[ The simple solution to the Medicare Advantage problem is to kill
off the program. It was just a Trojan horse to privatize Medicare, and
its presence will make Medicare for All even harder to implement.]
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MEDICARE ADVANTAGE IS A FOR-PROFIT SCAM. TIME TO END IT  
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Thom Hartmann
September 8, 2021
Common Dreams
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_ The simple solution to the Medicare Advantage problem is to kill
off the program. It was just a Trojan horse to privatize Medicare, and
its presence will make Medicare for All even harder to implement. _

,

 

OVER 100 DEMOCRATIC LAWMAKERS last week introduced legislation to
lower the Medicare eligibility age to 60
[[link removed]].
There is one small problem that needs fixing, though: so-called
"Medicare Advantage."

This week my new book, The Hidden History of American Healthcare: Why
Sickness Bankrupts You and Makes Others Insanely Rich
[[link removed]] 
[[link removed]]is
officially available in bookstores nationwide and online. Here's a
chapter excerpt I think you'll find interesting, particularly after
all those awful TV ads with former football and sitcom stars we've had
to endure the past few years…

THE "ADVANTAGE" WAR AGAINST MEDICARE

Medicare Advantage is a massive, trillion-dollar rip-off, of the
federal government and of taxpayers, and of many of the people buying
the so-called Advantage plans.

It's also one of the most effective ways that insurance companies
could try to kill Medicare For All, since about a third of all people
who think they're on Medicare are actually on these privatized plans
instead.

Nearly from its beginning, Medicare has allowed private companies to
offer plans that essentially compete with it, but they were an obscure
corner of the market and didn't really take off until the Bush
administration and Republicans in Congress rolled out the Medicare
Modernization Act of 2003. This was the GOP's (and a few corporatist
Democrats') big chance to finally privatize Medicare, albeit one bite
at a time.

That law created a brand known as Medicare Advantage under the
Medicare Part C provision, and a year later it phased in what are
known as risk-adjusted large-batch payments to insurance companies
offering Advantage plans.

Medicare Advantage plans are not Medicare. They're private health
insurance most often offered by the big for-profit insurance companies
(although some nonprofits participate, particularly the larger HMOs),
and the rules they must live by are considerably looser than those for
Medicare.

Even more consequential, they don't get reimbursed directly on a
person-by-person, procedure-by-procedure basis. Instead, every year,
Advantage providers submit a summary to the federal government of the
aggregate risk score of all their customers and, practically speaking,
are paid in a massive lump sum.

The higher their risk score, the larger the payment. A plan with
mostly very ill people in it will get much larger reimbursements than
a plan with mostly healthy people. After all, the former will be
costly to keep alive and healthy, while the latter won't cost much at
all.

Profit-seeking insurance companies, being the predators that they are,
have found a number of ways to raise their risk scores without raising
their expenses. The classical strategies of tying people to in-network
providers, denying procedures routinely during first-pass
authorization attempts, and having very high out-of-pocket caps are
carried over from regular health insurance systems to keep costs low
and profits high.

But with Medicare Advantage, the big insurance companies have invented
a whole new way to rip us all off while padding their bottom lines.

For example, many Medicare Advantage plans promote an annual home
visit by a nurse or physician's assistant as a "benefit" of the plan.
What the companies are doing, though, is trying to upcode their
customers to make them seem sicker than they are to increase their
overall Medicare reimbursement risk score.

"Heart failure," for example, can be a severe and expensive condition
to treat . . . or a barely perceptible tic on an EKG that represents
little or no threat to a person for years or even decades. Depression
is similarly variable; if it lasts less than two weeks, there's no
reimbursement; if it lasts longer than two weeks, it's called a "major
depressive episode" and rapidly jacks up a risk score.

The home health visits are designed more to look for illnesses or
codings that can increase risk scores than to find conditions that
require medical intervention. They're so profitable that an entire
industry has sprung up of companies that send nurses out on behalf of
the smaller insurance companies.

In summer 2014, the Center for Public Integrity (CPI) published an
in-depth investigative report titled Why Medicare Advantage Costs
Taxpayers Billions More Than It Should
[[link removed]].

They found, among other things, that one of the most common scams
companies were running involved that very scoring of their customers
as being sicker than they actually were, so that their reimbursements
were way above the cost of caring for those people.

HERE ARE A FEW QUOTES FROM THE REPORT:

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"Risk scores of Medicare Advantage patients rose sharply in plans in
at least 1,000 counties nationwide between 2007 and 2011, boosting
taxpayer costs by more than $36 billion over estimated costs for
caring for patients in standard Medicare."

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"In more than 200 of these counties, the cost of some Medicare
Advantage plans was at least 25 percent higher than the cost of
providing standard Medicare coverage."

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The report documents how risk scores rose twice as fast for people who
joined a Medicare Advantage health plan as for those who didn't.

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Patients, the report lays out, never know how their health is rated
because neither the health plan nor Medicare shares risk scores with
them—and the process itself is so arcane and secretive that it
remains unfathomable to many health professionals.

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"By 2009, government officials were estimating that just over 15
percent of total Medicare Advantage payments were inaccurate, about
$12 billion that year."

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Based on its own sampling of data from health plans, the report shows
how CMS has estimated that faulty risk scores triggered nearly $70
billion in what officials deemed "improper" payments to Medicare
Advantage plans from 2008 through 2013.

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CMS decided, according to the report, not to chase after overcharges
from 2008 through 2010 even though the agency estimated through
sampling that it made more than $32 billion in "improper" payments to
Medicare Advantage plans over those three years. CMS did not explain
its reasoning.

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The report documents how Medicare expects to pay the health plans more
than $150 billion this year [2014, the year the study was published].

Companies are almost never nailed for these overcharges, and when they
are, they usually pay back pennies on the dollar.

For example, when the Office of Inspector General, Health and Human
Services (which oversees Medicare), audited six out of the hundreds of
plans on the market in 2007, they found that just those six companies
"had been overpaid by an estimated $650 million" for that one
year. As the Center for Public Integrity states
[[link removed]],
"CMS settled five of the six audits for a total repayment of just over
$1.3 million."

The Centers for Medicare and Medicaid Services also, in 2012, decided
to audit only 30 plans a year going forward. As CPI noted, "At that
rate, it would take CMS more than 15 years to review the hundreds of
Medicare Advantage contracts now in force." And that's 15 years to
audit just one year's activity!

Things haven't improved since that 2014 investigative report from CPI.
In September 2019, Senator Sherrod Brown of Ohio and five Democratic
colleagues sent a letter to President Donald Trump's CMS
administrator, Seema Verma
[[link removed]].

"The recent HHS Payment Accuracy Report exposes that taxpayers have
overpaid Medicare Advantage plans more than $30 billion dollars over
the last three years," Brown wrote
[[link removed]].
"This report comes on the heels of a 2016 Government Accountability
Office (GAO) report and a 2013 GAO report on [Medicare Advantage] plan
overcharges and the failure of the Centers for Medicare and Medicaid
(CMS) to recoup billions of dollars of improper payments from MA
plans."

Meanwhile, during the four years of the Trump administration, CMS went
out of their way to illegally promote Medicare Advantage plans (which
typically cost CMS far more than a regular Medicare plan).

A February 2020 report in the 
[[link removed]]New
York Times
[[link removed]] stated,
"Under President Trump, some critics contend, the Centers for Medicare
and Medicaid Services, which administers Medicare, has become a
cheerleader for Advantage plans at the expense of original Medicare."

The report pointed to the draft release of the 2019 Medicare & You
handbook, which is mailed every year to all enrollees and posted
online. "Advocates and some lawmakers criticized language describing
Advantage as a less expensive alternative to original Medicare."

The National Bureau of Economic Research (NBER) compared Medicare
Advantage with traditional Medicare and found the Advantage programs
to be mind-bogglingly profitable: "MA insurer revenues are 30 percent
higher than their healthcare spending. Healthcare spending for
enrollees in MA is 25 percent lower than for enrollees in [traditional
Medicare] in the same county and [with the same] risk score."

At the same time, Medicare Advantage often screws its
customers. According to the NBER study
[[link removed]],
people with Medicare Advantage got 15 percent fewer colon cancer
screening tests, 24 percent fewer diagnostic tests, and 38 percent
fewer flu shots.

Speculation is rife as to why CMS would allow—much less
promote—privatized plans that cost Medicare far more than original
Medicare to rip off taxpayers to the tune of billions of dollars a
month.

One possibility is regulatory capture—people working in CMS know
that if they go along and get along, very well-paid jobs are waiting
for them at for-profit insurance companies after a few years of
government service. This is a chronic problem at other regulatory
agencies, particularly those overseeing pollution, pharmaceuticals,
telecommunications, and banking.

Another answer is that the Bush administration—where Medicare
Advantage started—was so enamored of the idea of privatizing
Medicare to eventually destroy the program (George W. Bush campaigned
extensively from the late 1970s through his presidency to privatize
both Social Security and Medicare) that they turned a blind eye to
abuses.

The Obama administration had other priorities, as they were trying to
push through the Affordable Care Act and didn't want to upset the
apple cart. And when Trump came into power, his folks saw anything
that drained resources out of Medicare and into the pockets of
multimillionaire health insurance executives—a group notoriously
generous when it comes to making political contributions—as a plus.

YOU ARE LOCKED IN TO MEDICARE ADVANTAGE

A fellow I'd known decades ago recently bubbled back into conversation
among a few of us who'd hung out together in New York back in the
1970s. Sam, I'll call him, had turned 65 and hadn't had
employer-provided health insurance in years. He spent a few hours
trying to figure out how to sign up for Medicare and then gave up,
totally confused, figuring he'd try again in a few months.

Unfortunately, his prostate intervened. When Sam started experiencing
pain urinating, he visited a local "doc in a box" urgent care clinic,
where they gave him a PSA test. The result was shocking: his PSA was
so high that it was a virtual certainty he had prostate cancer, and
possibly it had even metastasized, a situation that is
the second-leading cause of cancer death in American men
[[link removed]].

Telling him that he'd be facing hefty doctor and hospital bills
regardless of the outcome, the urgent care clinic signed him up for a
Medicare Advantage plan offered by an affiliate that almost certainly
paid them a commission for the sign-up. Sam was excited, though,
because he now had insurance, and it was a "no dollar" plan that
didn't cost him a penny.

Sam then got on the phone to find a urologist who specialized in
cancer. He found that the best worked out of Memorial Sloan Kettering
Cancer Center in New York, and, telling them he was "on Medicare," he
made an appointment to see one of their top docs. A month later, when
his appointment finally opened up, the person who was checking him
into the system told him that he'd have to pay cash because his
Advantage plan didn't include Sloan Kettering.

In fact, more than a third of all Medicare Advantage plans nationwide
do not include any of the National Cancer Institute centers, and none
of the Advantage plans offered in the New York City area include the
nation's most famous one
[[link removed]],
Memorial Sloan Kettering Cancer Center.

Shocked, Sam contacted Medicare to see if he could transfer from
Medicare Advantage to regular Medicare. This all happened in fall
2020, so they told him that he could make the change during the "open
enrollment period" of October 15 to December 7. He made the change and
called Sloan Kettering back.

This time, they wanted to know what Medigap policy he'd signed up for
to fill in the 20 percent of billing that Medicare doesn't cover. That
sent Sam back to the internet and, ultimately, to an insurance agent,
who told him that while Medigap plans can't refuse you because of
preexisting conditions when you first sign up when you turn 65, if you
shift from Medicare Advantage back to traditional Medicare after that
first enrollment, particularly if you're older or sick, they can
simply refuse to cover you.

Reporter Mark Miller wrote for the
[[link removed]] New
York Times
[[link removed]] in
February 2020
[[link removed]] about
Ed Stein, a 72-year-old man with bladder cancer and a Medicare
Advantage plan that didn't cover the cancer docs in his area who
specialized in his type of cancer. He tried to shift back to
traditional Medicare to cover what promised to be complex and
expensive surgery and chemotherapy. As Miller wrote, "That was when he
ran up against one of the least understood implications of selecting
Advantage when you enroll in Medicare: The decision is effectively
irrevocable."

As of this writing (November 2020), my friend Sam still hasn't seen a
doctor. This is the state of healthcare in America as it's been sliced
and diced by the multibillion-dollar insurance industry.

Meanwhile, every fall, Americans are inundated with hundreds of
millions of dollars' worth of TV, direct mail, and internet
advertising for Medicare Advantage plans. And where does the money
come from to pay for that advertising?

It comes from the same place that provided over $1 billion in wealth
to the former CEO of United Healthcare, and over $100 million a month
in compensation to senior executives in the largest health insurance
companies: denying claims while collecting risk adjustment claims from
your tax dollars and mine.

The simple solution to the Medicare Advantage problem is to kill off
the program. It was just a Trojan horse to privatize Medicare, and its
presence will make Medicare for All even harder to implement. At the
same time, the 20 percent hole that the GOP insisted on for skin in
the game with real Medicare needs to go, too.

A comprehensive Medicare for All program will eliminate both of these
problems.

_[THOM HARTMANN
[[link removed]] is a talk-show
host [[link removed]] and the author of "The Hidden
History of Monopolies: How Big Business Destroyed the American Dream
[[link removed]]" (2020); "The Hidden
History of the Supreme Court and the Betrayal of America
[[link removed]]" (2019); and more
than 25 other books in print.]_

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel
free to republish and share widely.

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