Medicare Advantage Denials: The Profit-Driven 'Care' That Isn't
A closer look at Medicare Advantage plans reveals a disturbing pattern of denying medically necessary care, contradicting promises of enhanced benefits for seniors.
The direct answer
New findings suggest that Medicare Advantage plans, often marketed as superior alternatives to traditional Medicare, may be systematically denying medically necessary care to seniors. This practice is reportedly driven by profit motives inherent in private insurance structures
Private insurance companies, including Medicare Advantage plans, are designed to generate profit. How do they do that? Take our our money and then deny our care. https://t.co/HKAqV917qn
— Social Security Works ❌👑 link
. A significant concern is the use of algorithms and prior authorization requirements, which can lead to denials for treatments that are essential for patient well-being. For instance, one investigation found that an AI system used by a major insurer had a reported 90% error rate in denying care to elderly patients
UnitedHealthcare built an AI system that denied care to elderly patients with a reported 90% error rate, and nobody faced criminal charges. According to findings from the U.S. Senate Permanent Subcommittee on Investigations, the company used an algorithm called “nH Predict” to…
— Viral Reel Addict link
. These denials can force seniors to delay or forgo crucial treatments, leading to poorer health outcomes and increased out-of-pocket expenses. The industry's focus on profitability, rather than patient necessity, is a critical issue for those relying on these plans for their healthcare needs
Health insurance companies prioritize profits, often at policyholders’ expense. A 2023 Kaiser Family Foundation study revealed that 1 in 5 insured adults faced a claim denial in the past year, while a U.S. House Committee investigation exposed insurers using AI tools to…
— 0️⃣BlackBetty ⚓️ link
.
The Profit Motive Behind Denials
Private insurance companies, including those administering Medicare Advantage plans, are fundamentally designed to generate profit. This profit motive can directly conflict with the goal of providing comprehensive healthcare. One way this conflict manifests is through claim denials. Sources indicate that insurance companies deny claims for various reasons, including administrative errors, but also when services are deemed not 'medically necessary'
Why medical insurance companies deny claims: "Medical insurance companies deny claims primarily due to administrative errors (incorrect coding, missing info), lack of prior authorization, services deemed not "medically necessary" or out-of-network provider usage. Nearly 1 in 5…
— AngryRed Inc link
. This framing allows insurers to cut costs by withholding payment for treatments that policyholders and their doctors believe are essential. Investigations have highlighted how insurers prioritize profits, sometimes leading to claim denials that place a significant burden on policyholders
Health insurance companies prioritize profits, often at policyholders’ expense. A 2023 Kaiser Family Foundation study revealed that 1 in 5 insured adults faced a claim denial in the past year, while a U.S. House Committee investigation exposed insurers using AI tools to…
— 0️⃣BlackBetty ⚓️ link
. The core issue is that the business model necessitates finding ways to manage costs, and denying care is a direct route to doing so.
AI and Algorithms: The New Gatekeepers of Care
The increasing reliance on artificial intelligence and complex algorithms by insurance companies has introduced a new layer of concern regarding claim denials. For example, UnitedHealthcare reportedly utilized an AI system called 'nH Predict' that allegedly had a 90% error rate in denying care to elderly patients
UnitedHealthcare built an AI system that denied care to elderly patients with a reported 90% error rate, and nobody faced criminal charges. According to findings from the U.S. Senate Permanent Subcommittee on Investigations, the company used an algorithm called “nH Predict” to…
— Viral Reel Addict link
. This suggests that automated systems, designed for efficiency and cost-saving, may be making critical healthcare decisions with alarming inaccuracy. The Centers for Medicare & Medicaid Services (CMS) Office of Healthcare Experience (parody account) notes that Medicare Advantage plans may charge the government more while simultaneously denying care, potentially using tools like prior authorizations and AI algorithms to achieve this
MedPac report details how Medicare Advantage plans charge the government 23% more than it would have cost to treat the same patients in traditional Medicare without gimmicks such as prior authorizations and "death" AI algorithms. That's page 26! Now, they deny 30-50% of care… https://t.co/anrkHYB7ea
— CMS Office of Healthcare Experience - Parody link
. This raises serious questions about the transparency and fairness of care decisions made by these automated systems.
The 'Not Medically Necessary' Loophole
A common reason cited for claim denials in Medicare Advantage plans is that the service or treatment is 'not medically necessary.' This subjective criterion can be a powerful tool for insurers to refuse coverage. ProPublica has investigated companies that assist major health insurers in denying coverage based on this very justification
“Not Medically Necessary”: Inside the Company Helping America’s Biggest Health Insurers Deny Coverage for Care https://t.co/9D1nDLaFnu
— ProPublica link
. For seniors, particularly those with complex or chronic conditions, this can create a labyrinth of appeals and rejections, potentially delaying or preventing vital treatments. The implication is that while traditional Medicare generally covers medically necessary services, Medicare Advantage plans may have a narrower, profit-driven interpretation of what qualifies, leaving seniors to navigate a system that may not prioritize their health needs
Private insurance companies, including Medicare Advantage plans, are designed to generate profit. How do they do that? Take our our money and then deny our care. https://t.co/HKAqV917qn
— Social Security Works ❌👑 link
.
Common mistakes
- Assuming all Medicare Advantage plans are the same.
While studies indicate a trend of denials, individual plan performance and policies can vary. Generalizing across all plans might oversimplify the issue and fail to capture nuances in coverage and denial rates. - Focusing solely on denial rates without context.
Denial rates can be influenced by factors beyond profit motives, such as coding errors or incomplete documentation. While profit is a significant driver, a comprehensive analysis would also consider these other contributing factors. - Ignoring the potential benefits of Medicare Advantage.
Some seniors do benefit from Medicare Advantage plans, which can offer additional benefits like dental, vision, and hearing coverage. Presenting a completely one-sided view might alienate readers who have had positive experiences.
UnitedHealthcare built an AI system that denied care to elderly patients with a reported 90% error rate, and nobody faced criminal charges. According to findings from the U.S. Senate Permanent Subcommittee on Investigations, the company used an algorithm called “nH Predict” to…
— Viral Reel Addict link
. This practice, which the industry attempts to disguise with terms like 'utilization management,' effectively means denying care
MedPac report details how Medicare Advantage plans charge the government 23% more than it would have cost to treat the same patients in traditional Medicare without gimmicks such as prior authorizations and "death" AI algorithms. That's page 26! Now, they deny 30-50% of care… https://t.co/anrkHYB7ea
— CMS Office of Healthcare Experience - Parody link
. Seniors enrolled in these plans deserve clear, unvarnished information about these risks.
Frequently asked
What is Medicare Advantage?
Medicare Advantage (Part C) is an alternative way to receive Medicare benefits. These plans are offered by private insurance companies approved by Medicare. They often include Part D prescription drug coverage and may offer extra benefits like dental, vision, and hearing care, but they can also have different rules for coverage and provider networks than traditional Medicare.
Why do Medicare Advantage plans deny care?
The primary reason cited is that the care is deemed 'not medically necessary' according to the plan's criteria. However, critics argue that profit motives drive these denials, as private insurers aim to manage costs and generate profit, sometimes by limiting coverage for treatments [c1, c3].
What can I do if my Medicare Advantage claim is denied?
You have the right to appeal. The denial letter should outline the appeal process. It's crucial to gather all relevant medical documentation and your doctor's support. You can also contact Medicare for assistance or consider seeking help from a patient advocacy group.
Sources
More from Health Policy → · Back to Perch · Browse all stories