Insurance companies that run Medicare Advantage plans were overpaid by as much as $3.1 billion in 2010, according to a report by the Government Accountability Office.

Medicare Advantage plans receive payments from Medicare for each person enrolled with them.  In Arizona, the payments start at around $800 per month per person. Medicare Advantage plans also receive additional payments for members who have health problems and cost the plan more money.  This is called “risk adjustment”.  Apparently there were some miscalculations (by the government or by the plans?) and so Medicare paid out billions of dollars in overpayments to Advantage plans in 2010.

A Bloomberg news report on the overpayments included the following paragraph:

Medicare Advantage patients often receive superior care to those in traditional Medicare, so “conclusions about whether the MA payment system appropriately pays plans should therefore not be based on GAO’s analysis,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a Washington trade group, in an e-mail.

A false statement:

“Medicare Advantage patients often receive superior care to those in traditional Medicare, ….”

Where did that line originate? Was it the reporter or the spokesperson for the insurance trade group? There may be a few Advantage plans that provide “superior care”, but not many – and that statement is false and misleading.

Most Medicare Advantage plans are just insurance companies that pay bills.  They don’t offer any “superior care”, they just pay the doctors, hospitals, labs and other providers.  Advantage plans are known as “coordinated care plans”, but this is mainly because they have a defined network of providers and their members must get a referral from their primary care physician.  In fact, Advantage plans routinely refuse tests and services ordered by doctors because a panel of experts employed by the plan have deemed the service to be unnecessary – decisions doctors can and do dispute.

According to the Bloomberg article:

Enrollment in Advantage plans was about 11 million people in 2010, or about 24 percent of total Medicare beneficiaries, according to the Kaiser Family Foundation, a nonprofit research group in Menlo Park, California. The U.S. paid about $114 billion to Advantage plans in 2010, according to the GAO. Medicare cost an estimated $525 billion, according to the Centers for Medicare and Medicaid Services.

In Arizona, enrollment in Medicare Advantage is quite high among people covered by Medicare:  Maricopa County: 44%; Pima County: 45; Pinal county: 49%

By David Sayen, Medicare Regional Administrator

Medicare covers a variety of heath care services that you can receive in the comfort and privacy of your home. These include intermittent skilled nursing care, physical therapy, speech-language pathology services, and occupational therapy.

Such services used to be available only at a hospital or doctor’s office. But they’re just as effective, more convenient, and usually less expensive when you get them in your home.

If you get your Medicare benefits through a Medicare Advantage health plan (instead of Original Medicare), check with the plan for details about how it provides your Medicare-covered home health benefits.

To be eligible for home health services, you must be under a doctor’s care and receive your services under a plan of care established and reviewed regularly by a physician. He or she also needs to certify that you need one or more home health services.

In addition, you must be homebound and have a doctor’s certification to that effect. (Being homebound means leaving your home isn’t recommended because of your condition, or your condition keeps you from leaving without using a wheelchair or walker, or getting help from another person.) Also, you must get your services from a home health agency that is Medicare-approved.

If you meet the criteria, Medicare pays for covered home health services for as long as you’re eligible and your doctor certifies that you need them.

Skilled nursing services are covered when they’re given on a part-time or intermittent basis. In order for Medicare to cover such care, it must be necessary and ordered by your doctor for your specific condition. You must not need full-time nursing care.

Skilled nursing services are given by either a registered nurse or a licensed practical nurse under an RN’s supervision. Nurses provide direct care and teach you and your caregivers about your care. Examples of skilled nursing care include: giving IV drugs, shots, or tube feedings; changing dressings; and teaching about prescription drugs or diabetes care. Any service that could be done safely by a non-medical person (or by yourself) without the supervision of a nurse, isn’t skilled nursing care.

Physical therapy, occupational therapy, and speech-language pathology services have to be specific, safe, and effective treatments for your condition.

Before your home health care begins, the home health agency should tell you how much of your bill Medicare will pay. The agency should also tell you if any items or services they give you aren’t covered by Medicare, and how much you’ll have to pay for them. This should be explained by both talking with you and in writing. The agency should give you a notice called the Home Health Advance Beneficiary Notice (HHABN) before giving you services and supplies that Medicare doesn’t cover.

What isn’t covered? Some examples:

• 24-hour-a-day care at home;
• Meals delivered to your home;
• Homemaker services like shopping, cleaning, and laundry (when this is the only care you need, and when these services aren’t related to your plan of care);
• Personal care given by home health aides like bathing, dressing, and using the bathroom (when this is the only care you need).

If your doctor decides you need home health care, you can choose from among the Medicare-certified agencies in your area. (However, Medicare Advantage plans may require that you get home health services only from agencies they contract with.)

One good way to look for a home health agency is by using Medicare’s “Home Health Compare” web tool, at www.medicare.gov/HHCompare. This tool lets you compare home health agencies by the types of services they offer and the quality of care they provide.

For more details on Medicare’s home health benefit, please read our booklet, “Medicare and Home Health Care.” It’s online at http://www.medicare.gov/publications/pubs/pdf/10969.pdf.

David Sayen is Medicare’s regional administrator for California, Arizona, Nevada, Hawaii, and the Pacific Trust Territories.

Most older Americans (63%) are very worried they won’t be able to pay for their medical care as they age, according to a report by The Insured Retirement Institute (IRI).  From information contained in the report, we should be worried.

According to an article in LifeHealthPro which reviewed the IRI report, people on Medicare can expect to spend well over $350,000 on their medical care and insurance premiums during their retirement years.

The LifeHealthPro article highlighted some of the findings in the IRI report:

● For 2012, Medicare Part B premiums will account for 8.2% of the average Social Security benefit, up from 5.1% in 2000.

● While the average Social Security check is 31% higher than it was in 2001, premiums for Medicare Part B have doubled.

● While 63% of all boomers lack confidence in their ability to cover medical expenses in retirement, the concern is most pronounced among younger boomers: 72% percent of boomers ages 50-54 are concerned about their ability to cover medical costs in retirement.

The full IRI report can be found here.

I recently wrote about my trip to Ireland and Northern Ireland where government health care systems cover most medical costs for older citizens. Losing their life savings to pay for health care is not an issue for most people in Ireland – or Europe. Health care costs are going up across the pond, but not as much as in the United States.  This comes back to the question I have asked before:  How much can older Americans be expected to pay for their Medical care? I guess that’s the trillion dollar question.