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Originally Posted by biker1
I am most definitely not a Medicare expert but I can certainly understand why they are doing what they are doing. As I understand it, and someone correct me if I am wrong, if you enroll in an MA plan then the plan gets up to $18K/year from Medicare plus your $122/month (??) plus what would be the approximate monthly cost of a supplemental plan and then the plan doesn't have to deal with Medicare anymore. They can attempt to "manage" your benefits by restricting the pool of providers. So, if you have minimal health issues, the MA plan can make money since they keep the $18K and monthly charges. Obviously they are also accepting the risk of unhealthy patients since they now "own" all the costs.
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I'm not sure about the dollar amounts, but your description of how it works is sound. The government, many years ago, realized they could not easily control how many tests and specialty referrals doctors made. So, they developed the concept of "risk sharing". In essence, they pay the insurance company a certain amount per year, and then let them manage utilization. Of course, they had to add safeguards to make sure there was no "cherry-picking" of healthy patients, and also some guards against catastrophic costs.
The problem is that the insurance company now puts obstacles in the way of appropriate care to avoid unnecessary care. The number one cause of unnecessary care is lawyers. The number two cause is weak providers.
The most common "trick" is to deny approval for a test or referral until the physician PERSONALLY speaks to the medical director at the insurer. They know that just the time constraints alone will cause 20-30% of the requests to "disappear". I never had a request denied after speaking to them, but I abhorred the complete waste of time. Yet, I have to believe that this policy saved $$$, otherwise the cost of these "administrators" could not be justified.