Feldman advises against Medicare Advantage Plans

We’re in the Medicare open enrollment season. I strongly advise patients signing up for Medicare to avoid Part C Medicare Advantage programs (MAPs). Rather, I recommend “traditional” Medicare with a Part B supplemental policy and a Part D prescription plan.

The majority of Medicare patients opt into MAPs, considering them more affordable with lower premiums. They are also enticed by those added benefits like pharmacy, hearing, vision, dental, and gym memberships.

But MAPs may have more co-pays and deductibles and limit patient choice and autonomy. One is generally restricted to their network doctors, hospitals, clinics and pharmacies. In traditional Medicare, there are no provider networks and one is free to obtain care anywhere.

MAPs are notorious for substantial use of prior approval and subsequent denials for medical services. Advanced imaging; costly medications; and admission to facility-based rehabilitation, skilled nursing facilities, and long-term acute care hospitals are examples.

MAPs’ primary goal is profit. The federal government pays more to these plans than it would expend in traditional Medicare costs ($27 billion more in 2023). Nevertheless, Congress anticipated that risk-based contracting with MAPs would result in more cost-effective care and reduced governmental costs. Unfortunately, most cost savings from MAPs are returned to the insurance companies in profits rather than in savings to the government or patients. A big part of “cost-effective care” is denial of services.

My wife has an MAP plan. She recently underwent an extensive orthopedic surgery. She was advised that recovery would take a year. The surgeon wasn’t exaggerating.

Her surgeon assumed insurance would approve a rehabilitation hospital on discharge. The MAP denied it. We alternatively requested rehab in a nursing home. Denied. The MAP said her rehabilitation could be met with a “lesser level of care,” meaning intermittent home physical therapy. Multiple appeals failed.

We opted to self-pay several thousand dollars for the nursing home with physical therapy. The facility’s physician told us that if she had returned directly home from the hospital, it would have been a disaster.

The MAP said she was doing so well with post-op physical therapy in the hospital, that she did not qualify for facility-based rehabilitation. The nursing home physical therapist told us how it really works: Either the patient doesn’t do well enough or does too well to qualify. Either way, care is denied.

The Kaiser Family Foundation issued a recent analysis that found MAPs denied 3.4 million prior authorization requests in 2022 (denial rates do vary among the MAPs). KFF also reports these denials create barriers and delays in care that double the risk for adverse outcomes including life-threatening events, permanent disability, and death.

The Department of Health and Human Services was circumspect that MAP denials are used to increase profits, prompting a 2022 study from its Office of the Inspector General. It commonly found prior-authorization denials for services that would have been covered by traditional Medicare. The report concluded that there were “… widespread and persistent problems related to inappropriate denials of services and provider payments … even though the requests met Medicare coverage and billing rules.”

Congress is considering legislation, and the Centers for Medicare and Medicaid Services passed regulations to contain the out-of-control prior authorization process. What effects they may have are uncertain.

If you have common straight-forward health conditions you may never experience problems with MAPs. But if you ever have an unusual illness or the need for rehabilitation, high-intensity care, or other expensive services, be wary of MAPs.

Richard D. Feldman, M.D. is an Indianapolis family physician and former Indiana State Health Commissioner who served in the administration of Governor Frank O’Bannon.