Southern Nevada Medicare Dilemma: Pay More or Switch Doctors

The recent decision by Southwest Medical Associates to stop covering traditional Medicare patients in Southern Nevada makes 66-year-old Anne Zarate sick to her stomach.

That queasy feeling is not just because, as the Las Vegas woman puts it, she’s being “thrown out with 7,000 others in a city where access to medical care is weak at best.” She also sees Southwest’s action as an example of the inability of government to deliver quality health care in the United States.

“What’s happening here in Las Vegas points to something much deeper than just what Southwest has done,” says Zarate, a retired medical assistant. “Government and the private sector should be able to get together to see to it that people can get thehealth care they need in a decent way. … We’re not talking about people going out and just buying tennis shoes.”

As first reported by the Las Vegas Review-Journal, Southwest, one of only two major providers for Southern Nevada seniors with traditional Medicare plans, has decided to withdraw from the market on Jan. 1. That will force 6,900 Southern Nevadans with the federal health insurance program for those 65 and older to either either switch to more-expensive Medicare Advantage plans or find new doctors.

Southwest, an affiliate of UnitedHealth Group’s OptumCare, will continue to offer two UnitedHealthcare Medicare Advantage plans. Those private insurance plans usually offer the hospital and medical insurance in the Medicare program along with prescription drug coverage and other extra options, including vision, hearing, dental and health and wellness plans.

People generally pay an additional premium for Advantage plans. The two UnitedHealth plans are issued through Senior Dimensions Southern Nevada and AARP.

HealthCare Partners Nevada, the only remaining major provider of traditional Medicare plans once Southwest completes its withdrawal, says it can handle Southwest’s traditional Medicare patients if they decide to switch providers.

Facing Justice Department suit

Southwest’s decision to drop traditional Medicare patients came as the UnitedHealth Group defends itself against a suit filed in May by the U.S. Justice Department over its Medicare Advantage plans.

That suit charges that UnitedHealth made patients appear sicker on paper than they really were — “upcoding” — to bilk the government out of billions: $3 billion from 2010 to 2015 alone. With Medicare Advantage patients, the government pays insurers a predetermined amount for each person enrolled based on insurer-supplied “risk scores,” rather than paying fees for service, as is done for traditional Medicare.

In an email, UnitedHealth spokesman Matthew A. Burns said the lawsuit is without merit: “We are confident our company and its employees complied with the government’s Medicare Advantage program rules. We reject these claims and are contesting them vigorously.”

Zarate has suspicions that the timing of Southwest’s decision to drop traditional Medicare patients is an “upsell” effort, noting that it occurred about a month before the open-enrollment period for Medicare Advantage plans, which runs from Oct. 15 to Dec. 7.

“If people buy one of their Medicare Advantage plans, that would be a way for them to keep their own doctor at Southwest,” Zarate observed. “They are trying to create their own exclusive medical facilities to create profit for their own parent companies.”

Kimberly Ware, who does consulting work in Nevada as a Medicare educator, agreed, calling Southwest’s action toward Medicare patients a legal form of extortion.

“The bottom line is pay up for Medicare Advantage and go on with your doctor or don’t pay up and don’t come back to us anymore.”

Company cites ‘better health outcomes’

In a statement, Southwest reported it made the change because “Medicare Advantage plans are better for our patients, with better coordinated care and better health outcomes.” It declined comment on whether the change would benefit its bottom line.

Research is divided on whether Medicare Advantage plans do produce better outcomes.

A 2016 study published by the National Bureau of Economic Research found that those who leave Medicare Advantage for traditional Medicare are more likely to suffer a preventable hospitalization or readmission to hospitals.

But a report released this spring by the Government Accountability Office found that people who are sicker sometimes drop out of the Advantage plans, citing difficulty getting access to “preferred doctors and hospitals.”

The GAO reviewed 125 Medicare Advantage plans and found that 35 of them had disproportionately high numbers of sicker people dropping out. The GAO said this data shows a need for more government oversight of Medicare Advantage plans.

Stephen Zuckerman, a senior fellow at the liberal Urban Institute think tank, said he would “absolutely assume” a health care provider such as Southwest decided to abandon traditional Medicare patients for “financial benefit.” He said a lack of transparency by providers makes it hard to know how extra profits could be realized, though he noted that Advantage plans require “less-complicated administration.”

According to Kaiser Family Foundation statistics, 35 percent of all Medicare beneficiaries in Nevada are enrolled in Medicare Advantage plans, with the percentage even higher — 40 percent — in Clark County. Today, 46 percent of all Medicare Advantage enrollees in Nevada are in plans operated by UnitedHealthcare.

Kirk Miller, chief operations officer of HealthCare Partners Nevada, said the company is already hiring more doctors and will accelerate that if a large number of Southwest patients change providers.

Zarate, who buys Medigap insurance to cover costs that her traditional Medicare doesn’t pay, including copayments and deductibles, said she plans to switch.

“How they did this wasn’t right at all — we don’t have a lot of time to really check out all our options,” she said of Southwest. “So I’m going to see what HealthCare Partners has to offer. Both my husband and mother like it, so I’ll check it out.”

Medicare’s cost, coverage

Medicare, the federal health insurance program for 57 million people ages 65 and over and younger people with permanent disabilities, helps to pay for hospital and physician visits, prescription drugs and other acute and post-acute care services.

Medicare plays a major role in the health care system, accounting for 20 percent of total national health spending in 2015, 29 percent of spending on retail sales of prescription drugs, 25 percent of spending on hospital care and 23 percent of spending on physician services.

In 2016, spending on Medicare accounted for 15 percent of the federal budget.

Source: Kaiser Family Foundation

What is Medigap?

A Medigap policy is health insurance sold by private insurance companies to fill the “gaps” in traditional Medicarecoverage. Medigap policies help pay some of the health care costs that traditional Medicare doesn’t cover.

Generally, when you buy a Medigap policy, you must have Medicare Parts A and B. You will have to pay the monthlyMedicare Part B premium. In addition, you will have to pay a premium to the Medigap insurance company. As long as youpay your premium, your Medigap policy is guaranteed to be renewable.

It’s important to compare Medigap policies. Because they must provide the same benefits, cost is generally the onlydifference between policies.

For more information on Medigap policies, call 1-800-633-4227 and request a free copy of “Choosing a Medigap Policy:A Guide to Health Insurance for People With Medicare.”

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