Seventy-seven-year-old Angela Dispenza considers herself fiercely independent. She lives in a modest home with her 83-year-old sister in Queens, N.Y., where she tends her garden and walks to mass each Sunday. She says she loves to spend time in her neighborhood.
The one place she does not like being is in the hospital.
But this summer, the usually active senior citizen found herself on a stretcher in the emergency room at nearby Jamaica Hospital after falling at home.
"I don't want to be here," Dispenza said of her hospital stay. "I've got a house to take care of [and] bills."
Dispenza's family says after the fall, she could not care for herself, much less her home.
After her pain became too much to handle, she was brought to the hospital, where doctors diagnosed Dispenza with a fractured spine.
Multiple physicians confirmed the finding and recommended that Dispenza be admitted to the hospital for pain management and further treatment. But when hospital staff asked Dispenza's insurance company, Oxford, to authorize her admission to the hospital, the company refused.
Hospital workers say they tried repeatedly to explain to representatives from Oxford why Dispenza needed to be admitted.
Lisa Schneider, the director of social work at Jamaica Hospital, said the insurance company told staff members that "she's not for admission," and "that she did not need to be in the hospital."
Schneider says she was surprised by the difficulty staff members had getting Dispenza's care approved, because she is a senior citizen.
That's because most seniors in the United States are enrolled in the government-run health care system called Medicare. As part of the program, seniors are typically treated immediately by hospitals and doctors when they need care.
Medicare does not require patients to receive "pre-authorization" before being treated. The government negotiates the rates at which it will reimburse medical providers for the medical care in advance, and pays providers once the care is provided.
While Dispenza had the option to enroll in the government-run Medicare system when she reached retirement age, several years ago she and her sister opted to enroll in a new version of the program called Medicare Advantage, which is run by private insurance companies.
Originally called Medicare Choice, the program was conceived during the Clinton administration as a way to reduce the escalating cost of Medicare. Supporters argued private insurers could provide medical services to seniors more efficiently than Washington, and could reduce the amount of money the government spent on the program. The program remained small through most of the 1990s.
During the Bush administration's push to add prescription drug coverage to Medicare during 2002 and 2003, the program — renamed Medicare Advantage — was overhauled. To entice insurers to create Medicare Advantage plans and enroll seniors, the annual government payments to participating insurers were increased. Almost immediately, analysts say, insurance companies saw a potential financial windfall and began creating new plans and signing up seniors.
As of November 2007, nearly 9 million seniors — or 1 in 5 of those enrolled in Medicare — have opted for a Medicare Advantage plan.
But as enrollment has swelled and new plans created, critics have become more vocal in their complaints about how Medicare Advantage works.
David P. Rosen, the president and CEO of Jamaica Hospital, said he believes the program is short-changing seniors like Dispenza.
Rosen said this is especially true in areas where the hospital must receive "pre-authorization" from a senior's Medicare Advantage plan before treating a patient.
"We see frequent evidence of denial of care that would have been a no-brainer under the conventional Medicare program," Rosen said.
Government audits and other reports appear to back up Rosen's concerns. ABC News reviewed hundreds of audit reports created by the Centers for Medicare and Medicaid Services. The audits showed Medicare Advantage providers with backlogs of unanswered patient complaints, plans that improperly denied claims, and concerns about marketing practices which do not follow government guidelines.
'Not Medically Necessary'
In Dispenza's case, her Medicare Advantage plan — which is run by United Healthcare's subsidiary, Oxford — denied a series of pre-authorization requests by Jamaica hospital staff.
Despite Oxford's refusal to authorize payment for the care, Jamaica Hospital says it had no choice but to treat Dispenza, because of the condition she was in. To send her home, Rosen said, would have been tantamount to malpractice. So doctors admitted Dispenza to an in-patient room after she arrived in the emergency room, and began providing her pain medication.
Staff members say even after Dispenza was admitted, they continued to call the insurer to ask Oxford to authorize her stay. Without the authorization, the hospital says, Oxford will not pay for any of the care it provides, even if doctors believe it is necessary.
In a wide-ranging interview with "Good Morning America's" Chris Cuomo, staff members who cared for Dispenza said no matter what evidence supporting the need for Dispenza's care the hospital provided to Oxford, requests for authorization were denied.
ABC News reviewed medical records, voice mail recordings and letters sent by Oxford that support the staff members' claims.
Schneider said she was especially disheartened by Oxford's refusal to pay for acute, or in-patient rehabilitation, a type of intensive physical therapy offered in the hospital, even though Dispenza's doctors said it provided the best chance for her to walk again.
Nicole Barone, a social worker who worked with Dispenza, says the type of rehabilitation the hospital requested did not seem unusual for the injuries Dispenza sustained.
Yet, Barone says the case manager at Oxford, who had never met Dispenza, told her the senior was not a candidate for rehabilitation and would be better off living in long-term care facility than living at home.
"She said that I should go in and speak to the family regarding whether they wanted to privately pay for her to go into a nursing home," Barone said.
Barone said she was told Oxford would not cover nursing home expenses.
Frustrated by her interactions with the case manager, Barone asked her supervisor, Schneider, for assistance.
"We had basically begged them, give us a week," Schneider said. "Try her for a week. If she doesn't work for a week, then what are you gonna do? You're not gonna pay us, anyway? We're going to be in the same boat we're in now."
But Schneider said the company told hospital staff "no."
"Absolutely not," Schneider said.
ABC News obtained a copy of a letter Oxford sent to Dispenza in August 2007. The letter said acute rehabilitation was "not medically necessary" for her.
Critics of the program — including Jamaica's CEO, Rosen — say denying care for Medicare Advantage patients is not good medicine. But, Rosen said, it is good business for insurance companies.
"They're making a lot of money," Rosen said. "All you need to do is look at their financials."
Last year, Oxford's parent company, United Healthcare, made more than $4 billion. Analysts say some of that profit came from the strength of the company's Medicare Advantage products, which are paid for by the federal government.
In fact, Democrats in Congress have now begun investigating the rates Washington pays to insurance companies. Recent reports by several government agencies — including the Congressional Budget Office — show Medicare Advantage plans actually cost the government an average of 12 percent more each year to run than traditional Medicare, even though the program was designed to save tax dollars.
'Stay in My Bed And Die'
Barone said after Oxford refused to authorize Dispenza's treatment, the hospital was told to send her home. Dispenza was in too much pain to ride in a regular car, Barone said, so she was sent home in the back of an ambulance.
Barone was asked to tell Dispenza about Oxford's decision. "She said, 'well, I guess I'm just gonna stay in my bed, then, and die.'"
After a week at home, Dispenza was back in the emergency room after a therapist visiting her discovered she had developed bed sores. Jamaica Hospital says it admitted Dispenza again without Oxford's pre-authorization.
In an interview with Chris Cuomo, Dispenza said she was frustrated by the repeated denials from Oxford.
"How dare you do these things to me!" Dispenza told Cuomo when asked what she would say to Oxford. "I was paying every year. Every year. I never failed to pay. That's why they took me in."
Dispenza told Cuomo she just wanted to leave the hospital walking.
ABC News asked Oxford and its parent company United Healthcare to respond to Dispenza's situation on camera. The company refused and directed ABC News to the insurance industry's trade group, America's Health Insurance Plans.
In an interview with Cuomo, the group's spokesperson, Susan Pisano, said seniors who are enrolled in Medicare Advantage, receive better care than those enrolled in traditional Medicare.
"One thing you get if you join the Medicare Advantage plan is better benefits, get broader benefits, you get lower out-of-pocket costs," Pisano said.
While seniors may get broader benefits, however, the program does have a trade-off: Medicare Advantage plans decide what care seniors get.
Pisano told Cuomo that insurance companies' decisions about whether or not someone is admitted to the hospital is "not just a question of money."
"People should be admitted to a hospital when they need to be admitted to a hospital," Pisano said. "But if they shouldn't be there, then a hospital brings risks with it that shouldn't — you shouldn't have to confront unnecessarily."
"Do you think that happens a lot — that somebody goes to the hospital and doesn't really need to be there?" Cuomo asked.
Pisano asked if Cuomo was talking about a particular patient.
"No, literally, I could be talking about hundreds of patients," Cuomo said. "The insurance companies will not talk to me about the specific cases. How are you supposed to get answers?"
"Well, I think, culturally, it's not something that companies are attuned to, talking about specific, you know, private patient issues publicly," Pisano said.
Even though United Healthcare refused to authorize payment for in-patient rehabilitation for Dispenza, the hospital provided it to her this fall, anyway. Rosen said the hospital had both a moral and legal obligation to assist her, even without insurance company approval.
Cuomo also filed an appeal on behalf of Dispenza, after she designated him her authorized representative to the insurer. The appeal was written on ABC News stationary and detailed the care the insurance company apparently refused to authorize.
United Healthcare responded to the appeal a month after it was sent.
The company's response did not directly answer the questions in the appeal, nor did it explain if the company was wrong to refuse authorization for Dispenza's care.
The letter did, however, state that Dispenza was not responsible for any payment — beyond her usual co-payments — for the care she received. United Healthcare said in the letter the payment issue was between the company and the hospital.
Dispenza said she is lucky, because she received in-patient rehabilitation from Jamaica Hospital, despite Oxford's refusal to authorize her treatment.
After several weeks of rehabilitation, Dispenza is now getting around with the aid of a walker. She was recently discharged from the hospital and is now home with her sister and her garden.