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> Problems With Medicare Advantage
> Mass. Occupancy Rate
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MONDAY REPORT

Medicare Advantage Roadblocks Continue for Patients and Hospitals

A subset of Massachusetts hospitals that MHA surveyed throughout 2024 reported numerous violations among Medicare managed care plans, resulting in delayed patient care and care team frustrations.

In April 2023, the Centers for Medicare & Medicaid Services (CMS) made final changes to the Medicare Advantage and Medicare Prescription Drug Benefit Program for Contract Year (CY) 2024. The final rule, which became effective January 1, 2024, “increases oversight of Medicare Advantage (MA) plans and seeks to better align MA coverage with traditional Medicare.” It is intended to give patients additional protections by streamlining prior authorization requirements and by ensuring they receive the same access to medically necessary care as they would under traditional Medicare.

While MHA and other provider interests expressed relief with the rule’s effort to hold MA plans accountable, they nonetheless said the rule did not go far enough in reining in the insurers.

In an effort to track compliance with CMS’s new rule, MHA developed a survey tool and asked hospitals to report on their dealings with the plans. Nine responding hospitals across Massachusetts reported 61 violations from five Medicare Advantage plans over an 11-month period, with United Healthcare (including AARP Medicare Advantage) accounting for 63% of all violations.

Approximately 43% of the reported violations concern the Medicare “two-midnight rule” that applies to inpatient hospital admissions where the patient is reasonably expected to stay at least two midnights. This is an important distinction because it determines the point at which Medicare considers the visit to be an “inpatient” stay – and, thus, the amount of the patient’s out-of-pocket costs as well as the hospital’s reimbursement. The rule does not strictly require the patient to spend two midnights in the hospital. Instead, it relies on the physician’s expectation that the patient would likely stay in the hospital for two midnights based on the natural course of disease management. Through the MHA survey, hospitals report numerous instances when the insurance companies failed to classify an admission as inpatient even when the stay met relevant criteria; these denials affected both hospital payment and patient cost sharing. Other serious violations occurred when the insurer denied a service that would have been covered under traditional Medicare, or when prior authorization requirements were imposed when they would not have been required under traditional Medicare.

While care denials often result in a patient’s physician engaging in a “peer-to-peer” discussion with a clinician from the health insurer, the survey showed that some Medicare Advantage plans do not allow or significantly delay such discussions.

“We experienced significant delay days waiting for insurance company approval for a skilled nursing home and acute rehab,” one survey respondent wrote. “If the request is not approved and the patient appeals, the plan takes up to 72 hours to make their determination. Then when the hospital appeals the delay days as it awaits a response from the payer, the insurer will deny these days as the hospital did not discharge the patient when they were medically ready!”

“These compliance factors exacerbate the capacity crisis hospitals are facing and harm patients by delaying transitions of care from acute to post-acute settings,” said Karen Granoff, MHA’s senior director of managed care. “The Medicare Advantage plans prevent patients from getting care that would be provided under traditional Medicare, pose unnecessary administrative burdens on clinical staff, and deny payment for hospital services provided in good faith.”

In Washington, Medicare Advantage plans have come under increasing criticism from both Democrats and Republicans.

Study: U.S. Heading Towards Occupancy Crisis, Mass. Already There

A recent study in JAMA Network Open warns that the nation is heading towards a hospital bed shortage – but in Massachusetts the average hospital bed occupancy rate has already passed the threshold of concern.

Using data from mandated occupancy reporting that was in effect during the pandemic from August 2020 to April 2024, researchers at UCLA Health determined average U.S. hospital occupancy and posited what to expect as the population ages over the next 10 years.

“The US has achieved a new post-pandemic hospital occupancy steady state 11 percentage points higher than it was pre-pandemic,” the researchers wrote. Pre-pandemic, about 64% of beds were occupied; in the year following the end of the COVID-19 public health emergency, the average occupancy was 75%. “This persistently elevated occupancy appears to be driven by a 16% reduction in the number of staffed U.S. hospital beds rather than by a change in the number of hospitalizations.”

In Massachusetts, however, the mean occupancy rate as of April 2024 was about 85%, which is the percentage the national hospital occupancy rate is expected to reach in 2032. That would constitute a national bed shortage, the researchers say. The Massachusetts average occupancy rate during the study period was the second highest in the country, trailing only Rhode Island’s 88% occupancy.

However, the current occupancy numbers as submitted by all hospitals into the DPH Web EOC system show nearly all areas of the state are experiencing occupancy rates of 90%, or above. Metro Boston and Metro West hospitals, and those in the Northeast and Southeast are experiencing medical/surgical bed occupancy rates of 92%, 90%, 96%, and 93%, respectively. The commonwealth’s Central and Western hospitals report 87% and 86% occupancy, respectively.

As of February 15 in Massachusetts, all but one region of the state reported ICU occupancy at or exceeding 82%, with Central Massachusetts facilities reporting ICU bed occupancy at a very concerning 96%.

“A national hospital occupancy of 75% is dangerously close to a bed shortage because it does not provide enough of a buffer against factors such as daily bed turnover, seasonal fluctuations in hospitalizations, and unexpected surges,” according to a media release accompanying the study. “According to the CDC, when national ICU occupancy reaches 75%, there are 12,000 excess deaths two weeks later.”

Annual hospitalizations will rise, the researchers say, as the population ages. Over the next decade, annual hospitalizations should increase from about 36.2 million a year to 40.2 million.

“Experts in developed countries have posited that a national hospital occupancy of 85% constitutes a hospital bed shortage (a conservative estimate); our findings show that the US could reach this dangerous threshold as soon as 2032, with some states at much higher risk than others,” according to the study. “These scenarios suggest that an increase in the staffed hospital bed supply by 10%, reduction in the hospitalization rate by 10%, or some combination of the two would offset the aging-associated increase in hospitalizations over the next decade.”

In 2024, MHA released an “Inside the Healthcare Crisis” report that highlighted troubling occupancy trends and the many factors that are intertwining to create the strains patients and providers are experiencing today. That report found that the number of staffed medical-surgical beds in the state had decreased by 9% in just three years, while aggregate occupancy among those beds had grown by 8%. Staffed ICU beds, meanwhile, had decreased by 16% and ICU occupancy had grown by 5%.

In Massachusetts, efforts are underway to increase the supply of healthcare workers, ease care transitions between acute and post-acute facilities, construct new facilities, and undertake innovative strategies such as hospital at home to lessen the capacity crisis.

“Our study was not designed to investigate the cause of the decline in staffed hospital beds, but other literature suggests it may be due to healthcare staffing shortages, primarily among registered nurses, as well as hospital closures partially driven by the practice of private equity firms purchasing hospitals and effectively selling them for parts,” said Dr. Richard Leuchter, assistant professor of medicine at the David Geffen School of Medicine at UCLA and the study’s lead investigator.

Children with Flu and Neurological Complications

The Department of Public health (DPH) has sent a clinical advisory noting that “Massachusetts clinicians treating children have observed a possible increase in the number of cases of children with influenza with neurologic complications compared to prior seasons.” Similar increases have been observed in other parts of the U.S.

DPH did not posit why such cases are occurring but noted that the state is currently experiencing high rates of influenza, which could lead to higher than normal cases with complications.

DPH suggests a series of clinical responses, including ensuring that all children aged six months and older are vaccinated against the flu. The state is also requesting prompt reporting of all cases in patients less than age 21 with onset neurological symptoms and positive influenza testing.

Transitions

Tenet Healthcare has named Denten Park as the CEO of its Massachusetts Market and also of Saint Vincent Hospital in Worcester and Tenet’s MetroWest Medical Center, which is comprised of both the Natick and Framingham campuses. Park comes from Community Health Systems where he held leadership roles including Market CEO of multi-hospital systems as well as more recently as Project President and CEO. He holds an MBA from New Mexico State University and a bachelor’s degree from Utah State University.

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Carole Billington, R.N., has been named president and chief nursing officer of Saint Anne’s Hospital in Fall River. Saint Anne’s is part of Brown University Health. Billington has been with Saint Anne’s Hospital for many years, most recently serving as interim president and CNO since September 2024. She holds a Bachelor of Science degree in nursing from the University of New Hampshire and a Master of Science in nursing from the University of Massachusetts-Dartmouth.

John LoDico, Editor