MEDICAL/LEGAL
Fixing prior authorization in Medicare Advantage By Jarrod Fowler, MHA, FMA Director of Health Care Policy and Innovation | Updated May 5, 2022
Last week, the U.S. Department of Health and Human Services Office of Inspector General (OIG) released a report showing that Medicare Advantage plans often inappropriately delayed or denied care. The report found that, among the prior authorization requests that Medicare Advantage (MA) plans denied, 13% actually met Medicare coverage rules. In other words, these services would have been approved for beneficiaries enrolled in Traditional Medicare. As the OIG put it, “Medicare Advantage Organizations denied prior authorization requests for services that were medically necessary by applying clinical criteria that are not contained in Medicare coverage rules.” Further, “Medicare Advantage organizations indicated that some prior authorization requests did not have enough documentation to support approval, yet our reviewers found that the beneficiary medical records already in the case file were sufficient to support the medical necessity of the services.” Supposing MA plans regularly deny valid prior authorizations at the frequency found in this study, that indicates inappropriate denial of 84,812 prior authorizations in 2019 alone. In addition, among payments that were denied by Medicare Advantage, 18% met traditional Medicare’s coverage and billing rules. As stated by the OIG, “Eighteen percent of payment denials were for claims that met Medicare coverage rules and Medicare Advantage billing rules, which delayed or prevented payments for services that providers had already delivered.” If MA plans regularly denied medically necessary services at the frequency reported in this study, that means 1.5 million payment requests were inappropriately denied in 2019. In response to these findings, the OIG recommended the following: 1. Issuing new guidance on the appropriate use of MA organization clinical criteria in medical necessity reviews; 2. Updating audit protocols to address the issues identified in this report, such as MA organization use of clinical criteria and/or examining particular service types; and 3. Directing MA organizations to take steps toward identifying and addressing vulnerabilities that can lead to manual review errors and system error.
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