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Nursing Home Patients Caught in a Squeeze

What happens when Medicare Advantage plans aren’t an advantage
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It’s happening more and more often: Medicare Advantage plans are telling nursing home patients it’s time to go home because their insurance coverage is ending, and at the same time, their doctors are telling them it’s too soon to go. Journalist Susan Jaffe investigates the situation here for Kaiser Health News. Her story was posted on KHN’s website on October 4, 2022, and also ran on Fortune. Funding from the Silver Century Foundation helps KHN develop articles (like this one) on longevity and related health and social issues. 

After 11 days in a St. Paul, MN, skilled nursing facility, recuperating from a fall, Paula Christopherson, 97, was told by her insurer that she should return home.

But instead of being relieved, Christopherson and her daughter were worried because her medical team said she wasn’t well enough to leave.

“This seems unethical,” said daughter Amy Loomis, who feared what would happen if the Medicare Advantage plan, run by UnitedHealthcare, ended coverage for her mother’s nursing home care. The facility gave Christopherson a choice: pay several thousand dollars to stay, appeal the company’s decision or go home.

Health care providers, nursing home representatives and advocates for residents say Medicare Advantage plans are increasingly ending members’ coverage for nursing home and rehabilitation services before patients are healthy enough to go home.

Half of the nearly 65 million people with Medicare are enrolled in the private health plans called Medicare Advantage, an alternative to the traditional government program. The plans must cover—at a minimum—the same benefits as traditional Medicare, including up to 100 days of skilled, nursing home care every year.

But the private plans have leeway when deciding how much nursing home care a patient needs.

“In traditional Medicare, the medical professionals at the facility decide when someone is safe to go home,” said Eric Krupa, an attorney at the Center for Medicare Advocacy, a nonprofit law group that advises beneficiaries. “In Medicare Advantage, the plan decides.”

Mairead Painter, a vice president of the National Association of State Long-Term Care Ombudsman Programs, who directs Connecticut’s office, said, “People are going to the nursing home, and then very quickly getting a denial, and then told to appeal, which adds to their stress when they’re already trying to recuperate.”

The health plan can determine how long someone is in a nursing home typically without laying eyes on the person.

—Jill Sumner

The federal government pays Medicare Advantage plans a monthly amount for each enrollee, regardless of how much care that person needs. This raises “the potential incentive for insurers to deny access to services and payment in an attempt to increase profits,” according to an April analysis by the Department of Health and Human Services’ inspector general. Investigators found that nursing home coverage was among the most frequently denied services by the private plans and often would have been covered under traditional Medicare.

The federal Centers for Medicare & Medicaid Services [CMS] recently signaled its interest in cracking down on unwarranted denials of members’ coverage. In August, it asked for public feedback on how to prevent Advantage plans from limiting “access to medically necessary care.”

The limits on nursing home coverage come after several decades of efforts by insurers to reduce hospitalizations, initiatives designed to help drive down costs and reduce the risk of infections.

Charlene Harrington, a professor emerita at the University of California-San Francisco’s School of Nursing and an expert on nursing home reimbursement and regulation, said nursing homes have an incentive to extend residents’ stays. “Length of stay and occupancy are the main predictor of profitability, so they want to keep people as long as possible,” she said. Many facilities still have empty beds, a lingering effect of the COVID-19 pandemic.

When to leave a nursing home “is a complicated decision because you have two groups that have reverse incentives,” she said. “People are probably better off at home,” she said, if they are healthy enough and have family members or other sources of support and secure housing. “The resident ought to have some say about it.”

Jill Sumner, a vice president for the American Health Care Association, which represents nursing homes, said her group has “significant concerns” about large Advantage plans cutting off coverage. “The health plan can determine how long someone is in a nursing home typically without laying eyes on the person,” she said.

The problem has become “more widespread and more frequent,” said Dr. Rajeev Kumar, vice president of the Society for Post-Acute and Long-Term Care Medicine, which represents long term care practitioners. “It’s not just one plan,” he said. “It’s pretty much all of them.”

As Medicare Advantage enrollment has spiked in recent years, Kumar said, disagreements between insurers and nursing home medical teams have increased. In addition, he said, insurers have hired companies, such as Tennessee-based naviHealth, that use data about other patients to help predict how much care an individual needs in a skilled nursing facility, based on her health condition. Those calculations can conflict with what medical teams recommend, he said.

For some Advantage plan members, going home is not practical or safe. 

UnitedHealthcare, which is the largest provider of Medicare Advantage plans, bought naviHealth in 2020.

Sumner said nursing homes are feeling the impact. “Since the advent of these companies, we’ve seen shorter lengths of stays,” she said.

In a recent news release, naviHealth said its “predictive technology” helps patients “enjoy more days at home, and health care providers and health plans can significantly reduce costs.”

UnitedHealthcare spokesperson Heather Soule would not explain why the company limited coverage for the members mentioned in this article. But in a statement, she said such decisions are based on Medicare’s criteria for medically necessary care and involve a review of members’ medical records and clinical conditions. If members disagree, she said, they can appeal.

When the patient no longer meets the criteria for coverage in a skilled nursing facility, “that does not mean the member no longer requires care,” Soule said. “That is why our care coordinators proactively engage with members, caregivers and providers to help guide them through an individualized care plan focused on the member’s unique needs.”

She noted that many Advantage plan members prefer receiving care at home. But some members and their advocates say that option is not always practical or safe.

Patricia Maynard, 80, a retired Connecticut school cafeteria employee, was in a nursing home recovering from a hip replacement in December when her UnitedHealthcare Medicare Advantage plan notified her it was ending coverage. Her doctors disagreed with the decision.

“If I stayed, I would have to pay,” Maynard said. “Or I could go home and not worry about a bill.” Without insurance, the average daily cost of a semiprivate room at her nursing home was $415, according to a 2020 state survey of facility charges. But going home was also impractical: “I couldn’t walk because of the pain,” she said.

It isn’t unusual for members of Medicare Advantage plans to have to file appeals repeatedly. 

Maynard appealed, and the company reversed its decision. But a few days later, she received another notice saying the plan had decided to stop payment, again over the objections of her medical team.

The cycle continued 10 more times, Krupa said.

Maynard’s repeated appeals are part of the usual Medicare Advantage appeals process, said Beth Lynk, a CMS spokesperson, in a statement.

When a request to the Advantage plan is not successful, members can appeal to an independent “quality improvement organization,” or QIO, that handles Medicare complaints, Lynk said. “If an enrollee receives a favorable decision from the QIO, the plan is required to continue to pay for the nursing home stay until the plan or facility decides the member or patient no longer needs it,” she explained. Residents who disagree can file another appeal.

CMS could not provide data on how many beneficiaries had their nursing home care cut off by their Advantage plans or on how many succeeded in getting the decision reversed.

To make fighting the denials easier, the Center for Medicare Advocacy created a form to help Medicare Advantage members file a grievance with their plan.

When UnitedHealthcare decided it wouldn’t pay for an additional five days in the nursing home for Christopherson, she stayed at the facility and appealed. When she returned to her apartment, the facility billed her nearly $2,500 for that period.

After Christopherson made repeated appeals, UnitedHealthcare reversed its decision and paid for her entire stay.

Loomis said her family remains “mystified” by her mother’s ordeal.

“How can the insurance company deny coverage recommended by her medical care team?” Loomis asked. “They’re the experts, and they deal with people like my mother every day.”

Your Medicare Drug Plan Can Hike Its Prices Almost Anytime

The prices quoted during open enrollment can climb dramatically 
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If you’re assuming that the prices on your drug plan’s list of medications won’t change over the course of the year, you may have an unpleasant surprise coming. They can and often do change. That’s allowed except during the first few weeks after the enrollment period ends. Journalist Susan Jaffe, a contributing writer for Kaiser Health News, explains the rules and their consequences here. KHN posted her story on May 3, 2022, and it also ran on NPR. Funding from the Silver Century Foundation helps KHN develop articles (like this one) on longevity and related health and social issues. 

Something strange happened between the time Linda Griffith signed up for a new Medicare prescription drug plan during last fall’s enrollment period and when she tried to fill her first prescription in January.

She picked a Humana drug plan for its low prices, with help from her longtime insurance agent and Medicare’s Plan Finder, an online pricing tool for comparing a dizzying array of options. But instead of the $70.09 she expected to pay for her dextroamphetamine, used to treat attention-deficit/hyperactivity disorder, her pharmacist told her she owed $275.90.

“I didn’t pick it up because I thought something was wrong,” said Griffith, 73, a retired construction company accountant who lives in the Northern California town of Weaverville.

“To me, when you purchase a plan, you have an implied contract,” she said. “I say I will pay the premium on time for this plan. And they’re going to make sure I get the drug for a certain amount.”

But it often doesn’t work that way. As early as three weeks after Medicare’s drug plan enrollment period ends on Dec. 7, insurance plans can change what they charge members for drugs—and they can do it repeatedly. Griffith’s prescription’s out-of-pocket cost has varied each month, and through March, she… paid $433 more than she expected to.

A recent analysis by AARP, which is lobbying Congress to pass legislation to control drug prices, compared drugmakers’ list prices between the end of December 2021—shortly after the Dec. 7 sign-up deadline—and the end of January 2022, just a month after new Medicare drug plans began. Researchers found that the list prices for the 75 brand-name drugs most frequently prescribed to Medicare beneficiaries had risen as much as 8 percent.

When insurers get discounts from drug companies, that doesn’t necessarily result in lower prices for consumers. 

Medicare officials acknowledge that manufacturers’ prices and the out-of-pocket costs charged by an insurer can fluctuate. “Your plan may raise the co-payment or coinsurance you pay for a particular drug when the manufacturer raises their price, or when a plan starts to offer a generic form of a drug,” the Medicare website warns.

But no matter how high the prices go, most plan members can’t switch to cheaper plans after Jan. 1, said Fred Riccardi, president of the Medicare Rights Center, which helps seniors access Medicare benefits.

Drug manufacturers usually change the list price for drugs in January and occasionally again in July, “but they can increase prices more often,” said Stacie Dusetzina, PhD, an associate professor of health policy at Vanderbilt University and a member of the Medicare Payment Advisory Commission. That’s true for any health insurance policy, not just Medicare drug plans.

Like a car’s sticker price, a drug’s list price is the starting point for negotiating discounts—in this case, between insurers or their pharmacy benefit managers and drug manufacturers. If the list price goes up, the amount the plan member pays may go up too, she said.

The discounts that insurers or their pharmacy benefit managers receive “don’t typically translate into lower prices at the pharmacy counter,” she said. “Instead, these savings are used to reduce premiums or slow premium growth for all beneficiaries.”

Medicare’s prescription drug benefit, which began in 2006, was supposed to take the surprise out of filling a prescription. But even when seniors have insurance coverage for drugs, advocates said, many still can’t afford them.

Insurers are replacing co-pays—which are set amounts—with coinsurance, which charges you a percentage of the price of the drug.

“We hear consistently from people who just have absolute sticker shock when they see not only the full cost of the drug but their cost sharing,” said Riccardi.

The potential for surprises is growing. More insurers have eliminated co-payments—a set dollar amount for a prescription—and instead charge members a percentage of the drug price, or coinsurance, Chiquita Brooks-LaSure, the top official at the Centers for Medicare & Medicaid Services [CMS], said in a recent interview with KHN. The drug benefit is designed to give insurers the “flexibility” to make such changes. “And that is one of the reasons why we’re asking Congress to give us authority to negotiate drug prices,” she said.

CMS also is looking at ways to make drugs more affordable without waiting for Congress to act. “We are always trying to consider where it makes sense to be able to allow people to change plans,” said Meena Seshamani, MD, CMS deputy administrator and director of the Center for Medicare, who joined Brooks-LaSure during the interview.

On April 22, CMS unveiled a proposal to streamline access to the Medicare Savings Program, which helps 10 million low-income enrollees pay Medicare premiums and reduce cost sharing. Enrollees also receive drug coverage with reduced premiums and out-of-pocket costs.

The subsidies make a difference. Low-income beneficiaries who have separate drug coverage plans and receive subsidies are nearly twice as likely to take their medications as those without financial assistance, according to a study Dusetzina co-authored for Health Affairs in April.

I finally just had to give in and pay it because I need the meds …

—Linda Griffiths

When CMS approves plans to be sold to beneficiaries, the only part of drug pricing it approves is the cost-sharing amount—or tier—applied to each drug. Some plans have as many as six drug tiers.

In addition to the drug tier, what patients pay can also depend on the pharmacy, their deductible, their co-payment or coinsurance—and whether they opt to abandon their insurance and pay cash. 

After Linda Griffith left the pharmacy without her medication, she spent a week making phone calls to her drug plan, pharmacy, Social Security and Medicare but still couldn’t find out why the cost was so high. “I finally just had to give in and pay it because I need the meds—I can’t function without them,” she said.

But she didn’t give up. She appealed to her insurance company for a tier reduction, which was denied. The plan denied two more requests for price adjustments, despite assistance from Pam Smith, program manager for five California counties served by the Health Insurance Counseling and Advocacy Program. They are now appealing directly to CMS.

“It’s important to us to work with our members who have questions about any out-of-pocket costs that are higher than the member would expect,” said Lisa Dimond, a Humana spokesperson. She could not comment about Griffith’s situation because of privacy rules.

However, Griffith said she received a call from a Humana executive who said the company had received an inquiry from the media. After they discussed the problem, Griffith said, the woman told her, “The [Medicare] Plan Finder is an outside source and therefore not reliable information,” but assured Griffith that she would find out where the Plan Finder information had come from.

She won’t have to look far: CMS requires insurers to update their prices every two weeks.

“I want my money back, and I want to be charged the amount I agreed to pay for the drug,” said Griffith. “I think this needs to be fixed because other people are going to be cheated.”

23 States Respond to COVID Deaths in Nursing Homes

They’ve drafted new laws to protect residents from isolation and neglect
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The appalling number of COVID deaths in nursing homes laid bare long-standing problems in those institutions that needed to be addressed. States with diverse political leadership have passed new laws in response. Reporting for Kaiser Health News, (KHN), journalist Susan Jaffe describes these developments. Her article was posted on the KHN website on August 20, 2021. The story also ran on USA Today. 

When the coronavirus hit Martha Leland’s Connecticut nursing home last year, she and dozens of other residents contracted the disease while the facility was on lockdown. Twenty-eight residents died, including her roommate.

“The impact of not having friends and family come in and see us for a year was totally devastating,” she said. “And then, the staff all bound up with the masks and the shields on, that too was very difficult to accept.” She summed up the experience in one word: “scary.”

But under a law Connecticut enacted in June, nursing home residents will be able to designate an “essential support person” who can help take care of a loved one even during a public health emergency. Connecticut legislators also approved laws this year giving nursing home residents free internet access and digital devices for virtual visits and allowing video cameras in their rooms so family or friends can monitor their care.

Similar benefits are not required by the Centers for Medicare & Medicaid Services [CMS], the federal agency that oversees nursing homes and pays for most of the care they provide. But states can impose additional requirements when federal rules are insufficient or don’t exist.

And that’s exactly what many are doing, spurred by the virus that hit the frail elderly hardest. During the first 12 months of the pandemic, at least 34 percent of those killed by the virus were residents of nursing homes and other long term care facilities, even though they make up fewer than 1 percent of the American population. The vaccine has since reduced virus-related, nursing home deaths to about 1 in 4 COVID-related fatalities in the United States, which have risen to more than 624,000, according to the New York Times’ coronavirus case tracker.

One nursing home resident stopped dialysis and gave up on living because he couldn’t stand the isolation of a COVID lockdown.

“Part of what the pandemic did is to expose some of the underlying problems in nursing homes,” said Nina Kohn, a professor at Syracuse University School of Law and a distinguished scholar in elder law at Yale Law School. “This may present an opportunity to correct some of the long-standing problems and reduce some of the key risk factors for neglect and mistreatment.”

According to a review of state legislation, 23 geographically and politically diverse states have passed more than 70 pandemic-related provisions affecting nursing home operations. States have set minimum staffing levels for nursing homes, expanded visitation, mandated access for residents to virtual communications, required full-time nurses at all times and infection control specialists, limited owners’ profits, increased room size, restricted room occupancy to two people and improved emergency response plans.

The states’ patchwork of protection for nursing home residents is built into the nation’s nursing home care regulatory system, said a CMS spokesperson. “CMS sets the minimum requirements that providers need to meet to participate with the Medicare/Medicaid programs,” he said. “States may implement additional requirements to address specific needs in their state—which is a long-standing practice—as long as their requirements go above and beyond, and don’t conflict with, federal requirements.”

Julie Mayberry, an Arkansas state representative, remembers a nursing home resident in her district who stopped dialysis last summer, she said, and just “gave up” because he couldn’t live “in such an isolated world.”

“I don’t think anybody would have ever dreamed that we would be telling people that they can’t have someone come in to check on them,” said Mayberry, a Republican and the lead sponsor of the No Patient Left Alone Act, an Arkansas law ensuring that residents have an advocate at their bedside. “This is not someone that’s just coming in to say hello or bring a get-well card,” she said.

Nursing homes with higher levels of staffing had fewer deaths from COVID. 

When the pandemic hit, CMS initially banned visitors to nursing homes but allowed the facilities to permit visits during the lockdown for “compassionate care,” initially, if a family member was dying and later for other emergency situations. Those rules were often misunderstood, Mayberry said.

“I was told by a lot of nursing homes that they were really scared to allow any visitor in there because they feared the state of Arkansas coming down on them and fining them for a violation” of the federal directive, she said.

Jacqueline Collins, a Democrat who represents sections of Chicago in the Illinois State Senate, was also concerned about the effects of social isolation on nursing home residents. “The pandemic exacerbated the matter and served to expose that vulnerability among our long term care facilities,” said Collins, who proposed legislation to make virtual visits a permanent part of nursing home life by creating a lending library of tablets and other devices residents can borrow. Gov. J.B. Pritzker is expected to sign the measure.

To reduce the cost of the equipment, the Illinois Department of Public Health will provide grants from funds the state receives when nursing homes settle health and safety violations. Last year, Connecticut’s governor tapped the same fund in his state to buy 800 iPads for nursing home residents.

Another issue states are tackling is staffing levels. An investigation by the New York attorney general found that COVID-related death rates from March to August 2020 were lower in nursing homes with higher staffing levels. Studies over the past two decades support the link between the quality of care and staffing levels, said Martha Deaver, president of Arkansas Advocates for Nursing Home Residents. “When you cut staff, you cut care,” she said.

The hodgepodge of state rules is a poor substitute for comprehensive, federal rules, rigorously enforced.

But under a 1987 federal law, CMS requires facilities only to “have sufficient nursing staff to attain or maintain the highest practicable … well-being of each resident.” Over the years, states began to tighten up that vague standard by setting their own staffing rules.

The pandemic accelerated the pace and created “a moment for us to call attention to state legislators and demand change,” said Milly Silva, executive vice president of 1199SEIU, the union that represents 45,000 nursing home workers in New York and New Jersey.

This year, states increasingly have established either a minimum number of hours of daily direct care for each resident, or a ratio of nursing staff to residents. For every eight residents, New Jersey nursing homes must now have at least one certified nursing aide during the day, with other minimums during afternoon and night work shifts. Rhode Island’s new law requires nursing homes to provide a minimum of 3.58 hours of daily care per resident, and at least one registered nurse must be on duty 24 hours a day every day. Next door in Connecticut, nursing homes must now provide at least three hours of daily direct care per resident next year, one full-time infection control specialist and one full-time social worker for every 60 residents.

To ensure that facilities are not squeezing excessive profits from the government payment they receive to care for residents, New Jersey lawmakers approved a requirement that nursing homes spend at least 90 percent of their revenue on direct care. New York facilities must spend 70 percent, including 40 percent to pay direct-care workers. In Massachusetts, the governor issued regulations that mandate nursing homes devote at least 75 percent on direct-care staffing costs and cannot have more than two people living in one room, among other requirements.

Despite the efforts to improve protections for nursing home residents, the hodgepodge of uneven state rules is “a poor substitute for comprehensive federal rules if they were rigorously enforced,” said Richard Mollot, executive director of the Long Term Care Community Coalition, an advocacy group. “The piecemeal approach leads to and exacerbates existing health care disparities,” he said. “And that puts people—no matter what their wealth, or their race or their gender—at an even greater risk of poor care and inhumane treatment.”