Is Medicare Advantage a Disadvantage For Patients With Cancer?

The growth of Medicare Advantage plans has seeded questions about whether it is a good choice for certain groups of patients or whether they would be better served by staying in traditional Medicare. Patients with cancer are at the top of that list because they tend to be heavy users of healthcare services.

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Perhaps one of the most consequential changes in healthcare insurance in recent years has been the growing number of Medicare beneficiaries choosing to enroll in Medicare Advantage (MA) plans. In 2008, just 9 million beneficiaries were enrolled in MA plans, according to the Kaiser Family Foundation. By 2022, that number had more than tripled, to 28 million, which works out to approximately 48% of Medicare beneficiaries. Projections show the absolute number and proportion growing even larger.

The appeal of MA plans is understandable: It includes a low or even no premium, added benefits (dental and vision coverage) and the simplicity of one-stop shopping (beneficiaries don’t need to purchase separate Medigap and Part D coverage separately). The principal drawback is that coverage is limited to services from providers in the plan’s network. As with all types of insurance, but perhaps especially health insurance, people will not experience the disadvantage of low-premium coverage until they need services and start bumping up against limitations.

The growth of MA plans has seeded questions about whether it is a good choice for certain groups of patients or whether they would be better served by staying in traditional Medicare. Patients with cancer are at the top of that list because they tend to be heavy users of healthcare services, for obvious reasons, and because cancer is a disease that disproportionately affects older people and therefore the Medicare population.

MA has out-of-pocket limits, which will be especially important for patients with cancer because the cost of treatment is high, according to Michael Kolodziej, M.D., vice president and chief innovation officer at ADVI Health, a Washington, D.C., healthcare consulting firm. According to the Kaiser Family Foundation, the in-network annual out-of-pocket maximum in 2023 is $8,300 and the combined in- and out-of-network maximum is $12,450.

In contrast, Parts A (which covers hospital services) and B (which covers physician services) have no out-of-pocket maximum, although many people buy Medigap coverage for that very reason.

The negatives of MA for patients with cancer, Kolodziej says, are the limited provider networks, which may leave out cancer centers and academic medical centers. Another minus for MA plans is that the networks may be limited to a metropolitan area or region. That would expose “snowbirds” who spend winter months in warm weather states such as Florida or Arizona to higher, out-of-network charges if they need medical services.

One of the main selling points of MA plans is that their enrollees experience more coordinated care than those enrolled in traditional Medicare. In addition, the plans can elect to cover nonmedical benefits that are intended to address social determinant of health, such as air conditioners for people with asthma and home-delivered meals for people dealing with food insecurity or poor nutrition.

MA plans follow Medicare coverage rules that specify which services must be covered. However, Marci Mutti, Kolodziej’s colleague and a senior vice president at ADVI Health, points out that MA plans use managed care tactics such as prior authorization and those tactics can delay care.

OIG Report

In 2022, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services issued a report about MA plans’ prior authorization and payment denials. The OIG’s investigators reviewed a sample of 430 prior authorization and payment denials in 2019 by the 15 largest MA organizations in the country. They found that 13% of the prior authorization denials were for services that met Medicare coverage rules and that 18% of the payment denials were for services that would have passed muster. Extrapolating to their results to a full year, the OIG reviewers calculated that the 15 organizations would have denied 84,812 prior authorization requests in 2019 that met Medicare coverage rules. The report does not break out cancer care, but imaging services, along with post-acute care in skilled nursing facilities and inpatient rehabilitation services, were among the “most prominent” of the services that were denied, reviewers noted. The reviewers cited the case of a patient denied an MRI to see whether a lesion on an adrenal gland was malignant. The denial was reversed after the rejection was appealed.

What does the research show?

MA has caught the eye of an increasing number of researchers, and the number of studies comparing MA with traditional Medicare in a variety of ways is mounting. One of the most recent studies was published in this month’s Health Affairs. Harvard University researchers found that the MA health maintenance organizations plans outperformed traditional Medicare on a battery of standardized clinical quality measures, including breast cancer screening. The researchers found that MA preferred provider organizations surpassed traditional Medicare on all but one measure, osteoporosis measurement.

The Medicare Payment Advisory Commission, which advises Congress on Medicare issues, published its annual report on Medicare payment in March 2023. The 951-page report has several pages reviewing the research that compares MA with traditional Medicare. The upshot is that the results are mixed, but as with the results reported in the Health Affairs article, the quality measures show MA enrollees have higher rates of breast cancer screening and other cancer screening tests than those in traditional Medicare.

But these are results concerning cancer prevention. When it comes to cancer care, recent research results support some of the common concerns about MA and narrow networks. Brown University researchers studied Medicare patients who had complex surgeries such as a lobectomy (removal of part of the lung), colectomy (removal of part of the colon), or Whipple procedure (surgical treatment of pancreatic cancer that typically involves removal of the head of the pancreas, part of the small intestine, the gallbladder, and portion of the bile duct) between 2015 and 2017. The study population included just over 181,000 Medicare beneficiaries, approximately 56,000 of whom were enrolled in MA plans and 125,000 of whom were in traditional Medicare.

According to the results reported by Daeho Kim, Ph.D., a senior research scientist at Brown’s School of Public Health, and colleagues in the American Journal of Managed Care® last year, the MA enrollees were less likely to have been treated at a top-ranked cancer hospital than those in traditional Medicare. The researchers used U.S. News & World Report rankings, which they acknowledged is an imperfect proxy for quality. Overall, the difference was 6.0 percentage points, and for plans without out-of-network benefits, the difference was larger, 7.5 percentage points. This study wasn’t designed to look at outcomes, and there are plenty of successful surgeries at hospitals that aren’t on the U.S. News & World Report list. But results highlight that a MA plan’s narrow network may restrict access to marquee providers.

Another study of patients who underwent cancer surgery that compared MA with traditional Medicare enrollees was published in 2022 in the Journal of Clinical Oncology. A research team led by Mustafa Raoof, M.D., M.S., of City of Hope in Duarte, California, found that MA enrollees were less likely to have been treated at high-volume hospitals (volume is associated with quality of care, particularly when it comes to surgery) and had increased 30-day mortality rate after stomach, pancreatic and liver cancer surgery.

Keith Loria is a freelance writer in suburban Washington, D.C.
Peter Wehrwein is managing editor of Managed Healthcare Executive.