Camel's Nose Has the Sniffles

Medicare Advantage plans, where private plans are paid more than old-fashioned medicare to do evil things to their customers, has always a pretext for privatizing Medicare.

The idea was, that if the insurance companies could restrain themselves long enough, Medicare could be replaced with a fully privatized system.

That was the intention when it was passed by George W. Bush and the Republican Congress in 2003, and but for the greed of those meddling insurance companies, it might have worked.

But there are a number of things that are certain, and one is that if profit is involved, insurance companies would murder their own grandmothers for the money.

In this case it means that the private plans are getting so abusive and so obstructive that hospitals are bailing out of privatized Medicare:

Medicare Advantage provides health coverage to more than half of the nation's seniors, but a growing number of hospitals and health systems nationwide are pushing back and dropping some or all contracts with the private plans altogether.

Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers. Some systems have noted that most MA carriers have faced allegations of billing fraud from the federal government and are being probed by lawmakers over their high denial rates.

"It's become a game of delay, deny and not pay,'' Chris Van Gorder, president and CEO of San Diego-based Scripps Health, told Becker's. "Providers are going to have to get out of full-risk capitation because it just doesn't work — we're the bottom of the food chain, and the food chain is not being fed." 

A quick note here, "Capitation" is where the insurers and providers are paid on a flat rate base per participants, and not as a percentage of services.

In theory, this gives these insurers and providers an incentive to find cost savings, but in reality, it provides insurers an incentive to skim healthier patients and to deny and delay the provision of services by providers.

As a bit of basic math, if capitation worked, Medicare Advantage would not need to be paid MORE than old style Medicare.

In late September, Scripps began notifying patients that it is terminating Medicare Advantage contracts for its integrated medical groups, a move that will affect more than 30,000 seniors in the region. The medical groups, Scripps Clinic and Scripps Coastal, employ more than 1,000 physicians, including advanced practitioners.

Mr. Van Gorder said the health system is facing a loss of $75 million this year on the MA contracts, which will end Dec. 31 for patients covered by UnitedHealthcare, Anthem Blue Cross, Blue Shield of California, Centene's Health Net and a few more smaller carriers. The system will remain in network for about 13,000 MA enrollees who receive care through Scripps' individual physician associations.

………

Bend, Ore.-based St. Charles Health System took it a step further and was not only considering dropping all Medicare Advantage plans, but also encouraged its older patients not to enroll in the private plans during the upcoming enrollment period in October. The health system's president and CEO, CFO and chief clinical officer cited high rates of denials, longer hospital stays and overall administrative burden for clinicians. Ultimately, the health system has decided to remain in network with four MA carriers and will not renew contracts with three.

(emphasis mine)

I've heard of hospitals dropping insurance before, but telling the patients that it it's sick of these mother-f%$#ing insurance companies in the mother-f%$#ing hospital?  

That's a new level of hostility. 

The article goes to list 13 other hospital systems pulling out of Medicare Advantage plans in full or in part, 

It's a failed experiment, but given the nature of the program, it will be hard to pass a bill winding it down through Congress, particularly with a 'Phant majority in the house, but the Biden administration has promised a crack-down on some of the unethical actions of providers, and while the initial proposal is weak tea, a harsher regulatory regime could go a long way toward making these plans better, and making their marketing less deceptive.

Of course, I would suggest frog-marching senior executives and board members out of their offices in handcuffs, but that is kind of my go-to solution to all forms of white collar crimes.