Aetna reveals health care denial rates in Medicare Advantage court case for New York retirees

Aetna reveals health care denial rates in Medicare Advantage court case for New York retirees

Aetna, the insurance provider chosen to serve a lift to health care for 250,000 municipal retirees, now wants a chance to defend the plan in court.

The company filed a petition on Tuesday to intervene in a lawsuit New York City retirees filed against the city and Mayor Eric Adams in Manhattan Supreme Court last month. The lawsuit is the second attempt by city government retirees to block the Adams administration’s effort to switch from traditional Medicare to a privatized version of the health plan called Medicare Advantage.

In materials presented to the court, Aetna outlines what it considers the merits of the new health plan and efforts to educate retirees about the changes underway.

Documents shared with Gothamist also showed that as of June 6, only 979 city retirees and dependents had opted out of the new Medicare Advantage plan. Members who opt out can enroll in another alternative city plan, known as HIP VIP, or refuse city coverage altogether and enroll in traditional Medicare independently. But they will lose city-funded benefits and will have to pay for any additional coverage themselves.

The low number of opt-outs indicates that despite the noise about Medicare Advantage plans, retirees overwhelmingly like what they see in our plan, according to Rick Frommeyer, senior vice president of Aetnas Group Retiree Solutions.

But Marianne Pizzitola, a retired FDNY worker who is president of New York’s Public Service Retirees Organization, said it’s because they haven’t had any good alternatives.

The only people who would be willing to give up city health benefits and all of their reimbursements are high earners, Pizzitola said.

Aetnas’ move is the latest campaign to convince skeptical retirees and other vocal opponents of the merits of the change.

New York City comptroller Brad Lander declined to register the city’s contract with Aetna last week, citing the pending lawsuit.

I am seriously concerned about the privatization of Medicare plans, overbilling by insurance companies and barriers to assistance under Medicare Advantage, Lander said in a statement at the time.

Lander said the decision was based solely on procedural issues, but his office told Gothamist this week that the mayor could reverse the move.

Nine retired city workers filed a lawsuit alongside the NYC Organization of Public Service Retirees, a group that formed to fight the Medicare Advantage shift. They claim the Adams administration is violating city law by decreasing their benefits and not paying for SeniorCare, the supplemental coverage that was previously provided by the city at no cost to city workers.

Aetna, Adams and a committee of municipal unions collaborated on the plan and argued that the new benefits will be comparable to if not better than what members previously had, without increasing their out-of-pocket costs. In addition, the plan is designed to save the city approximately $600 million annually in health benefits through federal funding available for Medicare Advantage plans.

Adams previously sought to keep the option for retirees to stay on traditional Medicare, with the Senior Care Supplement, for a fee of $191 a month. But that move was blocked in court because it allegedly violated the city’s administrative code. As a result, Adams eliminated that option altogether.

Now, if the switch goes ahead, approximately 250,000 municipal retirees and their dependents will automatically switch to the Aetnas Medicare Advantage plan on Sept. 1. June 30 is the deadline for opt-outs, and another window won’t come until next year’s enrollment period.

Will city retirees be denied assistance?

Pizzitola and others opposing the move have raised concerns about the need for doctors to get pre-approved for more services under Medicare Advantage than traditional Medicare, and a federal investigation revealed that under Medicare Advantage plans , requests are sometimes denied inappropriately.

Aetna is seeking to demonstrate through court filings that its existing Medicare Advantage plans across the country rarely refuse coverage for needed health care services. Those documents outline how those denials would be even rarer under his New York City government retirement plan.

According to Aetna, of more than 82 million requests under its Medicare Advantage plans last year, only 3.4 percent were subject to pre-approval and 0.49 percent were denied. Aetna said the rejection rate would be even lower for the New York City plan.

I have no basis for disputing their number, said Barbara Caress, who teaches health policy at Baruch College and was previously director of strategic planning and policy for 32BJs union benefit funds.

But he said the numbers don’t capture the phenomenon of doctors not bothering to seek prior approval for medical services they assume will be rejected under Medicare Advantage. Caress said she would be curious to know if Aetna ultimately denies services that are more expensive than procedures that are truly discouraged or deemed unnecessary.

Caress said the way people use their health benefits will need to be reviewed in the first year of the Medicare Advantage plan, if it goes through.

Did you get coverage under a Medicare Advantage Plan in New York City? We want to know your experience. Email Caroline Lewis at clewis@wnyc.org.

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