Medicare Advantage Plans Criticized for Denying Care

Investigation into Medicare Advantage Plans

Recent reports by U.S. investigators have highlighted how Medicare Advantage plans are quick to reject requests for short-term nursing home or inpatient rehabilitation services.

These private healthcare plans, which serve approximately 35 million older Americans under the federal Medicare program, have faced criticism for denying and delaying medically necessary care. Prior investigations have raised similar concerns about the tactics employed by these plans.

Prior authorization is often required by insurers offering Medicare Advantage plans, before agreeing to cover specific treatments. These plans receive a fixed payment for each patient, creating a financial incentive to minimize healthcare expenses. Consequently, they frequently deny expensive specialized inpatient care, like tailored rehabilitation or therapy services, opting to send patients to outpatient facilities or back home instead.

Reports from Ector General Reveal Issues

The inspector general’s office at the Department of Health and Human Services released two reports focusing on major insurers — UnitedHealth Group, Humana, and CVS Health — whose plans cover the majority of Medicare Advantage enrollees. According to the first report, these companies denied roughly 13 percent of patients’ requests to receive care at a skilled nursing facility for recovery from surgery or severe illness.

Concerns were raised about the supervision of outside contractors used by insurers to decide on patients’ eligibility for specialized care.

Rosemary Bartholomew, who spearheaded the government team, emphasized the significant impact of policies by a few large firms on the healthcare of millions. The dominance of a few insurance companies and the use of contractors for processing prior authorization requests reflect this influence on patient care.