(2023-03-13) Denied By Ai How Medicare Advantage Plans Use Algorithms To Cut Off Care For Seniors In Need

Denied by AI: How Medicare Advantage plans use algorithms to cut off care for seniors in need. *An algorithm, not a doctor, predicted a rapid recovery for Frances Walter, an 85-year-old Wisconsin woman with a shattered left shoulder and an allergy to pain medicine. In 16.6 days, it estimated, she would be ready to leave her nursing home.

On the 17th day, her Medicare Advantage insurer, Security Health Plan, followed the algorithm and cut off payment for her care, concluding she was ready to return to the apartment where she lived alone. Meanwhile, medical notes in June 2019 showed Walter’s pain was maxing out the scales and that she could not dress herself, go to the bathroom, or even push a walker without help.*

Health insurance companies have rejected medical claims for as long as they’ve been around. But a STAT investigation found artificial intelligence is now driving their denials to new heights in Medicare Advantage, the taxpayer-funded alternative to traditional Medicare that covers more than 31 million people.

Behind the scenes, insurers are using unregulated predictive algorithms, under the guise of scientific rigor

“While the firms say [the algorithm] is suggestive, it ends up being a hard-and-fast rule that the plan or the care management firms really try to follow,” said David Lipschutz, associate director of the Center for Medicare Advocacy

The predictions have become so integral to Medicare Advantage that insurers themselves have started acquiring the makers of the most widely used tools.

One of the biggest and most controversial companies behind these models, NaviHealth, is now owned by UnitedHealth Group. (United Healthcare)

It was NaviHealth’s algorithm that suggested Walter could be discharged after a short stay

spokesperson for the company said in a statement

“The tool is used as a guide to help us inform providers, families and other caregivers about what sort of assistance and care the patient may need both in the facility and after returning home.”

STAT’s investigation revealed these tools are becoming increasingly influential in decisions about patient care and coverage.

In interviews, doctors, medical directors, and hospital administrators described increasingly frequent Medicare Advantage payment denials for care routinely covered in traditional Medicare. Many said their attempts to get explanations are met with blank stares and refusals to share more information. The black box of the AI has become a blanket excuse for denials. “They say, ‘That’s proprietary,’” said Amanda Ford

The cost of caring for older patients recovering from serious illnesses and injuries, known as post-acute care, has long created friction between insurers and providers. For decades, facilities like nursing homes racked up hefty profit margins by keeping patients as long as possible — sometimes billing Medicare for care that wasn’t necessary or even delivered. Many experts argue those patients are often better served at home.

The enactment of the Affordable Care Act in 2010 created an opportunity for reform. Instead of paying for care after the fact, policy experts proposed flipping the payment paradigm on its head:

Tom Scully, the former head of the Centers for Medicare and Medicaid Services under George W. Bush, shared those concerns. But he also saw something else: a potential billion-dollar business

Scully drew up plans for NaviHealth just as the new law was taking effect

As a well-connected partner at the private equity firm Welsh, Carson, Anderson & Stowe, Scully heard of a small shop called SeniorMetrix that was working on this type of post-acute data and analytics.

He wrote a $6 million check to buy the company, which he rebranded to NaviHealth.

NaviHealth started making its sales pitch to Medicare Advantage plans: Let us manage every piece of your members’ care for the first 60 to 90 days after they are discharged from the hospital, and we’ll all share in any savings.

By summer 2015, NaviHealth was managing post-acute care for more than 2 million people whose insurance plans had contracted with the company.

in 2020, UnitedHealth — the largest Medicare Advantage insurer in the country — decided to make the hot commodity its own, buying NaviHealth in a deal valued at $2.5 billion.

Providers told STAT that as NaviHealth was changing hands and enriching its investors, they started noticing an increase in denials under its contracts

*Atrium Health’s Moore, who leads a team that specializes in reviewing medical necessity criteria, started taking a deeper look at the denials.

“It was eye-opening,” he said. “The variation in medical determinations, the misapplication of Medicare coverage criteria — it just didn’t feel like there [were] very good quality controls.”*

Between 2020 and 2022, the number of appeals filed to contest Medicare Advantage denials shot up 58%, with nearly 150,000 requests to review a denial filed in 2022

“NaviHealth will not approve [skilled nursing] if you ambulate at least 50 feet. Nevermind that you may live alon(e) or have poor balance,” wrote Christina Zitting

She added: “MA plans are a disgrace to the Medicare program, and I encourage anyone signing up..to avoid these plans because they do NOT have the patients best interest in mind. They are here to make a profit. Period.”

Federal records show most denials for skilled nursing care are eventually overturned

But even patients who win authorization for nursing home care must reckon with algorithms that insurers and care managers like NaviHealth use to help decide how long they are entitled to stay. Under traditional Medicare, patients who have a three-day hospital stay are typically entitled to up to 100 days in a nursing home

*Christine Huberty, a lawyer in Wisconsin who provides free legal assistance to Medicare beneficiaries. She said Medicare Advantage patients she represents rarely stay in a nursing home more than 14 days before they start receiving payment denials.

“But [the algorithm’s report] is never communicated with clients,” said Huberty, who often only finds the report after filing a legal complaint. “That’s all run secretly.”*

*NaviHealth has not published any scientific studies assessing the real-world performance of its nH Predict algorithm. And to the extent it tests its performance internally, those results are not shared publicly.

Additionally, regulators do not monitor these algorithms for fairness or accuracy.*