Hospitals in states with high COVID-19 case rates say restrictions set by Medicare Advantage plans are making it hard for them to discharge patients to other providers, exacerbating bed shortages.
The issue centers on the plans’ prior authorization requirements for post-acute care. Hospitals in states like Florida, Louisiana and Oregon say Medicare Advantage plans have always been slow to approve care, but the problem is especially harmful during the pandemic, when they need to free up beds for new patients as quickly as possible.
“It’s equally about that patient, but it’s also equally about that patient that needs that bed turned over,” said Dr. Robert Peltier, chief medical officer of North Oaks Health System in Hammond, Louisiana.
North Oaks is battling crises on two fronts: the pandemic and, as of this week, Hurricane Ida. On Tuesday afternoon, 70 patients were waiting to be seen at its main campus in the emergency department and another 20 were waiting to be admitted to beds.
“We are busting at the seams at this current time today,” Peltier said.
Some hospital associations have called on the Centers for Medicare and Medicaid Services to require the plans to waive any utilization management practices that delay patient transfers from hospitals to lower levels of care during the public health emergency. The agency hasn’t gone that far—it likely lacks the authority to do so—but it issued a memorandum on August 20 that “strongly encouraged” plans to waive or relax utilization management requirements to facilitate the movement of patients from acute-care hospitals to post-acute settings, like skilled nursing facilities, inpatient rehabilitation facilities, home health or long-term care hospitals.
Without a government mandate, hospitals say they’re left with a patchwork of policies. Many Medicare Advantage plans have agreed to suspend the restrictions, but they’re all doing it slightly differently and with different cut-off dates.
“The challenge when it is not being directed by a state or federal agency is you have significant variation from one plan to the next as to how they are providing the flexibility, which creates more confusion at a time when we need to minimize as much confusion as possible,” said Mary Mayhew, CEO of the Florida Hospital Association.
Medicare Advantage insurers like Humana and Florida Blue said they’ve temporarily suspended authorization requirements for post-acute settings. Humana’s lasts until September 17 with the potential for extension in Louisiana, and Florida Blue’s is indefinite. Several others, like Centene and UnitedHealthcare, did not respond to requests for comment.
Florida hospitals report surprisingly different experiences in this area. For AdventHealth, based in Altamonte Springs, the waivers some Medicare Advantage plans have implemented brings the transition time into post-acute care down to about 24 hours, Lisa Musgrave, vice president of home care administration and post-acute services, said in a statement.
“If the waiver goes away, we are concerned hospitals could return to seeing delayed transfers contribute to challenging capacity constraints,” she said.
At BayCare in Tampa, Florida, authorization has been waived for skilled nursing facilities, but not other types of post-acute care, spokesperson Lisa Razler wrote in an email.
Jason Lindsey, North Oaks’ case management director, said Medicare Advantage plans haven’t totally dismantled their prior authorization requirements, but it’s gotten better. During the pandemic, he said the health system averages five Medicare Advantage patients at a time waiting to be discharged to post-acute care. Before that, he guesses it was 10 to 15.
Even in cases where payers have suspended the requirements, the post-acute facilities still require authorization because Medicare Advantage hadn’t paid them in a timely way on previous patients, Lindsey said.
In Texas, Medicare Advantage plans have been reluctant to waive prior authorization requirements, particularly to long-term acute care hospitals, Carrie Williams, a spokesperson for the Texas Hospital Association, said. One plan, for example, requires 21 days’ notice before transferring patients LTACs. Even then, Williams said they’re seeing denials.
“This is particularly troubling given the extreme demand on staff and limitation on space due to COVID-19,” she said.
Oregon hospitals are struggling with discharge delays for a number of reasons, including Medicare Advantage prior authorizations, Becky Hultberg, CEO of the Oregon Association of Hospitals and Health Systems, said in a statement. The hospital association has been working on the issue for some time, including with the state’s governor and other regulators.
Research has consistently shown lower rates of utilization among Medicare Advantage patients compared with those covered under traditional Medicare. A 2019 study in the American Economic Journal: Applied Economics found that Medicare Advantage patients were much less likely to be discharged from hospitals to post-acute care and more likely to be discharged home than traditional Medicare patients. That study found overall Medicare Advantage spending was 30% less per beneficiary per month than traditional Medicare.
A 2020 Health Affairs study reached the same conclusion, finding that following hospitalizations for joint replacement, stroke or heart failure, Medicare Advantage enrollees were less likely than traditional Medicare enrollees to use both institutional post-acute care and home health care.
Part of the issue, at least for home health agencies, is Medicare Advantage doesn’t pay as well as other payers, so they decide it’s not worth the paperwork to accept those patients, said Laura Skopec, a senior research associate with the Urban Institute and an author on that and other research into Medicare Advantage utilization.
“We found that it’s not that Medicare Advantage is substituting certain kinds of post-acute care over others,” Skopec said. “There is less post-acute care in Medicare Advantage overall.”