Episode 6 - Medicare Enrollment Processes and Strategies
Nov 01, 2024
Please see below for a full transcript of this episode:
In response to an aging population, traditional Medicare patients are incentivized to enroll in Medicare Advantage plans. But Medicare Advantage plans present new challenges for provider reimbursement.
Welcome to Redefining Health Law, brought to you by the law firm of Parker, Hudson, Rainer and Dobbs, LLP, a boutique law firm with offices in Atlanta, Chicago, and Tallahassee. Your host for this podcast is Tara Ravi, a healthcare partner with prior work experience in both clinical research and patient care delivery.
She is an adjunct professor at the Emory School of Law, where she teaches corporate health law. Tara leverages her past work experience in the healthcare industry to advise healthcare organizations facing growth related challenges. Although Tara is a partner in the law firm of Parker Hudson, the views expressed in this podcast are Tara's personal views and not the views of the firm or any of the firm's clients and are not intended to be legal advice.
We hope you enjoy this podcast.
Tara Ravi:
Hi, I'm Tara Ravi and welcome to Redefining Health Law. Today we have a special guest, Kristen Bond Dobson, a healthcare attorney from Parker Hudson's Tallahassee office. Kristen, thank you so much for joining us today and bringing your expertise on provider issues with Medicare Advantage plans and the reimbursement issues.
Okay, let's get started with some of the trends in enrollment. What are you seeing out there?
Kristen Bond Dobson:
Thanks so much for having me, Tara. It's an interesting time for Medicare Advantage. Enrollment has exceeded 50 percent of total Medicare enrollment. With that level of market penetration comes more attention, more scrutiny, more regulations, and potentially more enforcement.
CMS last year issued a final rule imposing some of the most substantive regulations on the Medicare Advantage program that we've seen since the program's inception. Congress is also watching, sending letters to CMS about various issues with Medicare Advantage organizations. All of this is happening while the use of artificial intelligence is taking off across the healthcare industry as it is every other industry.
So against that backdrop, I just kind of wanted to highlight today some of the major issues in the Medicare Advantage space and offer some leverage points healthcare providers might consider using in light of the new regulations and increased attention on the Medicare Advantage industry. In 2022, the Office of Inspector General, OIG, issued a report making a couple of findings with respect to Medicare Advantage Organizations.
It first found that MAOs, Medicare Advantage Organizations, sometimes delay or deny care even when it meets traditional Medicare coverage. It did this through prior authorization. The OIG also found that MAOs were sometimes using clinical criteria that was not contained in Medicare rules, and also required unnecessary documentation to support the medical necessity of the services.
I mentioned prior authorization. It's impossible to not talk about prior authorization when you talk about Medicare Advantage. And it's important to note that traditional Medicare rarely requires prior authorization for an item or service. In addition to the OIG report, for years we've seen anecdotal stories in news outlets, including one I just read from the New York Times last week, about beneficiaries facing prior authorization hurdles that hinder their ability to access the care their treating physicians and providers approved.
And these are particularly common in the long-term care setting. Now MAOs argue that they're using prior authorization to prevent unnecessary, ill advised, or wasteful care. However, I would note that the Medicare Advantage program has never saved the federal government money. And actually, in MedPAC's latest report to the Congress, it noted that the government spends an estimated 22 percent more for Medicare Advantage enrollees than it would spend if those enrollees were in traditional Medicare.
In addition to the OIG report from 2022 and these anecdotal stories, we've also seen increasing frustration on the provider side. We're hearing our provider clients all the time about how they get denials from MAOs at a far higher rate than traditional Medicare for the same service. This has led to an increasing number of providers to terminate their contracts with MAOs.
Tara Ravi:
That's a fascinating statistic that the Medicare Advantage plans are actually more expensive for the government than fee for service Medicare. There's an interesting study that's come out that shows that in the post-acute care spaces, specifically for nursing homes, that Medicare Advantage patients use less services than fee for service patients.
And the concept is that fee for service incentivizes physicians and SNFs to order more services. Now, on the flip side, we're not really sure if those patients actually had better health outcomes, the Medicare Advantage patients or not. So can you give us some insight into that? How are we going to see any new regulations that are going to improve this process, try and alleviate Medicare Advantage issues, at least in the post-acute care spaces?
Kristen Bond Dobson:
Yeah. So actually I mentioned at the outset that kind of sweeping final rule that CMS issued last year. And one of the intents behind it is to get at these issues you're talking about. And I want to pause here and just make sure our listeners are aware of what we mean when we say traditional Medicare and what we mean when we say Medicare Advantage, because you mentioned fee for service.
And so traditional Medicare basically reimburses providers for every single service or item that they provide to one of their patients. That's what we mean. Fee for service. Medicare Advantage, on the other hand, is reimbursed by the government essentially based on the diagnosis or diagnoses of a patient.
And so regardless of the number of items or services that a patient is provided the Medicare Advantage plan is paid a flat rate for that based on the diagnosis codes. There's a bit of a back-and-forth push and pull between providers and plans over are providers just suggesting more services or items for traditional Medicare beneficiaries and are Medicare Advantage plans actually trying to take a close look at what items and services are really needed. And so that's kind of the consistent push and pull we see between providers and plans.
But to get back to your question, yes, the sweeping final rule was issued by CMS last year, and it does a couple of things. It clarifies that Medicare Advantage organizations must comply with coverage requirements in traditional Medicare laws when making coverage decisions and making medical necessity determinations.
This is a big deal because oftentimes Medicare Advantage plans would sometimes push back and say, well, that's not, we technically don't have to follow that. And in some instances, they were using internal coverage criteria that may have varied a little bit from what traditional Medicare required. So, the first thing the rule does is kind of crack down on that and make clear to plans, hey, you have to follow traditional Medicare coverage requirements.
We've talked about prior authorization. The rule also cracks down on the use of prior authorization by MAOs. Now, I want to be very clear here. The rule does not eliminate plans' use of prior authorization. Some folks pushed for that when the rule was being developed, but CMS was very clear. They didn't think they had the authority to do that. So MAOs can still use prior authorization. The rule just kind of limits the way they can do that. And one important way they did that is under the new regulation approval of a prior authorization request for a course of treatment must be valid for as long as medically necessary to avoid disruptions in care and you were talking about the long term care space just a moment ago and it's really this is what this rule is getting at is sometimes a plan might approve a course of treatment in the long term care space for six weeks or so and then a couple weeks in they might say we're not going to provide that care beyond two more days.
And so this rule gets at that by saying hey look, you can't disrupt care. And so another thing with respect to prior authorization is it says that the rule says that if the MAO approves furnishing a covered item or service through a prior authorization, the MAO may later deny coverage based on lack of medical necessity.
And we actually helped a provider with this last year and actually a nursing facility, skilled nursing facility, they had received all of these prior authorizations for care. And then later the MAO came back and was like, actually that wasn't medically necessary, tried to recoup the money. Basically we showed them evidence of the prior authorizations and that kind of eliminated the drawback.
So that's another important thing the rule does. The last thing I kind of want to highlight from that final rule is that it clarifies that the two-midnight rule applies to Medicare Advantage organizations. So the two-midnight rule I believe was established in 2013, about 2013. And it essentially states that if the admitting physician believes that the patient will stay for more than two midnights, then the inpatient admission is medically necessary.
And so, this new rule clarifies that that requirement applies to Medicare Advantage organizations as well. I have already seen some stories of Medicare Advantage organizations suggesting that this requirement about the two-midnight rule might cause financial stress to them. But I would suggest there are also other things going on here, including the increased utilization that we talked about at the very beginning.
And also we're seeing sicker enrollees choose Medicare Advantage whereas, when Medicare Advantage kicked off, a lot of times it was kind of healthier enrollees. And so we're seeing sicker enrollees incentivized based on some of the, you know, the free hearing aids or free gym memberships that Medicare Advantage plans often offer.
So anyway, all that's to say the two-midnight rule now applies to Medicare Advantage organizations. And one final note I wanted to kind of discuss real quickly on the plan going back to the prior authorization front is actually some states are starting to impose or starting to limit prior authorization.
And actually the Kaiser Family Foundation reported earlier this year that in 2023, 29 states and Washington, D. C. considered approximately 90 bills to limit prior authorization requirements. So I just kind of wanted to highlight that. I think that's pretty interesting. This prior authorization is, is a big deal in the Medicare Advantage space.
Tara Ravi:
Thank you, Kristen, and particularly for highlighting the pre auth problems that Medicare Advantage plans have been having, specifically in the SNF side or in the post-acute care space where you are getting a lot of pre auths and then subsequent coverage denials or reimbursement denials, and these are hampering SNFs, which very easily can go bankrupt or out of business, and that is one of the critical positions these post-acute care providers in order to help the life cycle healthcare life cycle delivery, move forwards, get patients out of the hospitals, get them into the right settings.
It's also one of the main reasons that providers are terminating agreements with Medicare Advantage plans, which we don't want to have happen, especially as we're transitioning more patients off of fee for service into Medicare Advantage. So tell me, typically Medicare fee for service has more, specific coverage requirements and basis for denial documents.
We see them in the manuals. We see them in notice and rule comment making. Private pay is a little bit more nebulous because they're not subject to the government requirements of having more transparency or disclosure. Where do you think Medicare advantage plans sit in that continuum?
Kristen Bond Dobson:
It's a good question.
And I think that's what this final rule issue last year was aiming at. Oftentimes, Medicare Advantage organizations would sort of suggest that they weren't bound by the same traditional Medicare coverage requirements as traditional Medicare. So what this rule does is kind of sort of signify once and clarify once and for all hey no traditional Medicare coverage requirements do apply to you, the two-midnight rule does apply to you. I think it will be interesting to see how this rule plays out because we've heard from some providers that plans are still not necessarily following the two-midnight rule.
And so, CMS has suggested that they are watching, they are not unwilling to issue enforcement actions. So I think it kind of remains to be seen how this new rule affects Medicare Advantage organization behavior.
Tara Ravi:
Well, in terms of redefining health law, it seems like if we're going to transition Medicare fee for service patients, and we want the ultimate goal by the government at some point is to transition all patients off of fee for service into Medicare Advantage, then we need to start redefining these laws so that these patients, or at least the providers, get as much transparency as they have under fee for service.
Okay, so let's talk about AI. AI is the word of the day. Everyone's using it. AI, AI. What is AI doing here? Is it helping? Is it hurting?
Kristen Bond Dobson:
That's another question that will play itself out. Although I will say, earlier this year, CMS issued some frequently asked questions, FAQs, to kind of further clarify what they meant with this regulation they issued last year.
And one of the FAQs was on the issue of use of AI by Medicare Advantage organizations is specifically in coverage determinations. And so in this FAQ, CMS clarified that MAOs must ensure they're making coverage determinations based on the specific circumstances of the individual as opposed to using an algorithm or software that doesn't account for an individual circumstance.
So, while CMS is saying that MAOs can use artificial intelligence tools, they're also saying that you have to make sure that those tools are compliant with federal regulation, which require coverage determinations to be made based on a patient's individual circumstance. We will see how that plays out.
What I will say Is that two of the major Medicare Advantage plans and frankly commercial payers, Humana and United, are both facing lawsuits filed by multiple beneficiaries in different states, alleging that Humana and United wrongly and unlawfully denied coverage by using these artificial intelligence tools.
We're very on in those lawsuits. Who knows where it'll go, but that's interesting and I know in the hospice space, providers have been using AI tools for a while now, specifically kind of to predict when the patient might be in their last days of life so that the provider can increase nursing visits. So we're very early on in AI.
I know Congress is watching this. Congress sent a letter, I should say not the entire Congress, I think it was about 30 members sent a letter to the CMS administrator late last year. Basically, raising concerns about the use of AI by Medicare Advantage organizations and an additional note to that, the current administration has issued some guidance and kind of just stating its concern about the use of AI and how AI tools might proliferate biases and that sort of thing in violation of the Affordable Care Act and its requirements. So AI is the word of the day, Tara. It'll be interesting to see where it goes from here. That is definitely an issue for healthcare watchers to watch.
Tara Ravi:
Okay, big theme. AI is good, perhaps, but requires significant human supervision, which I think was kind of the theme even back in the 60s.
So, what are providers supposed to do here? What, specifically in the post acute care space, what are some recommendations so that we can keep this moving along, have a good, healthy relationship with Medicare Advantage plans, get patients moving to the spaces they need to be moving to?
Kristen Bond Dobson:
Remember that the reviewers who are reviewing the claims, they may not be thinking about the new regulations that they're held to last year.
So make sure that you're referencing those: hey, the two-midnight rule applies to you. So just make sure, take a look at those templates, make sure those are updated. And I also want to say, don't be discouraged. Providers see amazing success when they appeal. There was actually a very interesting report that the OIG issued several years ago, which found that when beneficiaries and providers appealed preauthorization and payment denials, MAOs overturned 75 percent of their own denials.
Because remember the first level of appeal is internally within Medicare Advantage organization. So 75 percent is a staggering number, and that number only increased at the next level when it went to an independent reviewing organization. So don't be afraid to appeal. Make sure your templates are updated.
And I would also say, on the contracting side, I think for a long time, providers when they were negotiating or renegotiating contracts with MAOs, they really just focused on the reimbursement rate. But make sure your contracting folks are thinking about, what else can we put in here that would be helpful for us?
One very easy thing that I've actually seen MAOs agree to is a provision for arbitration through the AAA payer provider arbitration rules. That's a much easier process and I mean, it's time consuming, but it's a way that you can challenge a lot of denials at once and MAOs are becoming more willing to put that in there.
So that's another consideration. And we talked earlier about terminating contracts. I don't think providers should be scared by this. MAOs are required to comply with network adequacy requirements. So having a sufficient number of providers in their network is important to them. They have to. So providers hold more cards here than I think they've historically realized.
So those are just a couple things to consider as the Medicare Advantage industry continues to grow and also as CMS and the government are paying attention.
Tara Ravi:
Well, that is a staggering statistic. 75 percent success on appeal. So that's a huge difference between Medicare fee for service and Medicare Advantage.
That's a positive fact right there. This is all very helpful. Certainly we're going to get to a place where we might just only have Medicare Advantage. There seems to be tons of private equity investment in capitated healthcare delivery models that are being transitioned into Medicare Advantage plans.
One example would be kind of meal delivery services, exercise platforms, telehealth, all of that is being developed out and invested in by private equity and then sold via government contracts into these Medicare Advantage plans. So it seems like the train is out the station. There's going to be continued more enrollment in Medicare Advantage.
And I guess the next big question is, I can't really figure it out. Should my mom enroll in a Medicare Advantage plan?
Kristen Bond Dobson:
That's the million-dollar question. Last year, my mother turned 65 and she asked me this question as well. And the main consideration here, I think, is every single provider accepts traditional Medicare.
Not every single provider accepts every single Medicare Advantage plan. So if you're looking at Medicare Advantage plans, they certainly offer additional perks that traditional Medicare doesn't. We were talking about some gym classes, also hearing aids, but make sure that you check and see if there are enough providers in the network.
If you won't be forced to use one provider specialist, cause that's the only one. I would take a very close look. I think it's going to be very dependent on any situation, and we'll see what happens next.
Tara Ravi:
Thank you, Kristen. So the answer is, it depends. No, I appreciate that. Honestly, that's probably a whole separate episode, just managing and figuring out how to enroll in Medicare Advantage.
It's an interesting issue because we've discussed this idea where parents live in faraway states from kids now or from their, their children. Part of that is because of COVID. There was a lot of moving around migration. So trying to walk through a plan or Part D plan with your parent or aging parent is just as difficult and it's all part of the issues surrounding the aging population.
But I really appreciate your time today. Thank you so much. Kristen is in town from Tallahassee at a firm event last night. I grabbed her and said, please, can you do this podcast with us? So this was fantastic. Well, much appreciated. All right. Well, thanks again for listening to Redefining Health Law. If you haven't already, I invite you to subscribe on your favorite podcast player so you won't miss an episode.
And of course, if you have any topics you'd like to hear discussed, please don't hesitate to email us at redefininghealthlaw@phrd.com. P like Parker, H like Hudson, R like Ravi, and D like doctor. Again, that's redefininghealthlaw@phrd.com. We would really love to hear from you. Thanks for listening.
And until next time, I'm Tara Ravi.