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What’s the Secret Bad News about Medicare Advantage Plans?

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October 27, 2022 •  Emily Hicks Law, PLLC
If you have a Medicare Advantage plan and require a brief stay at a nursing home or rehabilitation facility, you could be in for an unpleasant surprise, according to a Kaiser Health News report.

Medicare Advantage plans are increasingly pushing patients to leave nursing homes or rehabilitation facilities and return home before their medical team says they are ready.

Money Talks News’ recent article entitled “A Little-Known Downside of Medicare Advantage Plans” says that if this practice is as widespread as some suggest, the impact could be significant. Of the nearly 65 million people with Medicare coverage, half are enrolled in Medicare Advantage plans offered by private insurers rather than Original Medicare, which provides benefits directly from the government.

Kaiser Health News notes that both types of Medicare must cover 100 days of skilled nursing home care annually.

However, Medicare Advantage plans have more leeway in deciding when patients must be discharged from such care.

Sending patients home early has the potential to be lucrative for Medicare Advantage plans. According to the Kaiser Health News report:

“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.”

However, the situation becomes more complicated when you understand that while Medicare Advantage plans have a financial incentive to discharge patients quickly, nursing homes have an incentive to keep patients for as long as possible.

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, remarked, “Length of stay and occupancy are the main predictor of profitability, so they want to keep people as long as possible.”

As a general rule, Harrington says “people are probably better off at home.” However, she adds that “the resident ought to have some say about it.”

Kaiser Health News says the federal government recently signaled a desire to thwart the Medicare Advantage practice of sending patients home early. The Centers for Medicare & Medicaid Services put out a call for feedback from the public on various aspects of the Medicare Advantage program to assist with possible rulemaking.

Reference: Money Talks News (Oct. 7, 2022) “A Little-Known Downside of Medicare Advantage Plans”

Suggested Key Terms: Elder Law Attorney, Medicare Advantage, Paying for a Nursing Home, Assisted Living, Nursing Home Care

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