UnitedHealthcare is cutting back on the number of providers in its Medicare Advantage network, which could give patients little time to decide whether they want to change their Medicare insurer or change their doctor.
The insurer began notifying doctors in early October that it was terminating their contracts, without giving a reason for the change.
The move prompted concern from the state’s largest doctors’ group, the Medical Society of New Jersey, which says the changes could affect some UnitedHealthcare members’ access to care.
But a spokeswoman for the insurer said UnitedHealthcare will maintain one of the largest Medicare Advantage networks and is notifying members whose doctors are being dropped of what options are available to them.
Nationally, the company is terminating 10 percent to 15 percent of doctors from its Medicare Advantage networks.
MSNJ general counsel Melinda Martinson said patients will have a limited time to make a decision about their healthcare before the annual Medicare open enrollment period ends on December 7. This period began on October 15.
“Our advice to Medicare beneficiaries would be to reach out to UnitedHealthcare” and ask that their doctors be kept in the network, Martinson said.
In Medicare Advantage plans, the federal government pays private insurers to contract with healthcare providers for their services. It serves as an alternative to traditional Medicare, in which providers are paid directly by the government for each service patients receive.
Private Medicare plans were established in 1976 with a goal of seeing whether private insurers could provide higher quality, more efficient care than the government. Their effectiveness has been debated ever since. While the federal payments to the private plans were originally limited so that they were lower than the average cost for traditional Medicare beneficiaries, over time they grew to be more than 10 percent higher.
While the private plans must offer benefits similar to those of traditional Medicare, they have some flexibility in what they offer, such as lower monthly premiums when compared with the premiums for traditional Medicare Part B, which covers doctor and outpatient hospital visits, as well as medical supplies. The range of benefit packages has been used by insurers to attract patients and led doctors to contract with the plans. Individual members have cited the lower premiums in choosing the plans.
The 2010 Affordable Care Act reduced the gap between Medicare Advantage and traditional Medicare per-patient costs. In response to insurance industry criticism of these reductions, federal officials have instituted a program paying insurers bonuses to offer high-quality plans. However, insurers say they are still feeling financial pressure from the Medicare Advantage changes.
Currently nine insurers have Medicare Advantage plans in the state. In 2012, 14.5 percent of New Jersey Medicare beneficiaries were in Medicare Advantage plans, well below the national average of 27 percent, according to the Kaiser Family Foundation.
Martinson said the Medical Society has a broader concern that some UnitedHealthcare members will be left with a network of providers that is inadequate to meet their needs.
It has asked UnitedHealthcare to provide more information about the changes. Depending on the response, the Medical Society is prepared to ask the federal Centers for Medicare and Medicaid Services to take steps to ensure that the network remains adequate.
“MSNJ feels that the physician-patient relationship is a sacred one – many seniors often have a strong and long-term relationship with a physician,” said Martinson, adding that the organization wants seniors to be able to make an informed choice during the open enrollment period.
UnitedHealthcare spokeswoman Mary McElrath-Jones wrote in an email response to questions that the reductions will differ depending on local factors, the healthcare needs of members and the company’s responsibility to provide appropriate access to primary-care doctors and specialists.
The factors used to decide which doctors were dropped depended on the company’s need to offer a network that would “enhance health plan quality, improve health care outcomes and curb the growth in health care costs. I want to emphasize that the basis for removal from our network is driven by what we are trying to achieve – not necessarily by a failure to meet any contractual terms,” she said.
The company also is dealing with federal pressures.
“Reimbursement rates for Medicare Advantage plans are dropping, and overall Medicare Advantage funding is not keeping pace with the growth in healthcare costs,” she said.
She also said the company is working to help members understand their options. Members with recent claims with providers being dropped will receive a letter from UnitedHealthcare “as soon as possible after providers are notified,” she said, adding that customers can call the company’s customer service line to check to see if their provider is still in the network.
Dr. David U. Himmelstein, a professor with the City University of New York School of Public Health, said insurers have in the past dropped doctors from their Medicare Advantage networks for two reasons: to drop patients whose costs were high and to increase their leverage in bargaining with other providers.
Himmelstein is highly critical of Medicare Advantage programs and co-wrote a paper earlier this year that estimated that the federal government pays billions extra in annual costs for the program, compared with what it pays for traditional Medicare fee-for-service. He said the UnitedHealthcare decision to drop doctors will pose present a challenge to patients.
“Were talking about elderly people, many of them with some cognitive impairment, and we’re saying you have to jump through a bunch of hoops” to keep their doctors, Himmelstein said. “Some might be able to, but many of them won’t.”
McElrath-Jones said the company was focused on meeting the needs of its members.
“The changes we are making will encourage higher quality health care coverage and help keep that coverage affordable for them,” she said.