it is but the Government Accountability Office has raised
questions about unexpected costs senior citizens have faced with
Medicare Advantage Programs because of coverage denials and
disenrollment changes. The timing of the report is important because
this is the open enrollment period for Medicare, when seniors can change
the plans they use for service.
The GAOs attention focused primarily on the
problems with the private fee-for-services plans (PFFS). The report
concluded that the Acting Administrator of Centers for Medicare and
Medicaid Services (CMS) should
● investigate the extent to which beneficiaries
in PFFS plans are faced with unexpected out-of-pocket costs due to the
denial of coverage when they did not obtain an advance coverage
determination from their plan.
● ensure that CMS guidance on prior authorization
accurately reflects CMS policy and that PFFS plan materials conform to
CMS requirements.
● mail to Medicare beneficiaries MA plan
disenrollment rates for the previous 2 years for MA plans that are or
will be available in their areas, as required by statute, and update
disenrollment rates provided to Medicare beneficiaries through MOC.
Part B, one of four Medicare parts, covers some
medical expenses not covered by Part A - doctors fees,
outpatient hospital visits, and other medical services and supplies
Lucrative fee-for-service plans are
the fastest-growing segment for private companies contracting with
Medicare, the federal health insurance plan for the 44 million or so
Americans who are disabled or over 65. Unlike some private plans, they
do not require users to use providers inside networks, according to a
report on the study by
Reuters Health.
The GAO report said that Medicare
beneficiaries enrolled in the fee-for-service plans drop out at a
greater rate than those using other private Medicare Advantage plans.
Reuters quoted House Ways and Means
Chairman Charles Rangel as saying, "Beneficiaries need to be warned
about the dangers of enrolling in these plans. Clearly these plans don't
work if you actually get sick and need health care." The New York
Democrat was one of five congressional Democrats requesting the GAO
study.
Below is the GOA Summary Report
and below the report is more information from Medicare about Medicare
Advantage Plans.
Summary Report: Government Accountability Office
Medicare
Advantage: Characteristics, Financial Risks, and Disenrollment Rates of
Beneficiaries in Private Fee-for-Service Plans
Medicare
Advantage (MA) plans are an alternative to the original Medicare
fee-for-service (FFS) program. Private fee-for-service (PFFS) plans--one
type of MA plan--give beneficiaries an option that is more like Medicare
FFS than other MA plans, with a wider choice of providers and less plan
management of services and providers. PFFS enrollment increased from
about 35,000 beneficiaries in June 2004 to about 2.3 million in June
2008.
This report
compares PFFS plans to other MA plans and Medicare FFS in three areas:
(1) characteristics of beneficiaries,
(2) financial risks for beneficiaries who do not contact their plans
before receiving services, and
(3) disenrollment rates.
Health plan costs are going up in 2009 and changing
plans could save big money says Medicare Interactive
Dec. 11, 2008 In the wild rush to the holidays,
senior citizens should not forget that the door is open to make changes
in Medicare health plans or drug plans - until the end of the year.
Read more...
To do this work,
GAO reviewed materials from a selected sample of nine PFFS plan
sponsors, analyzed Medicare data, and interviewed officials from CMS,
which administers the Medicare program, and other organizations.
In April 2007,
beneficiaries in PFFS plans tended to be healthier and generally younger
than beneficiaries in other MA plans and Medicare FFS. Specifically,
projected health care expenditures for PFFS beneficiaries were 7 percent
less than the projected average for beneficiaries in other MA plans and
10 percent less than the projected average for beneficiaries in Medicare
FFS.
Beneficiaries in
PFFS plans also generally were more likely than beneficiaries in other
MA plans and Medicare FFS to reside in rural areas where fewer other MA
plans were available.
In addition,
about 81 percent of beneficiaries who were new enrollees in PFFS plans
were in Medicare FFS before enrolling in their plan, compared to 65
percent in other MA plans.
PFFS
beneficiaries may have faced certain financial risks if they did not
contact their plan before receiving services. These risks were generally
not assumed by beneficiaries in other MA plans and Medicare FFS.
Specifically, if
beneficiaries or their providers did not contact their PFFS plans before
obtaining a service to make sure it would be covered, beneficiaries
unexpectedly may have had to pay for the entire cost of the service if
coverage was later denied by their plan.
CMS officials
told GAO they did not have data on the extent to which PFFS
beneficiaries were faced with such costs. Furthermore, some
beneficiaries likely experienced higher out-of-pocket costs for covered
services if they did not contact their plan before obtaining the
services.
For example, one
sponsor of PFFS plans increased the share of the cost for which
beneficiaries were responsible from 30 percent to 70 percent if the
beneficiaries did not contact the plan before obtaining certain durable
equipment.
GAO found that
some PFFS plans were inappropriately using the term prior authorization,
which can involve denying service coverage if prior plan approval is not
obtained, in their informational materials.
CMS officials
stated that PFFS plans should not have used this term because these
plans were not permitted to deny service coverage due to lack of prior
plan approval. However, CMS guidance on this issue has been inconsistent
and sometimes incorrect.
From January
through April 2007, beneficiaries in PFFS plans disenrolled at an
average rate of 21 percent compared to 9 percent for other MA plans, and
GAO concludes that CMS has not complied with statutory requirements to
mail disenrollment rates to Medicare beneficiaries.
Disenrollment
rates can reflect factors such as beneficiary satisfaction and CMS is
required by law to mail this information to Medicare beneficiaries to
help them compare available MA plans in their area.
Although CMS has
not mailed disenrollment rates to beneficiaries since 2000, the agency
did provide disenrollment rates through Medicare's Web site. However,
this information was based on disenrollment in 2004 and 2005 and, given
the enrollment growth since then, may not accurately reflect plans
available to beneficiaries in 2008.
Recommendations
Our
recommendations from this work are listed below with a Contact for more
information. Status will change from "In process" to "Implemented" or
"Not implemented" based on our follow up work.
James C.
Cosgrove
Government Accountability Office: Health Care
Recommendations
for Executive Action
Recommendation:
The Acting Administrator of Centers for Medicare and Medicaid Services
(CMS) should investigate the extent to which beneficiaries in PFFS plans
are faced with unexpected out-of-pocket costs due to the denial of
coverage when they did not obtain an advance coverage determination from
their plan.
Agency Affected:
Department of Health and Human Services: Centers for Medicare and
Medicaid Services
Status: In
process
Comments: When
we confirm what actions the agency has taken in response to this
recommendation, we will provide updated information.
Recommendation: The Acting Administrator of Centers for Medicare and
Medicaid Services (CMS) should ensure that CMS guidance on prior
authorization accurately reflects CMS policy and that PFFS plan
materials conform to CMS requirements.
Agency Affected:
Department of Health and Human Services: Centers for Medicare and
Medicaid Services
Status: In
process
Comments: When
we confirm what actions the agency has taken in response to this
recommendation, we will provide updated information.
Recommendation:
The Acting Administrator of Centers for Medicare and Medicaid Services
(CMS) should mail to Medicare beneficiaries MA plan disenrollment rates
for the previous 2 years for MA plans that are or will be available in
their areas, as required by statute, and update disenrollment rates
provided to Medicare beneficiaries through MOC.
Agency Affected:
Department of Health and Human Services: Centers for Medicare and
Medicaid Services
Status: In
process
Comments: When
we confirm what actions the agency has taken in response to this
recommendation, we will provide updated information.
Government
Accountability Office Links
Medicare
Advantage: Characteristics, Financial Risks, and Disenrollment Rates of
Beneficiaries in Private Fee-for-Service Plans
My Medicare by Centers for Medicare &
Medicaid Services
Medicare Advantage Plans (Part C)
Medicare Advantage Plans are health plan options
(like an HMO or PPO) approved by Medicare and offered by private
companies. These plans are part of Medicare and are sometimes called
Part C or MA Plans. Medicare pays a fixed amount for your care every
month to the companies offering Medicare Advantage Plans. These
companies must follow rules set by Medicare. Medicare Advantage Plans
provide your Medicare health coverage and usually Medicare drug
coverage. They arent supplemental insurance.
Not all Medicare Advantage Plans work the same way,
so find out the plans rules before joining. See the chart that starts
on page 54 for an outline of these various plans rules. In all plan
types, you are always covered for emergency and urgent care.
Medicare Advantage Plans include the following:
■ Preferred Provider Organization (PPO) Plans.
See page 54.
■ Health Maintenance Organization (HMO) Plans.
See page 54.
■ Private Fee-for-Service (PFFS) Plans. See page
55.
■ Medical Savings Account (MSA) Plans. See page
55.
■ Special Needs Plans (SNP). See page 56.
Note: There are other types of Medicare Advantage
Plans that may be available; however, they are less common. Provider
Sponsored Organizations (PSOs) are plans run by a provider or group of
providers. In a PSO, you usually get your health care from the providers
who are a part of the plan. Religious Fraternal Benefit (RFB) Plans are
offered to members of certain religious groups. RFBs can be any plan
type, including an HMO or PPO.
Medicare Advantage Plans provide all of your Part A
(Hospital Insurance) and Part B (Medical Insurance) coverage. This means
they must cover at least all of the services that Original Medicare
covers. However, each Medicare Advantage Plan can charge different
out‑of‑pocket costs. These are usually copayments but can also be
coinsurance and deductibles. Its important to call any plan before
joining to find out the plans rules, what your costs will be, and to
make sure the plan meets your needs.
Medicare Advantage Plans may offer extra coverage,
such as vision, hearing, dental, and/or health and wellness programs.
Most include Medicare prescription drug coverage (usually for an extra
cost). You may need a referral to see specialists. Some Medicare
Advantage Plans have provider networks. In some cases this means you can
only see doctors who belong to the plan or go to certain hospitals to
get covered services (other than for emergency or urgently needed care
or medically-necessary dialysis).
In some plans, if you see a doctor or other
provider who doesnt contract or participate with the plan, your
services may not be covered at all, or your costs will likely be higher.
You should check with your doctors or hospital to find out if they
accept the plan.
How Do Medicare Advantage Plans Work?
Medicare Advantage Plans can vary. Read individual plan materials
carefully to make sure you understand the plan's rules. You may want to
contact the plan to find out if the service you need is covered and how
much it costs. Visit www.medicare.gov, or call 1-800-MEDICARE
(1-800-633-4227) to find plans in your area. TTY users should call
1-877-486-2048.
Dec. 17, 2008 The timing may not be good or
maybe it is but the Government Accountability Office has raised
questions about unexpected costs senior citizens have faced with
Medicare Advantage Programs because of coverage denials and
disenrollment changes. The timing of the report is important because
this is the open enrollment period for Medicare, when seniors can change
the plans they use for service.
Part B, one of four Medicare parts, covers some
medical expenses not covered by Part A - doctors fees,
outpatient hospital visits, and other medical services and supplies
Three studies in
Health Affairs today question the
benefits for senior citizens from MA Plans
