Southwest Medical reverses decision on traditional Medicare patients

Southwest Medical Associates said Thursday it is reversing its decision to stop providing care next year to about 7,000 Southern Nevada seniors with traditional Medicare plans.

In a statement to the Review-Journal, which first reported the health care provider’s plan two weeks ago, Southwest Medical said it was reversing course after receiving complaints from patients who said they would be forced to find new doctors.

“After listening to our patients, Southwest Medical will continue providing care to our current Original Medicare patients, and we are reaching out to them to make sure they know this,” it said.

Greg Griffin, chief operating officer of Southwest, declined to say how many angry consumers contacted Southwest.

While the company will continue to offer coverage to its current patients with traditional or original Medicare plans, it said that it will not offer those plans to new customers in Southern Nevada as of Jan. 1.

Southwest Medical, one of only two major health care providers in Southern Nevada offering traditional Medicare coverage, will continue to offer Medicare Advantage plans from private insurance plans, which can be more costly.

‘That’s fair’

The company’s reversal satisfied 66-year-old Anne Zarate, who had complained that the timing of the company’s decision to abandon the traditional Medicare market appeared to be an effort to upsell patients to Medicare Advantage plans.

“I think that’s fair,” she said Thursday. “That’s new business for them, and they can do what they want with that.”

She also wondered if Southwest was concerned about losing many of its traditional Medicare patients to rival HealthCare Partners of Nevada. Officials with Heathcare Partners told the Review Journal this week they gladly would accommodate all of Southwest’s patients.

Southwest had no comment.

Griffin, the Southwest COO, declined to say why patients said they wanted to stay on traditional fee-for-service Medicare plans when Southwest offers Health Maintenance Organization Medicare Advantage plans that do not cost patients an extra premium and offer zero dollar co-pays and deductibles and vision and dental benefits.

But David Karel, a Las Vegas insurance broker specializing in Medicare plans, said flexibility is generally a big reason cited by patients.

Traditional Medicare patients can go to any doctor or specialist that accepts Medicare, while patients on a private HMO Medicare Advantage plan generally can use only in-network providers and must get a referral to see a specialist. And if you go outside the plan, you might be required to pay for all or most of the services, he added.

Zarate prefers the flexibility that allows her to pick any physician she wants. She bought a Medigap policy that covers the portion of health care costs that traditional Medicare doesn’t pick up — generally about 20 percent.

So if she wants to see a specialist in California or Texas for a health problem, she can do so without worrying about the cost.

More flexibility, more dollars

Providers offer Advantage plans known as Preferred Provider Organization plans that provide more flexibility, but those can cost between $49 and $129 more a month, Karel said.

Those plans don’t require a referral to see a specialist or allow a patient to see out-of-network providers, but the patient might have to pay more for a visit.

Those plans still don’t provide as much flexibility as original Medicare with a Medigap supplement, he said.

Southwest, an affiliate of UnitedHealth Group’s Optum Care unit, will continue to offer two UnitedHealthcare Medicare Advantage plans to new patients in Southern Nevada.

According to Karel, what helps make Advantage plans so profitable is that the government pays insurers a predetermined amount for an Advantage patient, regardless of what treatment they receive. With their provider networks, which give them leverage to bargain for favorable rates from medical practitioners and facilities, that helps them reduce costs and increase profits, he said.

UnitedHealth Group is defending itself against a lawsuit filed in May by the U.S. Justice Department over its Medicare Advantage plans.

That lawsuit alleges that UnitedHealth made patients appear sicker on paper than they really were —“upcoding” — to bilk the government out of billions, $3 billion from 2010 to 2015 alone.

With Medicare Advantage patients,the government pays insurers a predetermined amount for each person enrolled based on insurer-supplied “risk scores,” rather than than paying fees for service, as is done for traditional Medicare.

A UnitedHealth spokesman said the lawsuit is without merit.

Contact Paul Harasim at pharasim@reviewjournal.com or 702 387-5273. Follow @paulharasim on Twitter.