MA plans fail to deliver better health
Studies show little difference in patient satisfaction or outcomes compared to traditional fee-for-service Medicare
I was glad to see the Sunday New York Times give frontpage coverage to how private insurers’ Medicare Advantage plans continue to bilk the government by culling their members’ medical records for untreated diseases. As I noted in this space last spring, continued overpayments to MA plans threaten to undermine the financing of the entire program.
“Eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits,” the Times reported. “And four of the five largest players — UnitedHealth, Humana, Elevance (formerly Anthem) and Kaiser — have faced federal lawsuits alleging that efforts to overdiagnose their customers crossed the line into fraud. The fifth company, CVS Health, which owns Aetna, told investors its practices were being investigated by the Department of Justice.”
None of this legal wrangling has put a dent in the health insurance industry’s profitability. It now generates as much or more profit from Medicare Advantage than any other line of business.
It's too bad the paper-of-record’s renewed interest in this ongoing scandal (the first major media report dates from 2014) did not focus on the next obvious question: What are seniors in MA plans getting for the tens of billions of extra dollars private insurers collect each year by this subterfuge? Is the quality of care better than traditional Medicare? Are patients more satisfied? Do they stick with MA when they get very sick?
It’s a timely set of questions since open enrollment for Medicare starts later this week and seniors across America will once again see Joe Namath’s face plastered across their television screens touting the extra benefits some seniors may get when they join an MA plan. (I use the words “some” and “may” deliberately because we have very little data on the actual use of the vision, hearing aid or other extra benefits offered by the plans.) Enrollment in MA is expected to soar above 50 percent of all beneficiaries next year.
Fortunately, there have been several recent comprehensive reviews of scores of peer-reviewed medical studies that evaluated the performance of MA plans compared to traditional fee-for-service Medicare. The short answer given by those reviews is that there is no discernible difference in the medical outcomes between the two approaches. And on several key questions, there is evidence to suggest seniors with serious and expensive medical conditions may face roadblocks to the best care if they remain in an MA plan.
In other words, the heavily advertised claim by the Better Medicare Alliance, the MA insurers’ advocacy arm, that the private sector is achieving better outcomes than the government-run program is bogus. It is based entirely on a handful of cherry-picked performance indicators which may or may not lead to better outcomes.
What are the outcomes?
Let’s start by giving credit where credit is due. MA plans outperform traditional Medicare on use of preventive services like annual wellness visits, cancer screenings and flu vaccines. MA beneficiaries have better access to a usual source of care (a primary care physician); and they have lower hospital readmission rates (returning to the hospital within 30 days of a prior admission for the same condition), according to a Kaiser Family Foundation analysis of 62 comparison studies released last month. The differences in most cases were small, but statistically significant. Those findings were similar to the review of 45 studies that was published in Health Affairs a year earlier with one exception – the earlier review found no difference in readmission rates.
On the other hand, the KFF review found traditional Medicare outperformed MA on access to high-rated cancer care centers and access to high-quality nursing homes and home health agencies. This suggests the narrow networks associated with many MA plans do not include many of the better treatment centers across the U.S.
This may help explain why more people ditch their MA plans and switch to traditional Medicare than go the other way, according to the KFF review. While switching rates overall are low, beneficiaries of color, those in rural areas, and those who get seriously ill are most likely to drop MA, “which may be a proxy for dissatisfaction with current coverage arrangements.”
Meanwhile, MA enrollees are experiencing more problems meeting co-pays and deductibles when they become ill. This is largely due to the fact 84 percent of seniors in traditional Medicare carry some form of supplemental insurance, either self-purchased, provided by a former employer or by Medicaid (in the case of poor seniors eligible for both programs). Many low- and moderate-income retirees choose MA plans because they offer no upfront premiums. Few pay attention to the co-pays they will be charged when they need medical services.
When it comes to actual outcomes like mortality or hospitalization results, though, there is very little evidence in the medical literature to make a judgment about the relative performance of MA and traditional Medicare. The 2021 Health Affairs review found three studies that compared mortality rates: One showed MA beneficiaries were less likely to die than predicted had they remained in traditional Medicare; one showed that advantage disappeared after five years, indicating MA beneficiaries became sicker than people in traditional Medicare over time; and the third showed no difference in mortality at all.
The paucity of studies on actual outcomes is due largely to the fact MA plans have never provided the Centers for Medicare and Medicaid Services (CMS) with adequate encounter data that includes usage rates, services delivered and outcomes for their enrollees. In 2019, the Medicare Payment Advisory Commission recommended CMS force MA insurers to submit that data, which would give the agency an alternative for determining future risk adjustment payments instead of relying on the plans culling patient records and reporting untreated medical conditions.
Falling stars
Of course, none of these studies and deep-in-the-weeds policy debates will have much impact on seniors who are about to go through open enrollment season. Many will rely on, instead, on the star ratings that Medicare gives to each plan based on a host of quality and patient satisfaction performance indicators.
And what they’ll find this year when they turn to those ratings is that there was a sharp decline in plan performance. Only half of the more than 500 plans rated by CMS earned four- or five-star ratings for next year, down from 70 percent of plans with high ratings in the 2022 plan year. A plan earns bonus payments from CMS for high ratings, which, in addition to upcoding, accounts for MA plans costing more than traditional FFS Medicare.
Private insurers blamed the ratings drop on CMS doubling the weight it gives patient satisfaction surveys and its reversion to the pre-pandemic system for determining patient satisfaction. As part of the emergency measures adopted early in the pandemic, plans were allowed to use either their latest results from patient satisfaction surveys or those that were in place for 2019, the year before the pandemic, whichever was higher. Now, they must return to using current patient surveys.
The plans are hoping to roll back that change. “We look forward to engaging with CMS to address methodological and other issues to ensure that there are accurate, reliable indicators of plan performance,” AHIP President and CEO Matt Eyles said in a statement to Modern Healthcare.
As the Times reported on Sunday, MA plans have always had friends inside CMS, not to mention the 80 percent of U.S. Congresspersons who signed onto a letter organized by the Better Medicare Alliance in support of the program. Former administrators Andy Slavitt and Marilyn Tavenner, both Obama administration appointees, either came from the insurance industry or went there after their public service. And under President Biden, the Times reported:
Jonathan Blum, the agency’s current chief operating officer, worked for an insurer after leaving the agency in 2014, then became an industry consultant, before returning to Medicare last year.
Ted Doolittle, who served as a senior official for the agency’s Center for Program Integrity from 2011 to 2014, said officials at Medicare seemed uninterested in confronting the industry over these practices. “It was clear that there was some resistance coming from inside” the agency, he said. “There was foot dragging.”
Will current CMS administrator Chiquita Brooks-LaSure finally pull the trigger on a proposed rule that would force plans to pay back the government for MA plan payments inflated by medical records searches? “We are committed to making sure that Medicare dollars are used efficiently and effectively in Medicare Advantage,” she said in a prepared statement.