The Senate Permanent Subcommittee on Investigations recently held a hearing on delays and denials of care in the Medicare Advantage program. In his opening remarks, Senator Richard Blumenthal noted that “we’ve heard from many families who faced denials in the middle of major medical crises, forcing them and their loved ones to fight even as they are fighting for their lives” and that the “fight for insurance coverage is detracting from the fight for their health.” Blumenthal further noted that “perhaps most troubling of all, there is growing evidence that insurance companies are relying on algorithms rather than doctors or other clinicians to make decisions to deny patient care.”
Ranking Member Ron Johnson said that this “is a problem caused by our growing third-party payment system that has largely eliminated the benefits of free market competition and consumerism from health care. Over the last 60 years, patients have been separated from the direct payment for health care products and services, with third parties (government and insurance) taking over the primary role of payer.” He went on to say that in 1960, out of pocket expenses were around 52% of health consumption expenditures while in 2021, out of pocket expenses were about 11%. He noted that “under a third party payment system, everyone wants the best quality treatment and couldn’t care less what it costs,” which is “driving our health care costs through the roof.” He believes the solution is “obvious” – to “reintroduce consumerism and free market competition into health care.”
Megan Tinker, Chief of Staff at the Office of Inspector General Department of Health and Human Services (HHS OIG), testified that Medicare Advantage Organizations (MAOs) “sometimes delayed or denied enrollees’ access to medical services, even though the requested care was medically necessary and met Medicare coverage rules,” and that “these denials likely prevented or delayed needed medical care for enrollees.” Further, MAOs sometimes deny payments to health care providers for services already rendered, even though the requests met Medicare coverage rules, the MAOs own billing rules, and should have been paid by the plan.”
Jean Fuglesten Biniek, Ph.D., Associate Director, Program on Medicare Policy, KFF, noted that MA plans have lower costs for Medicare-covered services than traditional Medicare, in part because they use tools to manage utilization and costs, such as “requiring prior authorization for certain services, requiring referrals for certain types of providers…, denying payment for services not deemed medically necessary, establishing networks…, entering into risk-based contracts that hold providers responsible for cost and quality, and the use of care coordination and care management programs for enrollees with particular conditions.”
Christine J. Huberty, Attorney with the Greater Wisconsin Agency on Aging Resources, Inc., shared several experiences she had with MA plans denying coverage of skilled nursing facility stays, including one case where an elderly mother was recommended to transfer to a skilled nursing facility for rehabilitation following a fall. However, on the seventh day of her stay, her MA plan says it will no longer provide coverage and following unsuccessful appeals, she returns home against her doctors’ orders as she was unable to pay out of pocket for SNF services. After four days back at home, she falls again and the doctor again says she needs to be in a skilled nursing facility, but the MA plan denies the claim while she is still at the hospital (prior to SNF admission). This time, she is approved but again denied after 9 days in the SNF, despite a third fall happening at the SNF. Unfortunately, she returns home again against doctors orders as she cannot afford to pay out of pocket.
Lisa Grabert, Visiting Research Professor at the Marquette University College of Nursing, testified to the “new” regulatory definition of prior authorization finalized by CMS in April 2023. Grabert noted that “given this seismic change in policy, we would expect the landscape of MA prior authorization, after June 4, 2023, to shift” and that it may currently be “premature to pursue additional policy beyond what CMS has recently finalized.” She also provided a detailed timeline of some major milestones in the prior authorization policy in the last five years.
Finally, Ms. Gloria Bent, widow of Gary Bent, a MA enrollee, testified to her and her husband’s experience with the MA “barriers accessing necessary care and treatment.” Her story spanned months of medical diagnoses, doctor recommendations, and appeals with Dr. Bent’s MA plan. She noted that “the reappearance of [Dr. Bent’s] melanoma in May of 2022, a rug was pulled out from under us all, then came the added trauma of having to fight for the care he needed and was entitled to,” concluding that “this should not be happening to patients and their families. It is cruel.”
Letters to MA Program Insurance Participants
Simultaneously, the Committee sent bipartisan letters to UnitedHealth, Humana, and CVS Aetna, seeking additional information to better understand the full extent of overage delays and denials. In the letters, Senators are asking for internal documents to show how decisions are made to grant or deny access to care, including the use of AI in those decisions.