Despite Medicare, Financial Barriers to Care Plague Older U.S. Adults

People in the U.S. over the age of 65 are more likely to be sick and more likely to have problems paying for the cost of health care than similarly aged counterparts in 10 other industrialized nations, according to the findings of a survey published by The Commonwealth Fund. The survey, which asked people 65 and older from 11 different industrialized countries about their health and financial access to care, revealed that the U.S. falls behind in almost every category, when compared to other industrialized countries.


According to a Commonwealth Fund press release, the survey analyzed responses from 15,000 older adults in Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the U.S. According to the release, the study offers an interesting view into the comparative effectiveness of Medicare, because the older adults in each of the other high-income countries surveyed have some form of universal health insurance coverage.

High Costs

Among the most notable of the findings were the financial costs that older adults in the U.S. face for health care, despite having access to the broad coverage of Medicare. For example, 21 percent of older adults in the U.S. spent $2000 or more a year in out-of-pocket costs for health care, while only 2 percent of older adults in the U.K. did. Similarly, while U.S. respondents were most likely to report difficulties paying medical bills, with 11 percent of older U.S. adults indicating reporting such financial troubles, only 1 percent of older adults in Sweden and Norway reported those problems.


Costs were also reported more often as a financial barrier to accessing care in the U.S. than they were in any of the other 10 nations, with 19 percent of U.S. adults 65 or older reporting they did not visit a doctor, skipped a medical test or treatment recommended by a doctor, did not fill a prescription, or skipped doses because of the cost of care. The reasons behind the higher costs, according the Commonwealth Fund, are “high deductibles and copayments, especially for pharmaceuticals, and limitations on catastrophic expenses and long-term care coverage.”


U.S. respondents reported relative difficulty getting same- or next-day doctor’s appointments, with only 57 percent saying they could obtain such appointments, while 83 percent in France and New Zealand, and 81 percent in Germany were able to be seen the same- or next-day. In a related matter, older adults in the U.S. were more likely to rely on the emergency department for care that a primary physician, if available, would have been able to provide. Specifically, 39 percent of older U.S. adults reported using the emergency department in the past two years and 35 percent of those adults indicated that they used the emergency department for something their primary doctor would have treated.


The survey did have some bright news for senior care in the U.S. For example, at 58 percent, older adults in the U.S. reported some of the highest rates of discussing treatment plans for chronic illnesses with their doctors. Less than half of chronically ill older adults in the other 10 countries, with the exception of the U.K., reported the same. Older U.S. adults also had a high prevalence of reporting that they had a treatment plan they could carry out in their day-to-day lives. High rates of positive patient-doctor communication, low occurrences of gaps or confusion in transitions from hospital to home, and high rates of end-of-life planning discussions were also reported by U.S. adults over 65. Specialty care appointments were another area where the U.S. excelled, with 86 percent of older U.S. adults saying they were able to get an appointment with a specialist in six weeks, which outranked the older adults in Norway and Canada, where only 46 percent of older adults could get a specialist appointment on the same timeline.

Part B Consumers Beware: ‘Pitfalls, Problems and Penalties’

In a report that included recommendations for improvements to the Medicare enrollment system, the Medicare Rights Center also focused on the existence of issues that often plague Medicare enrollees and how to avoid these pitfalls so as to escape often severe and long-lasting penalties. Besides identifying how consumers may sidestep these issues within the complicated program, the report, entitled “Medicare Part B: Enrollment: Pitfalls, Problems and Penalties,” also called for a streamlining of the enrollment system as it noted that the aging of the American population was occurring “at an unprecedented rate.”

Pitfalls and Problems

To premise the review of the Medicare Part B enrollment process, the authors noted that, “an often reported fact is that 10,000 Baby Boomers turn 65 and become Medicare-eligible each day,” yet, “less well known and commonly misunderstood, are the rules concerning how to enroll in Medicare.” To highlight the issues faced by many enrollees, the Medicare Rights Center reviewed more than 15,000 calls received by the Medicare Rights’ national hotline in 2013 and found that almost one-quarter of the calls were from individuals that were experiencing some type of challenge regarding enrollment. Of those callers, 38 percent were “navigating a specific hurdle,” 28 percent did not understand the enrollment periods, and 13 percent were not able to determine whether they were eligible for enrollment in Medicare. Another area that the report identified in terms of what types of challenges that consumers were experiencing during enrollment was transitions from existing coverage to Medicare. In sum, the Medicare Rights Center found that the majority of issues for enrollees fell into one of these three categories: (1) navigating coordination of benefits rules; (2) understanding enrollment time frames; and (3) dealing with late enrollment penalties. 


In addition to coverage gaps due to failure to enroll in a timely matter, “higher out-of-pocket costs in the form of lifetime late enrollment penalties (LEPs) may also apply.” While some may be able to appeal LEPs through a process called equitable relief, in which those who can prove they were provided misinformation from a federal source about enrolling in Medicare are granted immunity from those penalties, it is estimated that in 2012, approximately 740,000 Medicare beneficiaries paid Part B LEPs.

Fixing the System

In addition to educating consumers regarding the rules of Part B Medicare enrollment, the Medicare Rights Center also recommended steps to take in order to improve the process itself. Among the suggestions for streamlining the complicated process, the report included the following: (1) increasing education for soon-to-be enrollees; (2) simplifying enrollment periods; (3) increasing avenues for consumer relief; and (4) filling gaps in knowledge. With regard to the final suggestion, the report noted that “the true impact of enrollment changes on newly Medicare-eligible seniors and people with disabilities is difficult to discern,” and as such, “Congress should take steps to analyze the true scope of these issues.”

Kusserow on Compliance: 13 Highlighted Items in the 2015 OIG Work Plan Relating to Hospitals

The HHS Office of Inspector General (OIG) released its annual Work Plan for 2015 on October 31, 2014, setting forth planned audits and evaluations with indicators for whether the work was in progress at the start of fiscal year (FY) 2015 or will be new going forward in FY 2015 and beyond. There is a considerable overlap in the OIG’s 2014 reviews with its 2014 Work Plan. The OIG directs a vast majority of its resources toward safeguarding the integrity of the Medicare and Medicaid programs. As in previous years, the hospital sector has a number of initiatives included in the Work Plan. The following highlight some of these:

  1. Reconciliations of Outlier PaymentsCMS reconciles outlier payments based on the most current cost-to-charge ratio from hospitals’ associated cost reports. The OIG plans to assess whether CMS reconciled payments in a timely manner.
  2. New Inpatient Admission Criteria—In FY 2014, CMS implemented criteria for inpatient admissions known as the “2-Midnight Rule.” The OIG will review its impact on hospital billing, Medicare payments, and beneficiary copayments, as well as determining billing inconsistencies and financial incentives for inappropriate billing.
  3. Medicare Costs Associated with Defective Medical Devices—The OIG will review Medicare claims to assess costs that result from additional utilization of medical services associated with defective medical devices.
  4. Analysis of Salaries Included in Hospital Cost Reports—There continue to be concerns about the cost of executive salaries at hospitals. The OIG will review compensation in its cost reports in allowable provider costs to the extent that it demonstrates reasonable remuneration. Note: Medicare does not have limits on the salary amounts that can be reported by the hospital in the cost report.
  5. Medicare Oversight of Provider-Based Status—Medicare rules allow facilities owned and operated by hospitals to bill as hospital outpatient departments; however, the additional payments for services delivered at provider-based facilities may increase beneficiaries’ co-insurance liabilities. The Medicare Payment Advisory Commission (MedPAC) expressed the opinion that Medicare should seek to pay similar amounts for similar services. The OIG will assess the extent to which provider-based facilities meet CMS’ criteria and the impact provider-based status has on Medicare billing.
  6. Comparison of Provider-Based and Free-Standing Clinic—Medicare often makes higher payments to provider-based status facilities than to freestanding clinics for certain services, and the OIG will assess and compare the difference in Medicare payments between physician office visits in provider-based clinics and freestanding clinics for similar procedures.
  7. Duplicate Graduate Medical Education Payments—Prior OIG reviews have found that hospitals have received duplicate or excessive Medicare payments for graduate medical education (GME). The OIG assess whether hospitals received duplicate or excessive GME payments.
  8. Indirect Medical Education Payments—Teaching hospitals receive indirect medical education (IME) payments for each Medicare discharge to account for the higher indirect patient care costs of teaching hospitals compared to those of nonteaching hospitals. The OIG will assess whether hospitals’ IME payments were calculated properly according to federal regulations and guidelines.
  9. Outpatient Evaluation and Management Services Billed at the New-Patient Rate—Medicare payment rates vary for evaluation and management (E/M) services dependent on whether patients are new or established based on previous encounters with the hospital. Prior work found overpayments due to hospital use of new-patient codes when billing for services to established patients and OIG intends to revisit this area to verify whether payments were appropriate and will recommend recovery of overpayments.
  10. Nationwide Review of Cardiac Catheterization and Endomyocardial Biopsies—The OIG will review Medicare payments billed during the same operative session to determine whether the procedures were billed in accordance with Medicare billing requirements.
  11. Review of Hospital Wage Data Used to Calculate Medicare Payments (New)—In the past, the OIG identified hundreds of millions of dollars in incorrectly reported wage data and intends to review hospital controls for accurate CMS calculation of wage index rates for Medicare payments.
  12. Participation in Projects with Quality Improvement Organizations—CMS contracts with Quality Improvement Organizations (QIOs) to “improve the efficiency, effectiveness, economy, and quality of services delivered to Medicare beneficiaries,” and the OIG will review the extent and nature of hospitals’ participation in quality improvement projects with QIOs and the extent to which they overlap with projects from other entities.
  13. Oversight of Hospital Privileging—Hospitals participating in Medicare are required to have an organized medical staff that operates under bylaws approved by a governing body. The OIG will assess how hospitals evaluate medical staff candidates before granting initial privileges, including verification of credentials and review of the National Provider Databank.

The Center for Public Integrity

The Center for Public Integrity is a nonpartisan, nonprofit investigative news organization founded in 1989 by Charles Lewis. Its stated mission is to serve democracy by revealing abuses of power, corruption, and betrayal of public trust by powerful public and private institutions, using the tools of investigative journalism. It provides nonprofit digital news and does no advocacy work. On many occasions, I have found their work to be very useful and enlightening. In fact, in a recent posting (“Increased Regulatory and Enforcement of Medicare Advantage Plans“), I relied greatly on the work they have done. I believe the Center offers information and insights derived from investigative journalism that is not to be found in the popular media.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.

More Fraud in Detroit; Home Health Recruiter Arrested

A Detroit-area home health agency recruiter will face criminal charges that he participated in a health care fraud scheme that resulted in $2.7 million in improper Medicare payments. Javed Akhtar served as a patient recruiter for two agencies in Wayne, Michigan that purported to provide home health services to Medicare beneficiaries. According to the Department of Justice (DOJ), Akhtar was arrested on November 5, 2014.


The complaint alleges that Akhtar served as a recruiter for Life Choice Home Health Care, LLC and Angle’s Touch Home Health Care, LLC. Akhtar is accused of paying illegal kickbacks to Medicare beneficiaries in exchange for information and signatures required to file claims. He then filed claims with Medicare for procedures that were medically unnecessary or never provided.

Detroit-Area Fraud

The case was brought, in part, by the Medicare Fraud Strike Force, an interagency group that targets Medicare fraud, with operations in nine cities across the country, including Detroit, Michigan. Recently, a Strike Force investigation led to the imprisonment of another Detroit-area home health worker (see Prison term, restitution for home health worker who bilked Medicare of millions, October 30, 2014). This appears to be part of a trend, as CMS instituted moratoria on the enrollment of new suppliers and ambulance services in various metropolitan areas, including the Detroit metropolitan area, in February 2014, due to a high incidence of fraud and abuse. The moratoria were extended until February 2015 (see Moratoria on enrollment of new home health and ambulance providers extended for six months, July 30, 2014).