Countering Some Medicare Advantage Falsehoods

 As many of you know from reading my blog posts that I am a huge fan of the MAPD (Medicare Advantage Prescription Drug) plans. I think if the product is platformed off of a PPO type plan which guarantees access to out of network providers, the MAPD plan can run equally up against a Medicare Supplement plan. We are starting to see articles like the one I have posted. I am not sure who is pushing this false line of thinking whether it is government trying to consolidate, the providers who do not like the capitated form of Medicare Reimbursement or the carriers themselves trying to coerce Medicare members into costly Med Supp plans. In any case, I will post this article and as usual my commentary will be in red.

This article comes to us from our friends at Insurance News Net.

Growth in Medicare Advantage will increase risks of lower revenue, Moody’s says

By Press Release

Hospitals will face rising risks to reimbursement, particularly from an uptick in denial of claims, as older Americans increasingly opt for health coverage under Medicare Advantage plans rather than traditional Medicare, a Moody’s Investor Service report said.

Rob Says - Older Americans are being led into the MAPD plans because of the plan descriptions being offered by those carriers. It is the carriers offering $0 monthly premium with $0 copays for the primary, $30 for the specialist and a hospital copay of in many instances $355 a day for the first 5 days capping a hospital exposure to $1775 for the member. I question how a denial of claims can occur from a carrier who set the reimbursement rates and who along with the provider monitor and regulate all in network services and procedures.

Moody’s expects that by 2030, when all baby boomers have turned 65, about 60% of Medicare enrollees will be covered by an MA plan. The shift to MA will increase health care providers' reliance on large commercial insurers, elevating the insurers' influence and negotiating strength. New rules from Centers for Medicare & Medicaid Services have the potential to mitigate some of the challenges posed by MA growth.

Again, if we are talking about an MAPD plan, it is the carriers responsibility to control costs as they are the ones building the capitated networks and negotiating the reimbursement amount for services rendered. The carriers don't get to have it both ways. They don't get to set the rules and then say the rules suck.

• Risks to hospital revenue will rise with MA expansion. MA plans, which are managed by large insurers, present greater challenges to revenue capture than traditional Medicare, as hospitals cite an uptick in claim denials and delays in care authorization. Hospitals with broad scale and more essential roles will be best positioned to counter these issues. However, hospitals of varied sizes and types are terminating MA contracts.
• Hospitals will never fully terminate their contracts with the MAPD carriers. They can't, as the article notes nearly 60% of all medicare recipients will be on some form of MA coverage meaning by terminating contracts, they are reducing their potential patient base by 60%. Do not think that this will force people over to straight Medicare as they understand how Medicare works and they would rather pay $1775 on a hospital bill as opposed to straight Medicare where they are responsible for the first $1632 in the Part A deductible and then 20% of the remaining costs with no maximum out of pocket limit (MOOP). That is a loser for the member. No, they will stay on the MAPD with the MOOP's in place and a $0 monthly premium.
• Declining profitability of MA plans presents an additional threat to hospital revenue. Insurers have begun to see a decline in profitability from MA plans, which have been a valuable source of earnings for them. To help offset lower MA earnings, insurers could, in addition to service denials, turn to reducing costs by restricting provider networks or becoming more aggressive when negotiating MA and commercial rates.
• Wow, no kidding. You can't take a $164 monthly Part B premium and then offer hospital, provider, therapy, Part D, dental, vision, hearing, gym membership and OTC benefits on a $0 monthly premium and think you won't be awash in red ink. How about instead of denying hospital claims, how about cutting back on the extra freebies. Yes, the additional benefits are great. My clients love them (even though Braven had a bit of a tough start with their Smart Card) but if they are causing a plan to lose money and to shirk their fiduciary responsibility in meeting claims then the additional benefits need to be reeled in.
• Hospitals' reliance on the largest insurers will grow, giving insurers greater negotiating power. UnitedHealth, Humana, Aetna and Elevance (formerly Anthem) now cover about 65% of MA patients, in addition to dominating the commercial market. Hospitals will thus become increasingly reliant on these big payers. Payer positioning in contract negotiations will further challenge health care providers, especially in markets dominated by one or two insurers.
• Blame the state insurance departments for this one. The states are mandating high reserves which means only the larger carriers can get in the market. The states are mandating that a carrier authorized to do business has to demonstrate an abnormally high amount of reserves to pay claims before they will be admitted. You can't set the rules to favor the big guys and then whine that only the big guys are in the game.
• New rules from CMS have the potential to alleviate challenges posed by MA.CMS rules implemented in January 2024 seek to ensure that MA plans provide access to care in line with traditional Medicare. If adhered to, the rules would likely alleviate some of the risks to revenue presented by MA expansion, including pre-authorization for treatment and downgrading of admissions to observation stays.
• Most MAPD's are already required to cover the entire schedule of Medicare Mandated Coverages. The risks to revenue for both carrier and provider will be alleviated through annual contract negotiations as they reset and redefine the reimbursement rates for rendered services. The fact is, most MAPD plans already require pre-authorization for services so for many this is a non-starter as it is already part of their current reality. Oh and do NOT expand that silly changing of in-patient admission to observation. That is a colossal failure as the facilities haven't figured out how to keep these patients in a comfortable respectable way. Leaving a patient on a gurney in a hallway is borderline cruel and while the facility may see cost savings, it will surely at some point catch up to them in their star rating as pissed off patients complain. No, the observation idea is one whose time has come and gone.

Sadly, This Is Becoming All Too Common In The Senior Community

 https://www.wtsp.com/article/news/verify/doj-data-breach-greylock-mckinnon-verify/67-4e9a25d9-88a5-43c6-bb69-3c833e5e87ce

This article is about how security breaches and hacking are putting seniors at risk for identity theft.

What I always tell my clients is if it doesn't come from my agency or the insurance carrier, throw the mail away, delete the email without opening or hang up the phone.

In many instances the word used by seniors who have fallen victim to identity theft is they were "confused". It makes sense, we have complicated everything in life. We have brokers who work with General Agencies who work with carriers who farm out work to third party administrators who the sell info out to "partnered vendors". So you have 3 possibly 5 entities that have this seniors Private Identifying Information (PII) and Private Health Information (PHI). This is unacceptable and is the reason why we see so many news articles regarding identity theft or breaching hacks. Too many people have access to this information and considering no system is hack-proof, these people and their information is constantly at risk. 

We live in the computer age, this is how information will be stored and shared. We as brokers and advocates need to ensure our clients have the knowledge to understand how scamming works and how to defend themselves on an initial front line level.

For your elderly family, friends and neighbors:

1. Do Not Take Phone Calls From Unrecognized Sources. Medicare will not call you. A Carrier will rarely contact you and if they do the carrier name will in most instances be on the caller ID.  No "Law Firm Representing CMS" will contact you.  

2. If You Do Not Recognize an Email Address Do Not Open It. Unscrupulous brokers and third party marketing firms will use spam emails to gain permission to solicit and possibly move coverage simply by clicking on a misleading link. Just by clicking on what looks to be a legal, compliant link could destroy your current health coverage without your permission. Clicking on these links could also install malware on your computer which is also a headache to deal with. If you don't know the individual, just send it to the trash bin.

3. If the snail mail is not from your carrier and it it is not the Annual Election Period, throw it away. Filling out forms for prizes or gifts could leave you exposed to authorizing permission to contact or in a worst case scenario authorizing a plan change depending on the time of year and situation (PAAD eligible, etc.). Junk mail goes in the junk file.

If you want to learn more about this subject, drop us a message and we would be delighted to chat with you.

Debunking a Fraudulent Photo/Meme

 Every year during the AEP, I run into a few folks who decide keeping straight Medicare as their only medical coverage is their best option. They will keep their Part A and B and then pick up a standalone prescription drug plan to meet their Part D requirements. It must be working for them as they clearly have not felt enough "pain" to make a move into an alternative form of coverage like Med Supplement or MAPD.

This photo really got my dander up because it is beyond misleading and I know a few of my seniors saw prompting phone calls and explanations. So let's go into this and demonstrate why it is false and misleading.

Medicare Part A has a deductible of $1,632 for 2024 and an 80/20 coinsurance with no maximum out of pocket limit (MOOP)

Medicare Part B has a monthly premium of $174.70, a deductible of $240 and an 80/20 coinsurance with no maximum out of pocket limit.

Medicare Part D has a premium dependent on the plan you choose which can be as low as $0 up to $100. For calculation of establishing the Part D Late Enrollment Penalty, the national average for a Part D plan is $34.

Now that we have some parameters, let's run a scenario to show costs and expenses.

Patient A wakes up in the morning and isn't feeling well and decides to go to the doctor. Since it is the first visit of the year, Patient A is responsible for the first $240 in costs for that visit but the visit only cost $100. The doctor sees that Patient A isn't doing well and sends them to a specialist where the specialist will eat up the rest of the deductible that the primary didn't hit. The bill for the specialist was $160 based on the remaining deductible and 20% due. The specialist decides that Patient A needs to be hospitalized for tests and observation. Patient A is now responsible for the first $1,632 of inpatient charges and then 20% of costs thereafter with no MOOP providing a stopgap. The bill at the end of the 3 day inpatient stay was $100,000. So after deductible and coinsurance are added up, it is $19,673. So let's add it all up to see the exposure.

Part B Premium - $174.70

Part B Deductible - $240

Specialist Coinsurance - $160

Hospital Coinsurance and Deductible - $19,673

Total Amount Due - $20,247.70

So now, let's run that same scenario but factor in the Medicare Advantage Prescription Drug Plan.

Patient A has a PPO MAPD with a zero monthly premium from We Don't Suck Insurance Company.

The plan has a $0 copay for PCP, $30 for the Specialist and a $355 per day for the first 5 days hospital copayment. Because it is a MAPD plan, the prescription drug plan comes as part of the $0 premium plan.

Lets run the numbers

Patient A wakes up in the morning and isn't feeling well and decides to go to the doctor. Since it is the first visit of the year, Patient A is responsible for $0. The doctor sees that Patient A isn't doing well and sends them to a specialist where the specialist will eat up the rest of the deductible that the primary didn't hit. The bill for the specialist was $30. The specialist decides that Patient A needs to be hospitalized for tests and observation. Patient A is now responsible for $355 a day for the first 5 days of admission. The bill at the end of the 3 day inpatient stay was $100,000. So after deductible and coinsurance are added up, it is $19,673. So let's add it all up to see the exposure.

Part B Premium - $174.70

Part B Deductible - $0

Primary Care Physician Copay - $0

Specialist Copay - $30

Hospital Coinsurance and Deductible - $1065

Total Amount Due - $1,269.70

That is a huge difference. Now, the folks on straight Medicare will talk about how they can see whoever they want whenever they want. That is true, no doubt. 

The problem with that thinking is the MAPD member with a PPO plan can see whoever they want, whenever they want with no referrals. Now of course there are limits to that primarily that the provider has to accept Medicare assignment but that would be true for the straight Medicare consumer as well.

The meme that caused this blogpost is old thinking. Yes, 20 years ago when MAPD just had HMO and maybe a POS (Point of Service) plan there may have been network and accessibility issues but companies like Aetna and Braven have figured these issues out and now issue quality plans that provide a rich schedule of benefits with large provider networks and robust formularies for their PDP plans.

Going straight Medicare when your service area has a quality MAPD plan may not be your best play. If you are in New Jersey or Virginia, drop me a message and let me show you how you may be able to keep money in your pocket while not sacrificing coverage benefits.