A tale of two hearings

The one you heard about could save democracy; the other one could save taxpayers billions and maybe even save lives

There were two hearings of significance on Capitol Hill yesterday.

One revealed the 45th president’s personal involvement in the attempted overthrow of the United States government on January 6, 2021. Or, as White House Counsel Pasquale Cipollone told 25-year-old Cassidy Hutchinson, Chief-of-staff Mark Meadows’ chief assistant on that day of infamy: President Donald Trump’s speech urging a mob he knew was armed to march on the Capitol would open the White House to being charged with “every crime imaginable.”

Will Attorney General Merritt Garland act? We’ll see.

The other hearing sought to expose the health insurance industry’s systematic abuse of Medicare, which spent over $900 billion last year providing health care to the nation’s 65 million senior citizens. Systematic overbilling by privatized Medicare Advantage plans, which now control nearly half the program, robs taxpayers of tens of billions of dollars annually, an amount that will grow exponentially in the years ahead unless something is done to rein in their abuse.

Will the Centers for Medicare and Medicaid Services or Congress act? We’ll see.

All of the evidence that was presented in that other hearing came from government agencies: the Office of the Inspector General at the Health and Human Services Department; the Government Accountability Office; and the Medicare Payments Advisory Commission. Sadly, just one reporter saw fit to file a story about the hearing of the House Energy & Commerce Committee’s subcommittee on oversight and investigations. You can read Kaiser Health News reporter Fred Schulte’s report here.

Perhaps that was because there was little new in the testimony, which recapitulated evidence presented in reports issued by the three agencies earlier in the year. To summarize:

• Many of the largest Medicare Advantage insurers, who are paid an annual capped amount for each beneficiary who joins an MA plan, mine medical records and use home visits to document untreated medical conditions (known as upcoding), which then are used to inflate the risk-adjusted amounts paid by Medicare.

• As a result, the MA program has never saved the government money. Each year, the plans cost the government on average 4% more than it would spend if beneficiaries remained in traditional fee-for-service Medicare.

• Beneficiaries in MA plans abandon the program like a COVID-ridden cruise ship when they get very sick, opting back into traditional Medicare in the last year of life at twice the rate of other MA plan members.

• MA plans routinely deny coverage for services covered by Medicare – nearly 10% of all provider claims are denied; that is even higher than the 5% of prior authorization requests denied by MA insurers.

• The quality “star” ratings system used by beneficiaries to evaluate MA plans are about as useful as an empty water bottle on a desert hike. The plans aggregate people from wide geographic areas and use too many invalid measures of quality, such as those that look at processes, not outcomes.

• MA insurers, which are extraordinarily adept at identifying untreated medical conditions, fail to report about one-fifth of all their members’ encounters with the health care system; they report none of their members’ use of the ballyhooed extra benefits like dental and eyeglass coverage. And,

• As a result, CMS cannot analyze differences in the utilization patterns between MA and traditional Medicare; cannot compare outcomes; and cannot use the data to determine if reduced use of providers in MA is due to effective care management (as claimed by insurers) or arbitrary restrictions on utilization.

Source: National Naval Medical Center, Bethesda, MD; courtesy U.S. Navy

The biggest shock

The most shocking thing that came out during the hearing, which was webcast, was CMS’ refusal to testify. Correcting many of these obvious flaws in the program would not require an act of Congress. According to the agencies that testified:

• CMS could prevent upcoding by switching to a system for determining the risk-adjusted annual payment that simply reviewed the past two years of claims data for Medicare beneficiaries switching into a MA plan (or two years of adequately reported encounter data if already in a MA plan).

• CMS could set the maximum amount it pays for any individual patient at 100% of what it pays for a similar patient in the fee-for-service program, with a shared savings program for any amount that an MA plan spends under that amount.

• CMS could issue clear guidance requiring MA plans to scientifically document ahead of time their policies governing utilization, which serve as the basis for claims denials and prior authorization. The same requirement should be applied to step therapy, where insurers prevent use of a more expensive intervention until a cheaper but potentially equally effective intervention has already been used.

• CMS could completely overhaul its MA plan star rating system and design a useful tool for beneficiaries seeking to evaluate the different plans being offered in their areas. And,

• CMS could financially penalize MA insurers who fail to report all their encounter data, including for optional benefits.

“CMS has the authority to implement the recommendations,” said Erin Bliss, assistant inspector general at HHS. “Oversight is important to build momentum for these changes.” “We believe CMS has the statutory authority,” added James Matthews, executive director of MedPAC.

Why CMS needs to act

It’s clear that any changes in the near term has to come from the agency since the Senate, where the filibuster allows the Republican minority to thwart legislation, is unlikely to enact any measure that might curtail the huge profits now flowing to MA insurers. Questions and comments from nearly every Republican House member on the committee, including several physicians, focused solely on prior authorization, which is a thorn in the side of patients and their providers who experiences approval-caused delays in care.

Yet the GOP, where the insurrectionist Trumpist wing is now in control, does not have a coherent position on that issue. Rep. Morgan Griffith (R-VA), the ranking member of the subcommittee, argued “prior authorization can control costs (by) helping to reduce inappropriate service use.” At the same time, Rep. John Joyce (R-Pa.), a dermatologist from Altoona, whose mid-state district went heavily for Trump in the 2016 and 2020 elections, claimed “prior authorization has led to deaths.” When he asked Bliss to confirm his claim, the OIG officer replied, “I have no data.”

Meanwhile, Rep. Cathy Rodgers (R-WA) suggested CMS smooth the prior authorization process by requiring an automatic electronic interface. Rep. Michael Burgess (R-TX), another physician, suggested any doctor who routinely gets their prior authorization requests approved be granted a “gold card” relieving them of insurer oversight.

Ironically, the single prior authorization case included in the OIG’s testimony focused on the denial of a request in an area of medicine that is highly controversial. A provider asked to conduct a computed tomography (CT) scan to exclude the possibility of an aneurysm based on the patient’s symptoms. The MA insurer denied prior authorization, insisting its clinical criteria required the provider conduct a traditional x-ray first “to prove that a CT scan was needed.”

According to the American Association of Neurological Surgeons’ submission to the Choosing Wisely campaign, screening for aneurysms using CT scans or MRIs “may sound like a good idea, but the tests and follow-up can do more harm than good.” Why? Brain aneurysms are rare. Since high-radiation CT scans usually don’t find anything, most patients are exposed to risks without any benefit. Or, in some cases, it may find small, incidental aneurysms that may never be a problem. Finding them leads to additional, unnecessary treatment.

But CT scans may be necessary if you’ve had an aneurysm in the past, or your symptoms (stiff neck, pain in the face, seeing double, vision loss) are severe. In evaluating the patient’s condition, then, there’s a blurry line separating yes or no on whether a CT scan is needed. In this case, the OIG’s physician reviewers thought that was the case; the insurer’s reviewers did not.

Who should be in charge?

The question, then, boils down to whose doctor should make that determination: the insurer’s or the provider’s. Clearly, the insurer has a conflict of interest. By denying the service, it holds down its costs and make more money. But the provider isn’t without its own conflict of interest. The practice or hospital receives about $1,000 for a CT scan, much less for an x-ray.

By giving the MA insurer a capitated amount for each patient, the government has essentially put the insurer in charge. But when the insurer turns around and pays the provider through fee-for-service, it has created an equal and opposite conflict of interest and put the two sides to the transaction in conflict.

For my money (as a taxpayer) and health (as a Medicare beneficiary), I’d rather see the provider in charge. CMS could house both conflicts of interest in the provider organization by giving providers the capitated payments and making those organizations responsible for all the health care of their patients.

This won’t eliminate the blurry line for cases where the decision can go either way. But it will house the competing incentives – do too much and it earns a lot of money; do too little and it could cost lives – in the same organization, one, hopefully, that has the fiduciary responsibilities of its owners counterbalanced by the Hippocratic responsibilities of its learned professionals.