Medicare Advantage Issues Making Headlines

Medicare Advantage plans are being buffeted by bad news and regulatory challenges.

Last week produced a lot of Medicare Advantage (MA) news. Retired municipal workers of New York City are up in arms, as they are being forced to switch to a MA plan or pay an extra $191 a month to stay with traditional Medicare. Reports initially noted that many of these retirees who have been receiving care at prestigious places like Memorial Sloan Kettering (MSK) are now being told their care will not be covered, since that system is out-of-network. Other reports suggest that the retirees can see any medical provider that accepts Medicare, including MSK, as this MA plan was specially designed to allow payments to out-of-network providers at Medicare rates. The NYC teacher’s union has even established special web pages to try to sort out the confusion.

There was also word that Mayo Clinic will no longer see patients who are covered by a MA plan that is out-of-network, most notably UnitedHealthcare (UHC), which also happens to be based in Minnesota. Mayo Clinic is well-known for accepting patients from around the world for care, especially for patients with rare or difficult-to-treat illnesses, and the loss of access for these MA patients is unlikely to be readily accepted. And finally, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) released another audit of an MA plan’s HCC coding that had a 73 percent error rate. The week was not kind to MA plans.

Hospices were also in the news last week, and not in a good way. An OIG report looked at 10 years of claims and found some disturbing numbers. They noted a very large increase in the number of for-profit facilities, but what seemed to concern the OIG the most was the increase in Part B spending on patients enrolled with for-profit hospices for Part b services and durable medical equipment (DME) that were carved out of the hospice benefit, because the services were reported as unrelated to the patient’s terminal illness. The OIG promised more audits to come.

As we have seen with many areas that are selected for audit, it is difficult to know which issue came first. In this case, were the nonprofit hospices less familiar with the billing rules for unrelated services and underused them, but now the for-profit hospices are billing correctly, making the pattern appear suspicious, or is there truly misuse? Data patterns cannot answer that question; charts must be reviewed.  

Finally, there was an interesting case posted on one of the user groups I follow. The case management director posted that “We are having challenges with one insurer, not UHC, that denies every inpatient stay if the patient is here for less than three midnights. Example: a patient [was] admitted for respiratory failure with hypoxia and placed on BiPAP. We discharged her on day three. Peer-to-peer [contact] attempted, but the payer medical director will not even discuss the case, citing their short-stay policy.”

Amazingly, that payer’s policy is online, and it states that “It is our policy that inpatient hospital stays on day three and beyond are medically necessary when supported by nationally recognized clinical decision support tools. The only exceptions are inpatient-only surgeries, patients admitted to an intensive care unit who met criteria for ICU admission, and patients whose length of stay was shorter because they died, were transferred, or left AMA, as long as they met inpatient criteria during their hospital stay.”

So, what happened here? Well, this hospital has a contract with this payer, and the contract holds them to the plan’s published policies. The hospital leadership signed the contract, so everyone has to abide by it. It doesn’t seem rational to have a patient in observation for three days, but as long as the patient is getting the necessary medical care, the issue really is about the payment.

It occurs way too frequently that such clauses get overlooked in contract negotiations, which often concentrate on payment rates, without realizing that the excellent negotiated rate may never get paid, since other clauses prohibit submitting such a claim.

Programming Note: Listen to Dr. Ronald Hirsch every Monday on Monitor Mondays as he makes his Monday rounds, sponsored by R1 RCM.

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