Report: Medicare Advantage Plans Wrongly Deny Care, Physician Payments

Report: Medicare Advantage Plans Wrongly Deny Care, Physician Payments

Feds found 18% of physician payment requests that were turned down met Medicare rules

Medicare Advantage plans often denied medically necessary care to beneficiaries and payments to doctors that met Medicare coverage rules, according to a new report from the HHS Office of the Inspector General (OIG).

OIG found that 13% of prior authorization requests that were denied met Medicare coverage rules, as did 18% of physician payment requests that were turned down.

The type of care denied typically involved advanced imaging services, such as MRIs, and stays in post-acute care facilities, the report stated.

The report added that plans denied these services and requests by using clinical criteria that are not contained in Medicare coverage rules, by requesting unnecessary documentation, and via genuine error.

“Although [Medicare Advantage Organizations (MAOs)] approve the vast majority of requests for services and payment, they issue millions of denials each year and CMS’s annual audits of MAOs have highlighted widespread and persistent problems related to inappropriate denials of services and payments,” the report stated.

Concern about those denials is growing as Medicare Advantage is increasingly responsible for more Medicare beneficiaries. In 2021, 42% of all Medicare beneficiaries were enrolled in a Medicare Advantage plan, and that is projected to rise to about 51% by 2030, according to the report.

“As enrollment in Medicare Advantage continues to grow, MAOs play an increasingly critical role in ensuring that Medicare beneficiaries have access to medically necessary covered services and that providers are reimbursed appropriately,” the report stated.

In a statement, American Medical Association President Gerald E. Harmon, MD, said the findings “mirror physician experiences.”

“Surveys of physicians have consistently found that excessive authorization controls required by health insurers are persistently responsible for serious harm when necessary medical care is delayed, denied, or disrupted,” he said.

Harmon added that “more needs to be done to reform prior authorization” and noted that the bipartisan Improving Seniors’ Timely Access to Care Act would help rein in excessive and unnecessary prior authorization requirements by requiring Medicare Advantage plans to “streamline and standardize prior authorization processes and improve the transparency of requirements.”

Because Medicare Advantage is a capitated payment model where companies are paid a fixed amount per beneficiary, there’s a potential incentive for insurers to deny access to services and payment in an attempt to increase profits, the report stated.

For their report, OIG investigators used a random sample of 430 denials from the 1-week period of June 1-7, 2019, to estimate the rate at which 15 of the largest MAOs denied prior authorization and payment requests that met Medicare coverage rules. The sample accounted for nearly 80% of beneficiaries enrolled in Medicare Advantage as of June 2019.

Commonly used methods for denying care included using clinical criteria that aren’t in Medicare coverage rules, such as requiring an x-ray before approving more advanced imaging, the report stated. Plans also asked for unnecessary documentation — for instance, they indicated that some prior authorization requests did not have enough documentation to support approval, yet reviewers found that beneficiary medical records in the case file were sufficient to support medical necessity.

The report found that most physician payment denials were caused by human error during the manual claims processing reviews (such as overlooking a document) or system processing errors.

Investigators discovered that plans reversed some of the denied care and payment requests that met Medicare coverage rules, typically when a beneficiary or provider appealed or disputed the denial, though in some cases plans identified their own errors. It’s not clear, however, how frequently such appeals are filed, or how often plans discover their errors.

The report concluded with three recommendations for CMS: 1) issue new guidance on appropriate use of MAO clinical criteria in medical necessity reviews; 2) update audit protocols to address issues such as MAO use of clinical criteria; and 3) direct MAOs to take steps to identify and address vulnerabilities that can lead to both manual review and system errors.

In a statement to MedPage Today, a CMS spokesperson said the agency agrees with all of the recommendations and is “actively reviewing the findings to determine appropriate next steps.”

The agency conducts audits of Medicare Advantage plans and can target those audits to “areas of concern, such as service types with a high rate of denial.” CMS will notify plans of non-compliance, and plans must submit corrective action plans, the spokesperson said. Plans that have “repeated violations are subject to increasing penalties … and even contract terminations.”

Plans are required to cover all Medicare Part A and Part B services, but they can “apply internal coverage policies, including additional coverage requirements to better define the need for the service, that are no more restrictive than Traditional Medicare’s national and local coverage policies to ensure that plan-covered items and services are medically necessary and appropriately targeted to the individual’s condition and diagnostic needs,” the spokesperson added.

The spokesperson continued that plans can also “apply third-party guidelines, such as guidelines used by contractors engaged by the Medicare Advantage plan to make coverage determinations” for services that aren’t subject to existing local and national coverage requirements.

Medicare Advantage Prgm are health insurance provided by FOR PROFIT INSURANCE COMPANIES – emphasis on PROFIT… the FEDS gives them Medicare Advantage programs a certain $$$/month/pt and they give the prgm a list of benefits that they can provide.  They can provide as many or as few as they believe that they can do and still show a profit.   This article suggests that all insurance companies are pretty much the same, indicate that they are going to cover and pay for a particular service/product and then try to decline to pay.

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