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When “Paying Correctly” Means Paying Nothing: How to Make Medicare Advantage Accountable

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By FRANK LEAHY

This is the second of two pieces. The first told the story of “Rick,” a 77-year-old Humana Medicare Advantage member who nearly lost his sight in a months-long runaround over a retinal detachment. This one asks what his case reveals, and what would help fix it.

The runaround was exhausting – the hold times, the repetition, the new voice on every call. But the most disturbing moment wasn’t any of that, and it wasn’t a denial. It was a justification. The claims that paid his surgeon $0.00, a Humana representative explained, were “paying correctly based on the contract loaded.”

Hold onto that sentence, because it reframes everything. What nearly cost Rick his sight was not one careless adjuster or one unlucky claim. The system did what it was built to do. It was designed so that a 77-year-old losing sight in one eye, and the surgeon who saved it, could end up with nothing – and no understandable way to make it right.

No understandable way is the heart of the problem. When a privately insured patient gets an unfair out-of-network bill, federal law hands their doctor a referee: the No Surprises Act, which lets a provider force a fair payment through arbitration. But that law was written for commercial insurance and never reached Medicare Advantage. On paper, Rick’s surgeon was already owed at least the standard Medicare rate; Medicare Advantage’s own rules say so. But he was paid nothing – and unlike a commercial patient’s doctor, he had no arbitration, no referee, no way to force the issue. What finally worked was a letter to Humana’s CEO and board of directors – a lever that shouldn’t have been needed.

Not an Outlier

Rick’s is just one case among a very large number. In 2023, Medicare Advantage insurers reviewed roughly 50 million prior-authorization requests and denied about 6.4% of them. Only 11.7% of those denials were ever appealed – and of the ones that were, more than 80% were partly or fully overturned. When four of five challenged denials get reversed, the obvious question is how many of the unchallenged ones were wrong too. (Source: KFF, 2025.) The federal Office of Inspector General has repeatedly found Medicare Advantage plans denying or delaying care that traditional Medicare would have covered.

What Rick’s case adds to those numbers is texture. His problem was never that his care was judged unnecessary – it was eventually authorized. His problem was that the rules were invisible and the process had no owner. No one told him a referral was required until he’d already failed to get one. The primary care doctor who was listed on his Humana Medicare Advantage card was a stranger in another state. The insurer’s own directory listed specialists who didn’t take the plan. Every answer contradicted the last, and nothing was ever put in writing. He was expected to navigate a maze whose walls appeared only after he’d walked into them. And when the maze finally produced a number, the number was $0.00 – for a surgeon the same insurer confirmed, on a recorded line, was in network.

Three Fixes That Can Help

There are many big proposals about how to fix health care in America, but I’m going to propose three narrow, unglamorous fixes that answer the simple question: Would it have helped Rick at the time of his accident?

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“We’re Sorry, That’s the Policy”: How a Medicare Advantage Runaround Nearly Cost a Senior His Sight

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By FRANK LEAHY

On a gray February morning, I sat in my office in Inverness, in rural northern California, with the phone pressed to my ear, jotting down notes and Humana reference numbers. Across the table, my new friend Rick, 77, waited anxiously, struggling to follow the conversation. Nearly deaf and now partially blind, Rick had lived with a detached retina for weeks. Time was running out to save his vision.

I was determined to get Rick the surgery he needed. But as hours turned into days and days into weeks, I found myself ensnared in the kind of bureaucratic maze familiar to millions of Americans with Medicare Advantage plans.

This is the story of a vulnerable senior and his advocate, caught between doctors, clinics, and insurers at the hard edge of Medicare Advantage – America’s privatized Medicare system. It is a story of denials, delays, and a rulebook no one would explain – and of the human cost when a system is built to save money, not sight. It is also a story about how and why it took seven months, and a letter to a Fortune 500 CEO, to get one surgeon paid.

“I Just Want to See Again”

Rick’s world had been shrinking for years. Hard of hearing and living on less than $1,200 a month in Social Security and SSI, he split his time between Colorado and a friend’s spare room in rural California. With no family nearby, no internet, and only a battered flip phone, he relied on friends for help.

In mid-November 2024, Rick fell out of bed, striking his head and injuring the left side of his face. He shrugged off the pain, but over the following weeks his vision blurred, then faded. “I thought it would get better,” he said. “But it just kept getting worse.”

I met Rick in late December 2024. He told me about his fall, the injury, and that he could no longer see out of his left eye. It was clear how serious his situation was, and how much support he needed, so having recently retired I had the time to help him. But it was nearly too late. After weeks of back-and-forth with Humana, I finally got him in front of an ophthalmologist, who diagnosed a retinal detachment – a medical emergency where prompt treatment is essential to prevent permanent blindness.

Getting that treatment would prove far harder than I could have imagined.

The Medicare Advantage Trap

Rick was enrolled in a Humana Gold Plus HMO, a Medicare Advantage plan based in Colorado. Why Humana? Pure happenstance. He had been shopping at a Walmart in Colorado when a man “who seemed nice” signed him up. Like a lot of older people, Rick didn’t know the difference between Medicare Advantage and Original Medicare with a Medigap supplement – or why that difference would come to matter so much.

Like more than half of all Medicare beneficiaries, Rick had been drawn to a private plan by the promise of extra benefits and lower costs. The catch is that Medicare Advantage plans are built on narrow provider networks and strict rules about where and how you get care. For snowbirds, part-time residents, or anyone who lives in more than one state, those rules can become a trap.

My first call to Humana set the tone:

“I searched for a doctor on your website. I found one and called them. They say they don’t take Humana, even though your website says they do,” I told a representative, reading from my notes. “Can you find one for me?”

“You can, but I need Rick on the line.”

“He’s right here.”

“Okay, but I also need additional documentation…”

The runaround had begun.

The Rules No One Explained

To get surgery, Rick needed a referral to a retina specialist. No one at Humana told us that at the start. We learned it the way we learned every rule in this process – by hitting a wall, calling back, and being told, after the fact, that we had failed to do something no one had mentioned.

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Bribery, Corruption and the American Health Care Way

By MATTHEW HOLT

These days you just have to wonder about the greed and corruption that is going on all around. Senator Dick Blumenthal is one of many who’ve been pointing out the naked corruption in the Trump family–Qatari jets, memecoins, Trump’s son being on the board of so many defense and prediction market companies you can’t keep it straight. Issac Saul has tried to detail it all, but reading just the cryptocurrency part of his piece has me spinning. And we’re nowhere near assessing the naked corruption of so many others in the administration. Kristi Noem, despite being fired, is still living in her government house, and has not had to answer for routing some of a totally unnecessary $220m ad campaign to a company that her friends own. The company was incidentally established a whole 8 days before it got the contract.

So it’s a little absurd to be worrying about fraud and corruption in health care. But apparently HHS is. At least Oz and RFK Jr are going on about Somalis defrauding Medicaid and Armenians running fake hospices in California. (Let’s not even consider the optics of a Turkish citizen with close ties to the Erdogan regime criticizing Armenians–I mean the genocide was over a century ago!)

But of course, fraud and corruption in health care has been going on forever. Back in 2011 a Florida man was convicted of Medicare fraud to the tune of tens of millions and got a 50 year sentence. Don’t be surprised that Trump commuted his sentence. And that’s just one of thousands and thousands of cases, mostly by providers inventing fake patients to defraud Medicare or Medicaid.

But the ones who get convicted and go to jail are the amateurs.

If you’re a big company in health care, you fight with lawyers and you settle. For example, every big pharma company has settled for things like off-label promotion of their drugs. GSK paid $3bn, Pfizer over $2bn, J&J over $2bn. In fact back in the 2000s THCB had a regular correspondent called The Industry Veteran who basically suggested that whistleblowing in qui tam suits inside big pharma was the way to wealth and fame.  And of course HCA in its days when it was run by Rick Scott – now (somehow not a) convicted felon as well as Florida senator – settled for $1.7bn. This was all back in the 1990s and early 2000s, but it’s all still going on.

The venue though may have moved. Risk adjustment in Medicare Advantage has become one of the biggest venues for fraud. The key here is that the DOJ and HHS found that while Medicare Advantage plans were upcoding their patients, and therefore getting paid more for them, they weren’t actually delivering more services.

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Lauren Ranalli, Town Square Health

Lauren Ranalli is the VP of Patient & Community Engagement at Town Square Health, a brand new medical group setting itself up for the senior population. There have of course been a lot of attempts to create new primary care medical groups. Town Square has its roots in Oak Street but is adding immediate visits (during primary care visits) with specialists which the believe will close the care loops and provide better care. Their goal is to be efficient on staffing, use AI and then take risk. Personally I’m not sure that’s the best tactic…so Lauren and I had a good chat about their strategy, and how the heck we fix primary care in America–Matthew Holt

Farewell to Medicare Advantage

By JEFF GOLDSMITH

This morning, after twelve years, I dumped my Medicare Advantage plan and enrolled in a Medicare Supplement policy. My smoldering discontent finally boiled over and . . . I’m gone. It was a large network style national plan with zero premium.

My decision to enroll in MA was, in part, ideological. I liked the idea of a program design that rewarded healthy behavior. But I discovered that none of the alleged MA perks were actually reachable-my health club was out of network as was my dentist. When I got cancer in 2015, the plan did not give me attitude about my decision to fly 600 miles to the University of Chicago for my care. They merely paid the U of C about a third of what it cost them to rid me of my cancer. 

There was not a single denial of care during the entire twelve years. But they pestered my primary care doc mercilessly by insisting that he sign off on every single care decision made in my cancer fight or anywhere else I went- hours of needless “paperwork”. And I fended off sixteen offers of a “wellness visit”- a nurse coming to my house to upcode me. My relationship with the carrier was basically to be on the receiving end of hundreds of robo-calls.

I got little signs that their networks were withering. The University of Pennsylvania did not accept them, nor Cedars Sinai, nor the Hospital for Special Surgery. But when Mayo announced they were not accepting them, that was for me the last straw. Mayo is my “safety net” provider if my local Charlottesville folks are not able to meet my needs. 

From a policy standpoint, I think MA made sense when it was redesigned and rebranded in the early 2000’s. And if we had SCAN or even Kaiser here in my market, I would probably still be a member. Particularly for the multi-functionally impaired older folks or the dually eligible, thoughtful protocol driven care by a tightly linked multi-specialty medical group makes a great deal of sense. In this, my old friend George Halvorson and I agree.

But the idea that capitation or the newer version-micro-managed care run by a warm and fuzzy AI- is somehow a cure-all for what ails our society is increasingly questionable on its face. It isn’t about the incentives, folks. I ate the MA dog food for twelve years. It’s about the care system you rely on when things get scary. In twelve years, except for the frozen dinners they sent me after my cancer surgery, the carrier added no value whatsoever to my life. MA just wasn’t worth it, even if was free. 

Jeff Goldsmith is a veteran health care futurist, President of Health Futures Inc and regular THCB Contributor. This comes from his personal substack

When Star Ratings Backfire: How CMS Could Better Support Health In Medicare Advantage

By EMMANUEL ANIMASHAUN

The Centers for Medicare & Medicaid Services (CMS) Star Ratings system represents a cornerstone of quality assessment in Medicare Advantage (MA), designed to empower consumers with transparent information while rewarding plans that deliver superior care. Yet recent developments, particularly the seismic downgrading of Humana’s ratings reveal an unintended consequence: a system created to measure and incentivize quality may now be actively undermining it.

The Humana Case: Symptom of a Broader Problem

In 2025, Humana’s Medicare Advantage star ratings collapsed, with only 25% of members remaining in four-star or higher plans, down from 94%. This wasn’t due to declining clinical performance but resulted from CMS’s “Tukey outlier deletion” statistical adjustment implemented with minimal industry consultation. The change raised performance thresholds, causing Humana to lose billions in Quality Bonus Payments and $4 billion in market value. Humana’s legal challenge, arguing that CMS violated the Administrative Procedure Act through non-transparent processes, was denied. Other insurers including UnitedHealthcare and Centene also share concerns about methodological rigidity and that the rating system may have diverged from its purpose of improving patient care.

Perhaps more striking are the cases of Elevance and SCAN, which further illustrate how rigid metrics can distort assessments of actual care quality. In March 2023, both insurers were penalized after allegedly missing a single CMS “secret shopper” phone call, a call they claim was never received. The downgrade cost them tens of millions in Quality Bonus Payments and triggered legal challenges. As SCAN’s CEO wrote, the sanction came despite strong clinical performance and patient outcomes. A federal judge later ruled in favor of SCAN in June 2024, prompting CMS to recalculate the Star Ratings across all Medicare Advantage plans. This episode underscores a key concern: when measurement hinges on unverifiable administrative moments, it may end up punishing rather than promoting quality.

How Quality Measurement Can Undermine Actual Quality

The Star Ratings system aggregates over 40 metrics across preventive care, medication adherence, member experience, and customer service. However, it disproportionately rewards process compliance and documentation over health outcomes. Plans can excel by optimizing coding, maximizing documentation, or boosting survey participation without delivering better care. This misalignment diverts resources from genuine health innovations. Research from an NBER working paper even found that better-rated plans aren’t statistically better at keeping patients alive than lower-rated ones, raising fundamental questions about whether the system measures what truly matters for patient health.

Even more concerning is that MA contracts with higher proportions of dually eligible, disabled, or racially diverse members consistently score lower, not because they provide inferior care, but because the scoring system inadequately adjusts for social risk factors. A JAMA Health Forum study highlighted how plans serving more Black beneficiaries had lower star ratings even when controlling for other factors. This structural bias effectively penalizes plans doing the challenging work of serving populations with complex needs, creating a perverse disincentive to focus on health equity.

The uncertainty from frequent changes in star rating computation could also pose severe implications for strategic planning for companies. When a company like Humana loses billions due to a technical recalibration, it sends a troubling message: long-term investments in quality improvement may not yield returns if measurement methodologies change unpredictably. This volatility makes strategic planning difficult and discourages sustained investment in quality initiatives.

The Real-World Impact on Patients

These methodological shortcomings do not just affect health plans’ bottom lines; they have tangible consequences for Medicare beneficiaries. When plans lose Quality Bonus Payments (QBPs), they often must scale back valuable supplemental benefits like transportation assistance, dental coverage, or in-home support services, or increase plan premiums, as Avalere Health suggests. McKinsey estimates CMS rating changes could cost plans over $800 million in bonuses, reducing resources available for such benefits.

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Aneesh Chopra talks Medicare Advantage

Aneesh Chopra (these days at Arcadia) and Matthew Holt got into a discussion of how Medicare Advantage is doing. Working with APG (America’s Physician Groups), his company Arcadia found that Medicare Advantage companies who paid capitation got better outcomes than those who were paying FFS for different patients to the SAME doctors. We got into what is really saving money (Humana says there is little cost differential), what this means for the policy, what is really happening with risk adjustment–Aneesh thinks we should put those home visits in the medical record to benchmark VBC based payments. 

And he tells us why what we have done so far in Medicare Advantage and explains that it doesn’t work because we haven’t got the clinical data easily available via API. (Those in the know knew he was going to say that!). He also thinks that commercial payers may yet be the saviors of ACOs and Medicare Advantage by buying bundled care from providers and making it necessary for them to access the data across the board, and then change overall behavior. And Aneesh is quite optimistic about the new Admin and its MAHA stance. Matthew Holt

What would a rational DOG(gi)E do(o)?

By MATTHEW HOLT

DOGE, or Doggie as Kara Swisher has been calling it, has gone from being a meme about Shiba Inus to a crypto scam to a group tearing the Federal government apart.So I thought I would use the title of this piece to make a joke. Like Musk’s humor it’s puerile and not funny. What’s also not funny is what Musk’s team has done to small government agencies, like USAID & CFPB that really help people, not to mention the irrational firing of thousands of government employees that appear to be screwing up the NIH, the National Parks, the FAA and much more. But it’s all got me thinking, what in health care should an effort to quickly rationalize government spending do?

Now I’m not proposing that there’s anything OK with the way Musk and his team have been blundering around the Federal government, telling lies about what it does and indiscriminately firing the people who have the most important responsibilities and then desperately trying to get them to come back. This has been pure ignorance theater, and it would be hilarious if it wasn’t so damaging. Equally importantly the places DOG(gi)E has started are stupid because they don’t spend much money. But the government spends a lot on health care –between two and three trillion dollars, depending on how you count it.

So if you wanted to save some money and potentially change the system, what would you do? First you’d take a deep breath and get some real data, and improve your understanding about what is actually happening. There are some areas in health care where the issues are well understood and the data is clear and there are others where it’s less obvious.

Let’s start with a relatively small one–spending on Federal Employees health benefits. Chris Deacon’s Linkedin posts are a constant source of fun and games, and she has been highlighting screwups in the FEHBP administration for a long time. Essentially the government via the OPM pays lots of different insurance companies to manage Federal employees’ health care. There is very poor oversight of what happens in those programs and when the OPM’s OIG points that out, not much happens. The plans (including Horizon Blues in NJ and BCBSNC and many others) have been caught being sloppy or fraudulent but not much has happened. All DOG(gi)E needs to do is read the report on the audits, or look at what GOA said about $1bn being spent on ineligible members in 2022 and apply their recommendations.

Next let’s get into something that requires a little more investigation. In America we buy (and sell) drugs in a mind-bogglingly complex way.

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Medicare’s Hidden Information Hurts People & Policy

By MICHAEL MILLENSON

Open enrollment season for Medicare, which began Oct. 15 and ends Dec. 7, triggers a deluge of information about various options. Since I’m a health care consultant and researcher as well as a Medicare beneficiary, I’ve looked critically at what we’re told and what we’re not. Unfortunately, information crucial both for the individual and for the broader policy goal of moving toward a “value-based” care system is often difficult to find or not available at all.

The most glaring example involves Medicare Advantage, the increasingly popular insurer-run plans that are an alternative to traditional fee-for-service Medicare. Plans receive a quality grade from one to five stars from the Centers for Medicare & Medicaid Services. Those grades are designed to incentivize providing the highest quality care for the money ­— the very definition of “value.” A high grade triggers both a boost in payment from Medicare and a boost in enrollment. Not surprisingly, almost three-quarters of people chose a plan with a 4-, 4.5- or 5-star rating, according to CMS.

Those ratings, however, should come with a large asterisk attached. It’s not just that the methodology can be controversial, particularly when a lower grade is meted out. It’s that the star ratings aren’t anchored in geography, as one would naturally expect; i.e., the rating is for the plan offered in my area. What is colloquially called a “five-star plan” is actually a plan that’s part of a five-star Medicare contract ­­— and those two typically are not the same thing.

For instance, one large insurer contract that I tracked included at least 17 plans scattered across the country. It defies common sense to believe that care quality is identical among plans in, say, Rhode Island, Mississippi, Illinois, Colorado, and California just because they all share the same government contract number.

If you’re wondering who benefits from this not-very-transparent transparency, some insurers have been known to improve the rating of a low-performing plan with a small number of members by merging it into a contract with more members and a higher rating.

In 2024, nearly 33 million people, or 54% of Medicare beneficiaries, were enrolled in an MA plan, according to KFF (formerly the Kaiser Family Foundation). KFF expects that number to increase to nearly 36 million in 2025. It’s a long-accepted truism that “All health care is local.” Medicare beneficiaries deserve local plan information.

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Fake News from MedPac on Medicare Advantage Needs to Be Corrected, Part 2

By GEORGE HALVORSON

Special Needs Plans Change Lives for The Lowest Income and Highest Need Patients

The people who benefit the most from Medicare Advantage are clearly the very low-income and high health-need people who are eligible for both Medicare and Medicaid as programs and who enroll as members in the Medicare Advantage Special Needs Plan programs.

There clearly aren’t any other programs existing in our country that do more good for large numbers of needing people than the Medicare Advantage Special Needs Plans do for those members.

Those people with that dual eligibility are in major need for care.

We have millions of retirees who are eligible for both programs who have gone through years of inequities, inadequacies, and deficiencies relative to our care systems for a number of reasons, and who are now in need of care and support at multiple levels in their lives.

The plans do extremely good things for those high-need patients.

Medicare Advantage Special Needs Plan programs now help and provide services to millions of people who’ve actually never had good or adequate care in their entire lives.

The Special Needs Plan programs for Medicare Advantage reach into people’s homes and provide layers of service and support that are life changing, badly needed, and the Special Needs Plans are much appreciated, with very high satisfaction levels from the patients they serve for that better care and far better life support levels.

We tend, as a country, to abandon and under serve people in too many settings and communities who are old and who have no money and who are in significant need of care. The Medicare Advantage programs do wonderful and badly needed things for many of those patients that we need to understand, appreciate, and then protect as we look at Medicare Advantage plans and the overall Medicare Advantage programs and approaches.

The people at MedPac who are trying so hard to reduce the benefit levels for Medicare Advantage members and who do shamelessly inaccurate, distorted, and clearly intentionally fake news pieces on the cost of Medicare Advantage plans are trying to undermine and weaken the Special Needs Plan program in order to somehow create a level playing field with higher income patients for Medicare for the patients who get the most benefits from those programs.

That’s a very bad practice, and protecting those high-income people is a very wrong functional priority for MedPac to have. But they have it year after year in uncaring, insensitive, and cold ways relative to those patients and they seem impervious to data and information from all of the plans about those patients and that care, and their need for those benefits and services in their lives.

We need MedPac to clean up their act relative to their lowest income people, and we need them to start telling the truth about the actual relative cost of Medicare Advantage.

And we very much need them to understand how much the lowest income members need those benefits.

We need them to stop saying that the plans are overpaid when they know better from having more than 6 million people enrolled as Special Needs Plan members and benefit levels, and when they know that two out of three of the lowest income Members are in plans, and it should be painfully obvious to even the most cold-hearted observer, that those people clearly need the care and benefits that they get there from the plans.

The Medicare Advantage attacks from MedPac in their current report now say that the total cost of Medicare Advantage is 22% higher than those members would have cost as normal Medicare members.

They actually say in their most recent report that if all of the Medicare Advantage enrollees were now actually enrolled in fee-for-service Medicare, those enrollees who are currently in the plans would cost 22% less money for the overall Medicare program.

That’s obviously impossible and it’s a complete fabrication that they do not support in their document with even a wisp of data.

They use that false information, and they use a very skillful and intentional fake news context to attack the plans with that information.

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