Addressing concerns about improper denials in Medicare Advantage

A Medicare Advantage plan denied coverage for a walker a physician ordered for a 76-year-old patient at risk of falling. The insurance company reported denying the walker because the patient received a cane in the past five years. A cane no longer provided the support the patient required to walk safely, and no Medicare coverage requirement imposes such five-year limit. Another plan denied the MRI a physician ordered to assess why a 69-year-old’s pain and weakness continued five months after a fall. The insurance company’s stated reason was that the patient did not first receive an X-ray. An X-ray could not detect the damage the physician suspected, and no Medicare rule mandates such X-ray prior to MRI.

Insurers running MA plans sometimes limit access to care that should be covered for Medicare beneficiaries. Sometimes, this poses only inconvenience. Other times, it blocks patients from getting necessary, timely care.

Our office, the Office of Inspector General for the U.S. Department of Health and Human Services, recognizes that when MA plans correctly deny payment for services not meeting coverage rules or appropriately require patients to get prior authorization before obtaining certain services, they can drive proper utilization and reduce costs. But when MA plans incorrectly use these processes, they impede access to needed services.

Recently, OIG reported that some MA organization denials of prior authorization requests raise concerns about beneficiary access to medically necessary care. We found that 13% of denied prior authorization requests and 18% of denied payment requests were for care that actually met Medicare coverage rules. Sometimes insurers said the request lacked necessary information, but all necessary documentation was there. Many beneficiaries and providers have experienced this. Some give up. Some seek alternate care or pay out of pocket. Some resubmit repeatedly. Obtaining medically appropriate care should not require such resolve.

Our recent study builds on prior OIG work. In 2018, we reported that MA appeal outcomes and audit findings raise concerns about service and payment denials. The insurance companies running MA plans overturned 75% of their own prior authorization and payment denials upon appeal. Essentially, beneficiaries or providers who persisted were mostly successful. But these individuals only appealed about 1% of denials.

Why would insurers incorrectly deny claims? The insurers generally say it is simply human error. The Centers for Medicare and Medicaid Services employs audit and other review procedures to identify insurance companies that make excessive errors or issue too many incorrect denials. Such oversight exists to prevent insurers from trying to save money by purposefully avoiding necessary expenditures, such as by broadly denying appropriate requests. Even if errors are later corrected, incorrect initial denials can be problematic. We are especially concerned that appeals processes and other complex paperwork could be harder for some beneficiaries to navigate based on factors like financial resources, health status, or education level. Many providers devote substantial effort to prior authorization requests, appealing incorrect denials, and other non-reimbursable administrative tasks. We hope that reducing unnecessary administrative barriers would decrease the burden on providers.

So what can providers do to make a significant difference?

Physicians and other healthcare practitioners can encourage patients and families not to be intimidated by insurance companies. And providers can advise patients that they shouldn’t necessarily take an initial “no” for a final answer and that they can consult the appeal rights of MA beneficiaries on CMS’ website.

Providers can also gather information about the impact of utilization controls on patient care. If you identify patterns of inappropriate denials or utilization controls that impede access to necessary care, share your data with CMS, the insurer and professional associations.

Insurers should review their policies and jettison ones that create unnecessary administrative burden.

Government will work to help insurers get coverage and payment decisions right, providing guidance to prevent problems and enhanced oversight for plans that fall short.

The past two years have taught us much. In some ways, the COVID-19 pandemic has driven patients to become more engaged in their healthcare. OIG’s recent findings suggest potential benefits to patients, providers and healthcare industry leaders through greater engagement in coverage and payment activities as well.