Over the past few weeks, I have gotten many calls and emails regarding Medicare Advantage and why Great Plains Health and several other rural hospitals gave notice that they will no longer be accepting those plans as of January 1, 2025.  One constituent in particular called me last week and asked that I provide the rest of the story behind the GPH decision to discontinue accepting Medicare Advantage plans.

Medicare is the federal health insurance program for Americans age 65 and older and provides a range of health service for seniors.  Medicare Advantage is a private plan alternative to traditional Medicare that is required to provide the same “minimum” levels of coverage as Medicare.  Insurance companies with Medicare Advantage plans contract with the Medicare program and receive payments for providing services on a per beneficiary basis.

Both traditional Medicare and Medicare Advantage must cover services that are “reasonable and necessary for the diagnosis or treatment of the illness or injury.  Under Traditional Medicare, patients receive care at Medicare-certified facilities, and the facility or the provider then submits a report of their cost to Medicare Administrative Contractors for processing and reimbursement determination.  These facility or provider claims are also subject to various compliance and auditing efforts to prevent improper payments.  Because they take place after care (and sometimes after payment) has been provided, these processes are sometimes called “retrospective review”.  Medicare Advance insurers by contract, frequently require patients and providers to obtain prior authorization before receiving care.  Over the years, the use of pre-authorizations as a tool to deny care and delay payment to providers has exploded.  The combination of denying pre-authorizations, not approving transfers from acute care to long-term care, and forcing providers to accept payment rates well below Traditional Medicare has brought us to the place we are today.  Let me be very clear, this problem was not caused by the hospitals, this issue is fully is in the hands of the Medicare Advantage insurers who are trying to increase profits at the expense of the providers and the patients.

On May 17, 2023, the Permanent Sub-Committee on Investigations launched an inquiry into the barriers facing seniors enrolled in Medicare Advantage in accessing care.  The following is a quote from that report.

“Although the Subcommittee’s recommendations in this report are targeted at regulators, this should not distract from the fact that it is insurers who are using prior authorization to protect billions in profits while forcing vulnerable patients into impossible choices.  This is particularly troubling when recent analyses indicate that Medicare Advantage is more expensive than Traditional Medicare, with one assessment concluding that in 2024, the government spent 22 percent more to fund Medicare Advantage plans than it would have had those beneficiaries been enrolled in Traditional Medicare.  There is a role for the free market to improve the delivery of healthcare to America’s seniors, but there is nothing inevitable about the harms done by the by the current arrangement.  Insurers can and must do better, for the sake of the American healthcare system and the patients the government entrusts to them”

It is a privilege to serve as your state Senator and I look forward to hearing from you on issues that top of mind for you.  I may not have all the answers, but my staff and I will work hard to find the answers.