Here in Wyoming and across the country, people enrolled in Medicare are engaged in the annual task of assessing their supplemental insurance coverage. Insurance companies anxious to acquire more customers have flooded my mail box with pitches urging me to sign up before the open enrollment period ends Dec. 7.
The supplemental plans, known as Medigap, are offered by private insurers to cover some or all of the out-of-pocket costs that Medicare Parts A and B do not. Medicare’s website enables its clients to compare the “Medigap” plans easily, but it’s still not an easy decision. It requires gambling on one’s health — or in more official language, risk assessment. As elderly humans, we senior citizens know that cancer, a Parkinson’s diagnosis, or onset of diabetes can suddenly change a person’s health needs and send medical costs skyrocketing. Will it happen this year? Next?
Wyoming Senior Citizens, a private, nonprofit organization, provides a buyer’s guide put together by the Wyoming Department of Insurance. The guide provides a sense of an insurer’s ability to meet its obligations to policyholders via ratings from A.M. Best.
Even with those resources, it’s important for seniors and their families to be vigilant for deceptive advertising and offers. Watch for products that promise a range of services for “free” or “at no additional cost.”
In the past I’ve relied on the AARP to fight back against scammers on behalf of seniors, but my trust waned when I realized the organization benefits from some of the deception.
Which brings me to UnitedHealthcare. This giant insurance provider based in Minnesota first contacted me in late October. It advertises regularly in publications I receive from the AARP, the great advocate for senior citizens and defender of both Medicare and Social Security.
UnitedHealthcare assured me that its “AARP Medicare Advantage Choice Plan 1” provides more benefits than original Medicare. The sales pitch got my attention, but not for the reasons the company hoped. I have followed reporting on the use of advantage plans to boost insurance company profits through practices that the federal government considers “potentially fraudulent.”
So why does AARP, which regularly urges Medicare and Social Security recipients to be on the lookout for fraud and scams, continue its business relationship with UnitedHealthcare?
A June 5, 2022 Washington Post report detailed Advantage Plan manipulation by big insurance companies. The newspaper relied upon a report from the Office of the Inspector General and interviews with doctors and other providers. The Post noted that MedPAC, a government watchdog panel, found Medicare Advantage plans increasingly cost taxpayers more money to run than traditional fee-for service Medicare.
“The higher cost, what MedPAC labels ‘excess payments,’ reached $12 billion in 2020 out of total program costs of $350 billion and are projected to top $16 billion next year, MedPAC said in March,” the Post reported.
How did they do this? Insurers pressured doctors to add more “risk adjustment codes” to a patient’s file, even if those codes referred to long-resolved health issues. “If companies add more risk adjustment codes to a Medicare Advantage beneficiary’s medical record to receive higher payment — but don’t spend money on the additional care — they make more money.”
Your friend who recovered from breast cancer 15 years ago but is no longer treated for cancer illustrates how this data mining works. The insurers find these old health issues, then include them as part of the risk they incur even though the patient no longer requires treatment.
The industry says it follows Medicare’s rules and its sometimes-vague regulations and ensures their plans can anticipate health problems and reduce hospitalizations.
Nevertheless, the government, according to the Post, “considers it improper — potentially even fraudulent — for providers to add codes for medical conditions that have been resolved or have no bearing on a patient’s current health.”
The Office of Inspector General noted that UnitedHealthcare “stood out among Medicare Advantage companies for its aggressive use of risk assessments without evidence new risk codes were related to ongoing medical care,” the Post wrote.
I contacted the Wyoming AARP office in Cheyenne to determine where AARP stands on these UnitedHealthcare practices. I wanted to find out if AARP will continue to take royalties from UnitedHealthcare and sell advertising that touts the company to its millions of members.
The Wyoming office advised me to contact the national office. I spoke with AARP’s External Relations Director Colby Nelson, who assured me AARP works hard for seniors and does so with great transparency. He pointed to recently passed legislation that enables Medicare to negotiate drug prices as one of AARP’s great lobbying successes.
But he dodged the moral question I asked: Given its reputation as a defender of Medicare and Social Security against fraud and scams, should AARP continue to accept royalties and advertising dollars from a company whose Medicare Advantage plan management has raised such significant questions from doctors, the press, and the government itself?
Nelson wouldn’t comment on a potential investigation like the one involving UnitedHealthCare, but said in an email AARP expects all companies it works with to meet legal, ethical, and quality standards and monitors their performance.
AARP licenses its intellectual property to a variety of companies that provide commercial benefits to its members. “These provider companies are vetted, and the royalty revenue generated” — more than $1 billion according to AARP’s most recent audit — “is used by AARP in support of our mission to empower people to live as they choose when they get older,” Nelson wrote.
The front page of AARP’s November “Bulletin” features a headline that says “Fraud Surge — Medicare Hit by New Scam Types.” The story frets over a recent OIG study that detected “potentially fraudulent” billing by health providers of roughly $128 million due to “new channels of Medicare fraud opened during the COVID pandemic …”
I agree we should be concerned about these recent problems, but that sum falls far, far below the $12 billion in “excess payments” made to Medicare Advantage insurers that were questioned by MedPAC.
In that same issue of the AARP Bulletin there’s a Fraud Watch column warning seniors that scammers will “seduce you.” The AARP should consider its own advice and reassess its relationship with UnitedHealthcare.