Senate Permanent Subcommittee on Investigations Releases Majority Staff Report Exposing Medicare Advantage Insurers'

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3. Full report at:

https://www.hsgac.senate.gov/wp-content/uploads/2024.10.17-PSI-Majority-Staff-Report-on-Medicare-Advantage.pdf

Medicare Advantage has grown rapidly in recent years and is, as of 2023, larger than Traditional Medicare.
Despite the enormous growth in enrollment, some two dozen health systems have announced over the past
year that they will stop accepting Medicare Advantage beneficiaries, with hospitals and providers
overwhelmingly citing frustration with prior authorization. Prior authorization was one of the tools given
to insurers participating in the program to help them prevent harmful or unnecessary medical services, but
as HHS OIG and others have warned, the structure of Medicare Advantage can incentivize companies to
use the process to deny care to which patients are entitled. The evidence in this report demonstrates that
this is likely occurring at a scale impacting tens of thousands of elderly Americans, and that denials are
overwhelmingly occurring in costly but critical post-acute care.

Regulators collect certain information about Medicare Advantage insurers’ use of prior authorization, but
the opacity of the current system is part of what enables insurers to abuse it. The Subcommittee was able
to analyze prior authorization data that Medicare Advantage insurers are not currently required to make
public, and to examine internal documents from the insurers that provide context for the trends born out
in this data. But many of the issues that most frustrate patients and providers remain cloaked in
uncertainty. This is particularly true of insurers’ use of automation and predictive technologies, which PSI
continues to investigate. Media reporting on this issue indicates that many of the most disturbing
practices, including using artificial intelligence to fix Medicare Advantage beneficiaries’ lengths of stay in
certain facilities, were accomplished through informal pressure campaigns on employees. Such wrongs
are unlikely to be captured in computer code or official communication, to say nothing of regulatory
filings.

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.257 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 current arrangement. Insurers can and must do better, for the sake of the American
healthcare system and the patients the government entrusts to them.