United States Senators Express "Concern" About Medicare Advantage Denial of Care Business Model
Lawmakers begin to address the Commercial Health Insurance industry's Denial of Care business model | December 28, 2023 | Becker's Hospital Review
A pair of senators are asking CMS to require Medicare Advantage plans to cover stays in long-term care facilities at the same rate as traditional Medicare.
Chris Murphy, a Connecticut Democrat, and Thom Tillis, a North Carolina Republican, wrote a letter to CMS Administrator Chiquita Brooks-LaSure Dec. 21, asking the agency to clarify MA plans cannot use different standards to approve long-term care than traditional Medicare.
In their letter the senators wrote they have heard concerns from long-term care hospitals in states that "regularly receive denial letters from Medicare Advantage plans."
Why? Because Denial of Care is the Commercial Health Insurance industry business model and the Harm-for-Profit model remains legal in the United States.
In a final rule issued in April, CMS said Medicare Advantage plans cannot implement prior authorization criteria that are more stringent than traditional Medicare. In their letter, the senators asked the agency to clarify this statute also applies to long-term care hospitals.
"Unfortunately, Medicare Advantage plan prior authorization practices are creating significant barriers to [long-term hospital] care for critically and chronically ill patients," the senators wrote.
"We write to ask CMS to confirm this interpretation is correct and to request such information be publicly clarified to eliminate confusion for Medicare Advantage plans and ensure that [long-term care hospitals] are treated the same as any other post-acute care provider under the Medicare Advantage regulations," the senators concluded.
February 14, 2024 Update:
Montgomery, Ala.-based Baptist Health is suing Humana, alleging the insurer's Medicare Advantage plan underpaid the hospital for drugs purchased through the 340B program.
In a lawsuit filed in the Circuit Court of Montgomery County, Ala., Jan. 9, and transferred to the U.S. District Court for the Middle District of Alabama Feb. 9, the health system alleged Humana has refused to pay the system higher rates for outpatient drugs purchased through the 340B program.
In 2022, the Supreme Court ruled CMS illegally cut reimbursement rates for outpatient drugs purchased by safety net hospitals. CMS said it would pay a lump sum of $9 billion to reimburse 340B hospitals to remedy the underpayments. Baptist Medical Center South in Montgomery is set to receive over $36 million in repayments from the agency.
In its lawsuit, Baptist Health argued Humana owes it money that matches CMS' rectified rates.
According to the court documents, Baptist Health is in-network with Humana's Medicare Advantage offerings. The system argued in the court filing that from 2018 to 2022, Humana based its payment rates for 340B drugs on the CMS rates, later deemed illegal by the Supreme Court. Baptist Health asked the payer to commit to reimburse the health system for the drugs at the higher payment rates CMS established after the Supreme Court ruled its cuts were illegal.
In the filing, Baptist Health alleged lawyers for Humana informed the system it "disputes any obligation to make such payments."
"Humana's refusal to act has worked a substantial windfall to Humana as it continues to hold funds provided by CMS for Humana's Medicare Advantage plans without reimbursing Baptist Health for the amounts owed to it under the agreement," lawyers for Baptist Health wrote.
A Humana spokesperson told Becker's the payer does not comment on pending litigation.