The title of a recent report on Medicare Advantage prior auth practices sums up its findings with a flat statement that could result in future reforms: “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care.”
About 13% of prior authorization denials in Medicare Advantage likely prevented or delayed necessary care, according to the analysis by the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG). The report also found that nearly one-fifth of the time Medicare Advantage plans denied payment requests when the request met Medicare coverage rules and should have earned approval.
The Texas Medical Association has raised similar warnings during its crusade to curb insurers’ prior authorization burdens, which netted a new state law during the 2021 state legislative session that allows physicians to earn an exemption from preauthorization. Meanwhile, the Centers for Medicare & Medicaid Services (CMS) agreed with OIG’s recommendations for prior auth reforms within the Medicare Advantage program. The OIG study sampled 430 combined prior authorization and payment denials from 15 of the largest Medicare Advantage organizations (MAOs) during the week of June 1-7, 2019, to create estimated numbers of denials for prior auth and for payment during that week.
Among OIG’s findings:
- Out of nearly 12,300 estimated prior authorization denials, a projected 1,631 of those service requests – or 13% – met Medicare coverage rules and “likely would have been approved … under original Medicare (also known as Medicare fee-for-service).” If the MAOs denied the same number of preauthorization requests every week during 2019, it would have added up to nearly 85,000 requests denied despite meeting coverage rules.
- Eighteen percent of more than 160,000 estimated payment denials met both Medicare coverage and MAO billing rules, and “should have been approved by the MAOs.” Annually, that projects to 1.5 million requests denied despite following the rules.
The report said many of the prior authorization denials came from MAOs “applying MAO clinical criteria that are not required by Medicare.” The report details examples of MAOs that “used specific, mandatory requirements that resulted in the denial of prior authorization requests for medically necessary services.”
Prior authorization denials of requests that meet coverage rules “can create significant negative effects for Medicare Advantage beneficiaries,” the report noted. “These denials can delay or prevent beneficiary access to medically necessary care; lead beneficiaries to pay out of pocket for services that are covered by Medicare; or create an administrative burden for beneficiaries or their providers who choose to appeal the denial.”
Most of the payment denials OIG found were the result of human error during manual claims-processing review and system errors, according to the report.
OIG saw its findings as an “opportunity for improvement” on creating access to all necessary care for Medicare Advantage patients. It recommended that CMS:
- Issue new guidance on the appropriate use of MAO clinical criteria in reviews for medical necessity;
- Update its audit protocols to address the problems the report identified, such as MAOs’ use of clinical criteria; and
- Direct MAOs to take action to identify and address vulnerabilities that can lead to system errors and manual review errors.
CMS agreed with the recommendations, the report said.
Last Updated On
May 06, 2022
Originally Published On
May 06, 2022