Probe finds Medicare Advantage plans deny needed care to tens of thousands

Medicare Advantage Organizations (MAOs) delayed or denied payments and services to patients, even when these requests met Medicare coverage rules, according to a report released by federal investigators on Thursday.

The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) reviewed a random sample of 250 prior authorization denials and 250 payment denials that were issued in 2019 by 15 of the largest MAOs.

The 15 selected MAOs accounted for almost 80 percent of beneficiaries enrolled in Medicare Advantage in June 2019.

The office conducted this review out of concern that Medicare Advantage’s payment model incentivized denying payments and services.

“Our case file reviews determined that MAOs sometimes delayed or denied Medicare Advantage beneficiaries’ access to services, even though the requests met Medicare coverage rules,” the OIG said. “MAOs also denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules.”

According to the report, 13 percent of prior authorization requests that were denied met Medicare coverage rules, which MAOs are required to follow, meaning they would likely have been approved under original Medicare. Among the payment requests that were denied, 18 percent met Medicare coverage rules with most of the denials caused by human error.

According to the OIG, there were common reasons why requests that met Medicare rules were denied. First, MAOs used clinical criteria that were not in Medicare coverage, such as requiring tests before other procedures, which resulted in medically necessary services being denied.

Second, MAOs often claimed that there was not enough documentation to support the requests, which the OIG deemed to be “unnecessary,” with existing medical records often being sufficient enough to support a claim.

In some cases when services were denied, MAOs would offer “insufficient” alternatives. The OIG pointed to how post-acute services such as those often provided in rehabilitation centers were often denied due to being more expensive than home services.

In one specific case, post-acute services were denied for a beneficiary who was experiencing pain and swelling due to a serious bacterial skin infection and bed sores. The patient’s condition impacted their ability to lead a daily life without assistance, which met Medicare rules for skilled nursing facility care. Ultimately, this specific patient’s denial was appealed and reversed.

The OIG recommended issuing new guidance on “appropriate use of MAO clinical criteria,” an update of audit protocols and for MAOs to identify and address issues that cause errors in reviews. Centers for Medicare & Medicaid Services has concurred with these recommendations.