HHS OIG: Medicare Advantage Organizations Issued Inappropriate Denials

CMS/Medicare

WASHINGTON, D.C. (May 3, 2022)—Medicare Advantage Organizations (MAOs) sometimes delayed or denied beneficiaries access to services according to a recent Health and Human Services Office of Inspector General (OIG) report. The denials occurred even when the requests met Medicare coverage rules. MAOs also denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules.

In the report the OIG noted that denied requests that meet Medicare coverage rules may prevent or delay beneficiaries from receiving medically necessary care and can burden providers. Although some of the denials reviewed were ultimately reversed by the MAOs, avoidable delays and extra steps create friction in the program and may create an administrative burden for beneficiaries, providers and MAOs.

Examples of health care services involved in denials that met Medicare coverage rules included advanced imaging services (e.g., MRIs) and post-acute facility stays (e.g., inpatient rehabilitation).

Prior Authorization Requests

In analyzing prior authorization requests, the OIG found that, among the prior authorization requests that MAOs denied, 13% met Medicare coverage rules and likely would have been approved for these beneficiaries under traditional Medicare. Two common causes of these denials were identified. First was the use of the MAOs clinical criteria that are not contained in Medicare coverage rules (e.g., requiring an x-ray before approving more advanced imaging), which led MAOs to deny requests for services that the OIG’s physician reviewers determined were medically necessary.

Second, MAOs indicated that some prior authorization requests did not have enough documentation to support approval, yet the OIG’s reviewers found that the existing beneficiary medical records were sufficient to support the medical necessity of the services.

Payment Requests 

The OIG found that, among the payment requests that MAOs denied, 18% of the requests met Medicare coverage rules and MAO billing rules. Most of these payment denials were caused by human error during manual claims processing reviews (e.g., overlooking a document) and system processing errors (e.g., the MAO’s system was not programmed or updated correctly).

Although the MAOs reversed some of the denied prior authorization and payment requests, these reversals often only occurred when a beneficiary or provider appealed or disputed the denial.

Recommendations 

  • Based on the audit findings the OIG recommend that CMS:
  • issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews;
  • update its audit protocols to address the issues identified in this report, such as MAO use of clinical criteria and/or examining particular service types; and
  • direct MAOs to take additional steps to identify and address vulnerabilities that can lead to manual review errors and system errors.

CMS agreed to all three recommendations.

Read the full report here.

—Via NAHC
 

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