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The effect of dropping doctors from Medicare Advantage plans

Shirie Leng, MD
Policy
June 26, 2014
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We all want the advantage.  We put our kids in special preschools so they have the advantage.  We work 100 hours a week so our kids can do 8 activities and get the advantage. Tall people have an advantage, we’re told.  Poor people are “disadvantaged.” Well folks, there are a whole bunch of senior citizens in Massachusetts who are about to get disadvantaged starting September 1.

UnitedHealthcare (UHC) will be cutting 700 doctors, or 2 to 4% of it’s providers (it has 18,600 in MA), from it’s Medicare Advantage plans. UHC is a mammoth national insurance company, and one of the main things it does is provide Medicare Advantage programs.  In fact, it’s the largest provider of such private Medicare plans in the country.  It has done this in 11 other states as well, and in some cases has dropped whole hospitals from it’s roster.

Why?  Company spokespeople say“they hope that streamlining the pool of doctors will not just save money but ultimately improve the quality of patient care.”  They do not specify how quality of patient care will be improved by abruptly removing patients’ doctors from their insurance plans.  But it will definitely save money.  And why does UHC feel it has to save money?  Because there has been a gradual reduction in the federal reimbursements to private Medicare contractors.

Why is the government using private, for-profit companies to provide Medicare services, and paying up to 14% more for the identical services provided by government-administered Medicare?  Excellent question.  Medicare Advantage, so-called because these plans generally cover more services, like eyeglasses and prescriptions, was created after private insurers insisted that not only could they meet the medical needs of senior citizens and the disabled more cost effectively than the government, they could do so and still make a profit. It became part of the Balanced Budget Act of 1997, but such plans have been available since the 1970s.

Well, it turned out that the claims were not true, and many of the private companies that participated dropped out when they lost money.  So the government essentially paid the companies to stay. Hence the 14% overpayment.

So, lot’s of money to be made. 15 million people are in Medicare Advantage plans, with payments from the government of $156 billion dollars, or 30% of all Medicare spending.  But you make more money for your shareholders if your patients don’t go to the doctor.  UHC cleared $1.1 billion dollars last year and increased it’s shareholder dividends by 30%.

Recently, UHC informed a bunch of doctors in Massachusetts that they’ve been booted from the plan.  They’ll tell the patients this week. Oh, and the changes go into effect September 1st but you can’t change your plan until the next open enrollment period, which isn’t until October.

When UHC tried this in Connecticut, county medical associations filed a lawsuit and got a temporary injunction from a judge to stop UHC from dropping 2,200 doctors.  Here’s what UHC had to say about this ruling, according to the CT Mirror:

In its statement, UnitedHealthcare said the ruling would “create unnecessary and harmful confusion and disruption to Medicare beneficiaries in Connecticut.  We continue to have a broad network of doctors that is designed to encourage higher quality, affordable health care coverage,” the statement said. “We know that these changes can be concerning for some doctors and customers, and supporting our customers is our highest priority.”

Right.  Because there’s no unnecessary and harmful confusion or disruption when you eliminate patients’ doctors.

Shirie Leng, a former nurse, is an anesthesiologist who blogs at medicine for real.

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