Shopping for a new Medicare Plan? Watch out For This Overlooked Practice.
By Mary Johnson, editor
If your year has been like mine, you’ve had a number of Medicare aggravations during which you promised yourself to look into different health and drug plan options at your first opportunity. Medicare’s Fall Open Enrollment is underway, and this is your opportunity to compare plans make changes to your coverage.
When comparing plans, beneficiaries are generally told to check premium costs, deductibles and other cost-sharing, whether the plan covers the drugs you actually take, provider networks, and added benefits, if any, not covered by Medicare. All of that is essential. But one key consideration that can be overlooked is how the plan uses prior authorization.
In an ideal world, prior authorization is supposed to deter patients from receiving care that is not truly medically necessary, thus reducing costs for insurers and out-of-pocket costs of enrollees. But prior authorization is sometimes misused to create barriers to getting care, or to even deny medically necessary care. Regardless of how prior authorization is used, it creates extra administrative hassles for physicians when they have to file the documentation to obtain the authorization.
According to the non-partisan Kaiser Family Foundation, in 2020, 99% of Medicare Advantage and drug plans (which are run by private insurers) require prior authorization for at least some health services and prescription drugs. Traditional Medicare, on the other hand, does not require prior authorization for the majority of services, but may do so for some Part B drugs administered in doctors’ offices, such as chemotherapy treatments. Medicare Advantage and prescription drug plans typically use prior authorization for higher cost services, such as inpatient hospital care, high tech diagnostic scans and tests, and more expensive prescription drugs.
Because Medicare Advantage plans receive a capped monthly reimbursement for each beneficiary, TSCL is concerned that there is a potential financial incentive for Medicare Advantage plans to inappropriately deny some services or prescriptions in an attempt to increase their profits. Denial of medically necessary care and prescriptions can worsen your health, as well as leading to high out-of-pocket costs, financial burdens, and debt.
The concern is well justified. The Office of the Inspector General for the Department of Health and Human Services has reported that Medicare Advantage plans deny care inappropriately at high rates. When the Office of the Inspector General (OIG) collected data, it found that when beneficiaries and providers appealed pre-authorization and payment denials, Medicare Advantage Organizations over-turned 75% of their own denials over the 2014-2016 period. The OIG noted “This is especially concerning because beneficiaries and providers rarely use the appeals process, which is designed to ensure access to care and payment.” Only 1 percent of beneficiaries and providers appealed denials.
One way to get a better idea about the Medicare Advantage and Part D plans in your area is to get free one-on-one counseling and help comparing plans through your State Health Insurance Assistance Program (SHIP). Often counselors can relay information about the quality and reliability of existing drug and health plans. Many SHIP programs operate through local area agencies on aging. You can get contact info for programs in your area at: https://www.shiptacenter.org.
Sources: “Prior Authorization in Medicare Advantage Plans: How Often Is It Used?” Gretchen Jacobson and Tricia Neuman, Kaiser Family Foundation, October 2018. “Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials,” Office of the Inspector General, Department of Health and Human Services, September 25, 2018.