Senators probing largest Medicare Advantage plans over how algorithms factor in care denials

Senators warned the country’s largest Medicare Advantage insurers at a hearing on Wednesday that they must abide by Medicare’s coverage rules and cannot rely on algorithms to deny care that patients need.

Congress is ramping up its oversight, too. Lawmakers in both parties have asked UnitedHealth Group, Humana, and CVS Health’s Aetna for internal documents that “will show how decisions are made to grant or deny access to care, including how they are using [artificial intelligence],” said Sen. Richard Blumenthal, the top Democrat on a subcommittee with the power to investigate government affairs, during the hearing.

“I want to put these companies on notice,” said Blumenthal (D-Conn.). “If you deny life-saving coverage to seniors, we are watching. We will expose you. We will demand better. We will pass legislation if necessary. But action will be forthcoming.”

The hearing comes on the heels of a STAT investigation that found Medicare Advantage insurers are routinely relying on proprietary algorithms as a basis for denying care. Instead of using the technology as a guide for a Medicare patient’s care in a nursing home or rehab facility, many Medicare Advantage plans are using it as a hard-and-fast rule to avoid paying for care and to discharge patients home as soon as possible — even if patients are not ready.

Patients often have no idea an algorithm is being used in the denial process, and they face thousands of dollars in costs if they decide to pay for the care on their own. In addition, if they and their families decide to appeal a denial, they could be trapped in weeks, months, or even years of paperwork and bureaucracy.

UnitedHealth confirmed it received a letter but declined to comment further. Humana and CVS did not immediately respond to questions from STAT.

Christine Huberty, an attorney in Wisconsin who provides free legal assistance to Medicare beneficiaries and who was cited in STAT’s story, testified Wednesday there has been a deluge of algorithmically generated denials from Medicare Advantage plans.

“Our agency has become overwhelmed with these cases to the point that we’ve started turning them away,” Huberty said. She added the denials and appeals process is a “maze of red tape” that puts sick and injured seniors “up against an impossible system.”

The denials usually originate from third-party firms that either contract with insurers or are now owned by insurers, such as NaviHealth. Gloria Bent, another witness at the hearing, ran into a NaviHealth denial with her husband, Gary, who was insured by a Medicare Advantage plan and recently died after his melanoma came back.

Gary underwent a surgery to remove a lesion on his brain and came out with “significant cognitive and mobility deficits,” Bent said. His neurosurgeon recommended intensive rehab services, nursing care, and therapies, but NaviHealth denied those services and instead transferred Gary to a short-term facility.

A NaviHealth care coordinator then called Bent and told her that her husband would be discharged in a little more than two weeks. The coordinator “strongly suggested that we consider he would be permanently wheelchair-bound, and therefore highly recommended a skilled nursing facility, self-pay,” Bent said in her testimony. “And if I lived in a home that was not handicapped accessible, which ours wasn’t, then I needed to move.”

“This should not be happening to families and patients. It’s cruel,” Bent said. “Why are people who are looking at patients only on paper or through the lens of an algorithm making decisions that deny the services judged necessary by health care providers who know their patients?”

Although the senators who appeared in the hearing agreed Medicare Advantage denials are a problem, especially for people facing serious illnesses and injuries, they didn’t necessarily agree on a solution.

The federal agency that oversees Medicare issued new regulations in April that said Medicare Advantage plans “must ensure that they are making medical necessity determinations based on the circumstances of the specific individual … as opposed to using an algorithm or software that doesn’t account for an individual’s circumstances,” the regulations state. However, Blumenthal was concerned insurers are already struggling to comply with existing Medicare coverage laws.

“A new rule is only as good as they’re willing to change their real-world practices,” Blumenthal said.

Despite the prevalence of algorithms being used in the process of care denials, Republicans didn’t appear eager to touch how Medicare Advantage plans operate. Sen. Ron Johnson, the subcommittee’s top Republican, took up arguments that health insurance companies often espouse — namely, that hindering insurers’ ability to manage care will force them to cut benefits or raise premiums. Johnson warned that if Congress restricted Medicare Advantage plans’ ability to issue prior authorizations and deny care, it would come at a cost.

“Either the cost to the taxpayer could go up pretty dramatically, or Medicare Advantage plans would have to pare back in terms of [the supplemental benefits] they cover,” Johnson said. “I would think those are two of the most likely scenarios, correct?”

“I would say that both of those things would happen,” said Lisa Grabert, a health care professor at Marquette University and a former Republican aide in Congress.

This story is part of a series examining the use of artificial intelligence in health care and practices for exchanging and analyzing patient data. It is supported with funding from the Gordon and Betty Moore Foundation.