As Humana-Baptist feud drags on, Medicare patients caught in middle

LOUISVILLE, Ky. (WDRB) -- In August, Mike Wallace found out the apparent cause of the terrible back pain he’s experienced lately: An MRI scan revealed he has a spinal tumor.

The 67-year-old former construction worker fears that a cyst first observed in his spine three years ago didn’t turn out to be dormant after all. He hopes the tumor isn’t serious, but Wallace allows, "I have a feeling it is."

As for his prognosis, Wallace was supposed to have had answers by now. But then he became one of thousands of people caught in the middle of a business dispute between the nonprofit Baptist Health System and Humana Inc., the insurance giant that manages Wallace’s Medicare benefits.

On Sept. 22, patients with Humana insurance lost "in network" access to the more-than thousand doctors who comprise the Baptist Health Medical Group.

As the dispute has dragged on, it has forced patients like Wallace to make choices between their health and their wallets.

As much as Wallace fears the next steps in treating his tumor, the disabled retiree also fears an unpredictably high medical bill. Following his August MRI, Wallace followed his orthopedist’s advice to make an appointment with a neurosurgeon, he said.

But once the Humana-Baptist feud erupted, Wallace feared that following through with the Oct. 25 appointment with the Baptist doctor would saddle him with an "out of network" bill he could not afford. So, as the date approached, Wallace relented and canceled the appointment.

Wallace will now have to wait until Dec. 19 for his answers. Barring a lucky break, that’s the soonest he could snag an appointment, he said, with a neurosurgeon at Norton Healthcare, which remains in the network of providers approved for Wallace's Humana plan. 

"I am definitely nervous about it, and I am in a lot of pain too," Wallace said.

Medicare Advantage insurers offer benefits, strings attached

While Humana and Baptist say they’re still working toward a resolution, there a few signs of progress.

For Baptist patients, more headaches could be on the way. In addition to Humana, the system has disclosed that it’s scheduled to go out-of-network with Medicare Advantage plans offered by United Healthcare and by WellCare on Jan. 1 unless it can reach deals with those insurers.

Last week, as he told his story in the living room of the Fern Creek patio home he shares with his sister, Wallace nodded across the room toward the muted TV.

Ads for "Medicare Advantage" plans — like the kind Wallace has with Humana — flashed across the screen. It’s the annual "enrollment" selling season, when companies like Humana and United Healthcare scramble to add more seniors, like Wallace, to their customer ranks.

Before the snafu with Baptist, Wallace said he’s been largely satisfied with his Humana coverage, which he has had since he gained early access to Medicare about ten years ago because of a disability. The biggest selling point, he said, is that he pays no monthly premium for his coverage.

"I’ve used it a lot in the last three years," he said. But, he said, "I’m not too happy about it right now."

Medicare Advantage is one of the fastest-growing businesses in health insurance thanks to the dual impact of an aging population and a higher share of Medicare beneficiaries choosing to get their government-paid coverage through private companies like Humana and United Healthcare.

For the first time, in 2023 more of Medicare population is covered through private Advantage plans than by original fee-for-service Medicare, according to KFF.

As seen on the ads that flashed across Wallace’s TV, the private Medicare plans offer savings like $0 premiums and extra benefits like hearing, dental and vision coverage.

But the disputes between insurers and Baptist Health — one of the three large provider systems in Louisville — highlight the other side of the Medicare Advantage equation. Insurers manage to offer those benefits, and to keep a slice of profit for themselves, by controlling when and how patients get healthcare.

And occasionally, those efforts lead to standoffs with health providers.

"We are hearing more stories of disputes across the country, which is raising concerns for people who are covered by Medicare Advantage plans, who thought that they could go see go to a particular hospital or go see a particular specialist and find themselves either out of luck or having to pay more to go see a doctor that they may have a long standing relationship with," said Tricia Neuman, senior vice president at KFF, a health policy research organization. "So, it is causing some anxiety for patients."

Paperwork headaches

While insurer-provider disputes are usually about prices for services, Baptist officials said their main issue with Medicare Advantage plans is the paperwork- and process-related hoops they use to keep a lid on spending.

"It is our experience – and the experience of other healthcare providers across the country – that many Medicare Advantage plans routinely deny or delay approval or payment for medical care recommended by a patient’s physician," Baptist Health said in a statement. "We think the need for medical care should be determined by a patient and his or her doctor, not an insurance company."

Dr. Kenneth Anderson, a pulmonologist who is transitioning from an administrative role as chief medical officer of Baptist Hospital, said he routinely navigates overly burdensome processes in his sleep medicine practice.

"A lot of (doctors) offices have more people in the back office than they have caring for the patient — getting the prior approvals, getting the appeal for the prior approvals, things of that nature," he said in an interview Wednesday. "And so I think that’s what we’re having discussions about — relief from that type of situation."

Humana, for its part, said it continues to talk to Baptist "in the hope of ultimately reaching an agreement," spokesman Mark Taylor said.

Meanwhile, the company said it still offers "a large network of highly-rated providers in Kentucky and we are working with our Medicare Advantage and Commercial Group members to help them select new in-network providers." (Humana is phasing out commercial insurance entirely.)

Medicare Advantage is Humana’s lifeblood, comprising most of the company’s earnings and its expected growth in revenue and profits over the coming years. It’s the second-biggest player in the business behind United Healthcare.

For Humana and its investor-owned peers like United and Aetna, trends in the volume of patients seeking medical care are closely tracked. Reporting its quarterly earnings last week, Humana noted that a 0.40 percentage-point uptick in its medical-benefit expenses is expected to persist, putting a damper on its projected profits in 2024.

"We’ve experienced higher-than-expected medical cost trend within Medicare Advantage business, and have worked hard to mitigate the impact of these trends in order to deliver on our," earnings targets, Humana chief financial officer Susan Diamond told Wall Street analysts on a conference call.

Despite the trouble he’s had getting an appointment with a neurosurgeon, Wallace — the Fern Creek retiree — said he isn’t planning to swap his Humana plan, nor to get out of Medicare Advantage entirely.

"I figure, why make it any more complicated?" he said.

Neuman, the Medicare expert with KFF, said that’s not uncommon. Despite an onslaught of advertising this time of year from Medicare Advantage insurers, many people tend to stay with whatever coverage they currently have.

"People feel like they don’t have the skill set to compare," she said. "And so they’re like, ‘I’ll stick with this, because it’s all I know.'"