May 25, 2022

There are few things more frustrating than having insurance that doesn’t cover you in a crunch. It’s like paying for an exorbitant house warranty only to discover in the dead of winter that it didn’t pay to replace your non-functional furnace. That can be a shattering (and, in this case, a shivering) experience. Well, that’s the state of affairs more and more seniors are finding themselves in when it comes to their Medicare Advantage plan; and the end result is a financial setback for America’s hospitals.

Signs of Concern

Last month, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) published a report outlining its findings with respect to improper denial of services within the Medicare Advantage program. Entitled, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care,” the report stated that the OIG’s review into Medicare Advantage payment practices determined that Medicare Advantage organizations (MAOs) “sometimes delayed or denied Medicare Advantage beneficiaries’ access to services, even though the requests met Medicare coverage rules.” The OIG findings also indicated that MAOs denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules. While some of the denials were ultimately reversed by the MAOs, avoidable damage was done, according to the report. Examples of inappropriate denials included advanced imaging services (e.g., MRIs) and stays in post-acute facilities (e.g., inpatient rehabilitation facilities).

The OIG also found that, among the prior authorization requests that MAOs denied, 13 percent met Medicare coverage rules. There were two common causes of these denials. First, MAOs used clinical criteria that are not contained in Medicare coverage rules (e.g., requiring an x-ray before approving more advanced imaging). Second, MAOs indicated that some prior authorization requests did not have enough documentation to support approval; yet the OIG found that the medical records in many such case did, in fact, contain sufficient support for the medical necessity of the services.

Finally, the OIG found that 18 percent of denials for payment did, in fact, meet Medicare coverage rules and MAO billing rules. Most of these payment denials were found to be 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).

Righting the Wrong

In its concluding section of the report, the OIG laid out three specific recommendations to the Centers for Medicare and Medicaid Services (CMS) to consider, which are as follows:

1. Issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews.
   
2. Update audit protocols to address the issues identified in this report, such as MAO use of clinical criteria and/or examining particular service types.
   
3. Direct MAOs to take steps to identify and address vulnerabilities that can lead to manual review errors and system errors.

While CMS has already concurred with all three recommendations, others are taking a different tack. In a May 19 letter to the U.S. Department of Justice (DOJ), the American Hospital Association (AHA), in response to the OIG report, urged the government to establish a task force with the express purpose of conducting False Claims Act investigations into commercial health insurance companies that are found to routinely deny patients access to services and deny payments to healthcare providers. The words of the AHA’s general counsel could not have been more direct:

As you know, the Medicare Advantage program is designed to cover the same services as original Medicare, and by law, Medicare Advantage Organizations (MAOs) may not impose additional clinical criteria that are “more restrictive than original Medicare’s national and local coverage policies.”  HHS-OIG found that some of America’s largest MAOs have been violating this basic legal obligation at a staggering rate.

Pulling no punches, the AHA letter goes on to stress that the OIG recommendations for corrective action relative to the current situation do not go far enough. Instead, the lobbying organization—representing 5,000 hospitals—asserted that the time has come for the DOJ “to exercise its False Claims Act authority to both punish those MAOs that have denied Medicare beneficiaries and their providers their rightful coverage and to deter future misdeeds.”

The AHA’s general counsel concludes her letter to the DOJ by requesting the department’s Civil Division to focus more directly on those commercial insurers that commit the fraud outlined in the OIG report. Specifically, the AHA formally called on the government to create a “Medicare Advantage Fraud Task Force” to investigate those MAOs potentially engaged in inappropriate or fraudulent behavior.

If you wish to contact us, please go to the following link: info@miramedgs.com.