Retirees Flee City Medicare Program as Deadline Looms for Move to Private Health Plan

Some retirees fault union leaders for agreeing to the plan.

“The president of my local was on the Municipal Labor Committee board, and he okayed this,” Kitt said. “How could you do that to your retirees?”

Several major unions, including the United Federation of Teachers, DC37, Teamsters Local 237, Local 831, and the Police Benevolent Association, could not be reached or did not respond to requests for comment.

‘Very Generous Benefits’

Ana Champeny, director of city studies at the fiscally conservative budget watchdog Citizens Budget Commission, said that the city is presenting retirees with a “set of reasonable options where they can make the choices for themselves.”

“These are very generous benefits, even compared to other municipalities.” Champeny said. “These costs need to be reined in.”

Meanwhile, the Medicare Advantage move is the subject of two lawsuits seeking to prevent its implementation, both of which are being heard Wednesday in State Supreme Court in Manhattan.

One, filed by insurance giant Aetna, which submitted a bid for the contract that was awarded to the Alliance, claims that the Office of Labor Relations violated city procurement law in awarding the contract, and that EmblemHealth and Empire Blue Cross Blue Shield misrepresented their qualifications during the bidding process.

In a brief filed in response to the lawsuit, the Alliance denied “each and every allegation, statement, and matter” in Aetna’s suit.

A spokesperson for the Alliance declined to comment on the pending litigation, and did not address New York Focus’ questions on retirees’ concerns with the plan.

The second lawsuit, filed by the NYC Organization of Public Service Retirees, argues that the plan violates retirees’ collective bargaining agreements with the city.

Doctor Uncertainty

Beyond cost, retirees cite a smaller network of doctors and potential barriers to care as more reasons they’re wary of the new plan.

The size of the network covered under the Alliance’s plan is significantly smaller than retirees’ current offerings: the Alliance said it includes 640,000 providers nationwide, compared to the 850,000 who participate in traditional Medicare.

Several retirees told New York Focus that their providers have indicated they will avoid dealing with the new Medicare Advantage program. Alan Odze, a retired NYPD officer and 9/11 first responder, who submitted an affidavit in support of the retirees’ lawsuit, said the office of the doctor who treats his melanoma told him they will not accept the Alliance plan.

The city has disputed this claim, and said in its response to the retiree organization’s lawsuit that the doctor, Paul Finger, has contracted to be in-network under the Alliance’s plan.

Asked by phone last week whether Finger’s practice would accept the Alliance plan, a representative of the practice responded: “We don’t know enough about it right now to answer that question.”

“The one thing I can tell you is that people are nervous about it,” the representative said. “We are getting lots of calls regarding it.”

Of the 880 retirees who responded to the NYC Organization of Public Service Retirees’ survey, 46.2% said that at least some of their doctors told them either that they will not accept the Alliance’s plan or that they had not heard of it. Just 2.5% said that their providers would accept the plan.

City officials say more providers will join the network after implementation, once they see that the Alliance reimburses providers at the same rate as Medicare. “Once out-of network doctors understand the new program, they will accept direct payment and many will join the network,” Claire Levitt, deputy commissioner of the City’s Office of Labor Relations, said in an affidavit responding to one of the lawsuits.

Brown University School of Public Health professor David Meyers said that’s not a given, since each new health plan brings new headaches for doctors’ offices. “Paperwork can be an enormous burden for providers, and the more plans a provider is in-network for, the greater that administrative burden would be,” he said.

The Alliance also claims that retirees would be able to access care at no additional cost even if their preferred providers are not in-network. That’s because, the Alliance says, it will reimburse any doctor who is a Medicare provider at the same rates as Medicare.

But in an affidavit, Kimberly Parker, an administrator of the city’s health plans, acknowledged that it’s “theoretically possible” that a provider would decline to accept payment from the Alliance. In that case, retirees would have to pay their providers out-of-pocket and submit claims for reimbursements to the Alliance.

Dianne Archer, president of informational health site Just Care, said that this process could impede retirees from getting needed care. “Health care bills can be astronomical. Members might not have the means to pay up front for their care,” she said.

‘For The Rest of Your Life’

Retirees are also concerned that the Alliance’s plan requires that doctors get case-by-case approval for the Alliance to cover various categories of treatment, a process known as prior authorization.

A partial list of services that will require prior authorization, published by the Alliance, includes knee and hip replacements, occupational therapy, pain management, physical therapy, tonsillectomies, CT scans, echocardiograms, MRI, day hospital admissions, inpatient admissions, and intensive outpatient therapy.

Other than for “durable” medical equipment (such as walkers or oxygen tanks), prosthetics, and certain physician-administered drugs, traditional Medicare rarely requires prior authorization.

A document published by the Alliance says that in-network providers are required to request prior authorization in order to receive payment for some types of care, and that if they do not do so, they are not permitted to bill patients for the cost of their care.

However, out-of-network providers are not required to request prior authorization before administering treatment. If requests submitted after treatment are denied, out-of-network providers are allowed to charge patients the full cost of their treatments.

“There’s no telling how many people…will not understand that their out-of-network providers should request prior authorization and will be responsible for the full cost of their care,” Archer said.

Between the potentially smaller networks, higher costs and barriers to service, some retirees feel that their trust in the city during their careers was misplaced.

“They told me: ‘You will have your benefits for the rest of your life,’” Kitt said. “So now, I’m not happy.”