Medicare Advantage members can lose access to their hospitals, hospital systems and other providers at any time during the year.
Changes in providers during the year are happening more frequently, according to Becker’s Hospital Review, as reported by Thomson Reuters.
Hospital systems and Advantage plan sponsors have been fighting with each other for years over two issues.
One issue is prior authorization.
Hospitals and other medical providers are not assured of receiving payment for procedures and treatment unless they receive prior authorization from the plans.
The hospitals say Advantage plans deny treatment requests too frequently.
One report concluded that Advantage plans deny treatment requests six times more frequently than original Medicare denies claims. (Original Medicare generally does not approve or deny payment until after the services are rendered and a bill is sent to Medicare.)
A health system in Oregon said Medicare Advantage plans denied 22% of prior authorization requests while original Medicare’s denial rate was only 1%.
Medical providers also state that when they expend the time and resources to appeal denials, the appeals usually are successful.
Advantage plans say prior authorization is needed to keep costs reasonable by avoiding unnecessary care.
Medical providers say the success rate of appeals indicates prior authorization is used to delay care and payment. In addition, they report that many patients abandon a treatment plan after receiving the initial denial.
Another issue is that providers say the Advantage plans are slow to pay and sometimes pay less than the amount billed.
Advantage plans say that many hospitals are inefficient, making costs too high.
The result is some major hospital systems no longer accept Advantage plan patients, and the list is growing rapidly.
This year major providers that have eliminated or reduced Advantage plan relationships include the Mayo Clinic, Johns Hopkins and UNC Health, according to Becker’s Hospital Review.
Becker’s said about 25 major health systems have joined the list already this year.
The Advantage plans said that not all the separations were at the initiative of the health systems.
Advantage plans terminated arrangements with health systems because of inefficiencies, high costs or other reasons.
Beneficiaries should know that Medicare Advantage plans can make changes to the provider network at any time during the year.
Yet, a beneficiary can switch Advantage plans or change to original Medicare only during the Annual Enrollment Period from Oct. 15 through Dec. 7 or the Open Enrollment Period from Jan. 1 through March 31.
There is another little-known drawback to Advantage plans.
During a beneficiary’s initial enrollment period, Medicare supplement (or Medigap) insurers must issue the beneficiary a policy without any medical underwriting.
After that, medical underwriting is allowed. A beneficiary can be denied coverage or charged a higher premium after the initial enrollment period. (There are some states that restrict medical underwriting for Medigap plans more than federal law does.)
Sometimes a beneficiary wants to change Medigap policies. Or a beneficiary who initially selected an Advantage plan decides to switch to original Medicare with a Medigap policy.
In either case, medical underwriting could prevent the beneficiary from obtaining an affordable Medigap policy.
But when an Advantage plan is discontinued or is no longer available in a beneficiary’s area, a 63-day guaranteed issue period for Medigap policies opens for the beneficiary.
What is little known is that a change in providers in the Advantage plan’s network is not a plan termination, no matter how significant the provider is.
The change does not trigger a new guaranteed issue period for Medigap policies.
In that situation, a beneficiary who wants to join original Medicare and obtain a Medigap policy is subject to medical underwriting, except for beneficiaries in the few states that limit medical underwriting of Medicare supplement policies.
The bulk of medical expenses are incurred at hospitals. Medicare Advantage plans will continue to try to restrain costs.
These disputes will continue, and changes in provider networks are likely to continue.
