Monday, July 24, 2017

Nursing Homes Selling Insurance - What Could Go Wrong?

According to an article by Jordan Rau, writing for Kaiser Health News ("KHN"),nursing home companies have begun selling their own private Medicare insurance policies. Pledging close coordination between caregivers and institutions, and promising to give clinicians more authority to decide what treatments they will cover for each patient, these plans are marketed to seniors likely to or already requiring long term care.  These plans are recent additions to the Medicare Advantage market, where private plans have become an increasingly popular alternative to traditional fee-for-service coverage. There are currently nearly 18 million enrollees in the overall Medicare Advantage market. 

Medicare pays private insurers a set amount to care for each beneficiary. In theory, this payment method gives the insurers motivation to keep patients from needing costly medical services such as hospitalizations.Unlike other plans, these alternate policies offered by long-term care companies often place a nurse in the skilled nursing facility or retirement village, where they can talk directly to staff and assess patients’ conditions. Some provide primary care doctors and nurses to residents in the homes or in affiliated assisted living facilities or retirement villages with the aim of staving off hospitalizations. According to Advantage proponents, this model offers patients a more individualized approach to their care. 

Supporting the use of Advantage plans sold by nursing homes, Angie Tolbert, a vice president of quality at PruittHealth, which began offering its plan to residents in 10 of its nursing homes in Georgia last year, told KHN that:

“[t]he traditional model is making decisions based on paper, and in our model, these decisions are being made by clinicians who are really talking to the staff and seeing the patient. It’s a big shift in mindset.”
“There’s a conflict there,” Toby Edelman, a senior attorney with the Center for Medicare Advocacy told KHN.  Attorney Edelman should know; she has spent a career advocating on behalf of the elderly.  

An insurance agent represents the insurance company.  When disputes arise between the insurance company, the health care provider, and the insured, the agent is typically in the corner of the insured.  At a minimum, the agent's duty is to the insured vis-à-vis the health care provider.  In this most recent development in the insurance market, the agent works for both the insurance company and the health care provider. Where do the loyalties and duties of an agent employed by the health care provider lie in payment and coverage disputes? 

In addition, given that both insurance companies and health care providers may support low cost modalities offered by the provider rather than those offered by others, will these cheap substitutes be provided when they do not necessarily serve the interest of the insured patient?  Collusion between insurance company and health care provider regarding cost can impact quality of care.  If anything, health care providers are accused of recommending expensive unnecessary tests and treatments, but what if they are necessary and unavailable through the provider; will they still be recommended?  Might both collude to provide less expensive alternatives offered by the provider rather than better, more expensive services offered by third parties?    

In the real world, these complexities are causing some to doubt the advantages of the arrangement.  KHN reported regarding some patients who are in disputes with the insurers who have faulted the nursing home staff — who work for the same company — for not helping challenge decisions about coverage:
They complain that the company holds an unfair advantage over Medicare beneficiaries.
In an Erickson Living retirement village in Silver Spring, Md., Faith Daiak signed up for an Erickson Advantage plan sold by a nurse whose office was in the main village building, according to her son, J.J. Daiak. After a bout with the flu last February weakened her enough to need a 10-day hospitalization, she was sent to her village’s skilled nursing facility. There, the insurer repeatedly tried to cut short her stay.
Erickson Advantage first said it would stop paying for Daiak, 88, because she wasn’t getting healthier in the nursing facility. Her son appealed by pointing out that Medicare explicitly said as part of the 2014 settlement of a class-action lawsuit that patients do not have to be improving to qualify for skilled nursing care.
Daiak’s appeal was denied, but the issue was sidelined in March when her rapid weight loss in the nursing home sent her back to the hospital, he said.

After Daiak returned to the nursing home with a feeding tube in her stomach, the insurer again tried to curtail her time there, saying she did not need that level of care. The family successfully appealed that decision after noting that Medicare’s manual said feeding-tube maintenance required the skilled care of a nursing facility.
In April, Erickson Advantage again said it would not continue paying for Daiak’s stay. It reversed that decision after Kaiser Health News asked the company about the case, J.J. Daiak said. He said the plan did not explain its turnaround.

While this Medicare Advantage plan touts its “team that knows you personally and wants to help,” J.J. Daiak said he found the registered nurse at Erickson’s Silver Spring community not helpful. “All I see is her trying to get Erickson out of having to pay for the nursing home,” he said. He subsequently switched his mother to traditional Medicare coverage with a supplemental Medigap policy, which she had until this year.
Erickson Living, the parent company of the nursing home and insurer, declined to discuss individual cases but noted that Medicare has given its insurance plans the best quality rating of five stars. In a written statement, the company said that “medical service determinations for Erickson Advantage members are based on reviews by licensed clinical staff and clinical guideline criteria. Our primary focus is always on ensuring that the healthcare being provided for our residents matches a patient’s needs and established clinical treatment protocols.”
Edelman said the dispute was particularly troubling because Erickson’s retirement villages are marketed on the promise that the company will care for seniors in all stages of aging. “They don’t tell you what they won’t pay for,” she said.
Will nursing homes be able to evaluate properly the competence of  a consumer, or will they sell policies to those too diminished to understand fully the policies or their implications? Will consumers feel pressure to purchase policies, worried that nursing homes mght dump them as residents if the policies are rejected?  Will nursing home agents dissuade patients from superior alternatives that may separate the patient from the nursing home, or from the insurance company?  Will nursing homes seek reimbursement for services based upon profitability rather than necessity?  Why can't nursing homes work with insurance companies for better quality care without demanding the additional compensation that comes from sale of the policies?  

This writer would take more seriously pledges and promises if they were not ransomed for additional profit.  Why should consumers pay nursing homes more for care that they should already be receiving?

Conflicts of interest may not always be improper, and may not lead to improper decisions, but always have at least the appearance of impropriety. Consumers deserve better than the "appearance of impropriety" at the inception of a relationship.   This writer recommends that every consumer reject these arrangements.   

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