The Problem and Scope

A recent headline in USAToday caught our eye: “Watchdog: Private Medicare plans denied nearly 1 in 5 claims that should have been paid.”1 The “watchdog” in question, the Office of the Inspector General (OIG) of the US government’s Department of Health and Human Services, issued the report on April 27, 2022.2 The OIG took a randomized sample of 250 prior authorization denials and 250 payment denials that were issued by the 15 largest Medicare Advantage Organizations (MAOs). Their findings indicate issues with the privatization of Medicare, which has more than doubled in the past decade and is expected to account for more than half of all enrollees by 2030, according to a Congressional Budget Office (CBO) report.3  

MAOs’ Selling Points

The USAToday article lists the common refrain of any MAO television commercial. “Medicare Advantage plans tout perks such as limited out-of-pocket costs, vision and dental benefits not offered by traditional Medicare, and even gym memberships.” They come with serious caveats, as the author notes: “But the plans employ private insurance industry tactics to reduce costs. These plans restrict networks of doctors other medical providers people can use, mandate authorization for some services and require referrals for specialists.”1  

How the Problems Occur

As the OIG news release states, “CMS annual audits of MAOs have highlighted widespread and persistent problems related to inappropriate denials of services and payment. As Medicare Advantage enrollment continues to grow, MAOs play an increasingly critical role in ensuring that Medicare beneficiaries have access to medically necessary covered services and that providers are reimbursed appropriately.”2 They explained that their “case file reviews determined that MAOs sometimes delayed or denied Medicare Advantage beneficiaries’ access to services, even though the requests met Medicare coverage rules. MAOs also denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules.”2 Furthermore, they found that of both the prior authorization and payment denials, many did meet the stated Medicare criteria, or there were additional criteria added that weren’t actually in the Medicare coverage rules. 

What Does It Mean?

These denials have manifold ramifications – in time, money, and health outcomes: 

  • Rosemary Bartholomew, a Medicare Advantage expert who led the team that authored the OIG report, was quoted in the USAToday article, as saying, “beneficiaries may be denied care they need or might pay for services their plans should cover.”1 
  • She additionally thought that since they are for-profit entities, there might be an incentive to deny care to increase profits, since Medicare has set rates for reimbursement. 
  • USAToday quoted Jack Hoadley, a Georgetown University McCourt School of Public Policy research professor emeritus, as saying that he feels “the report suggests some private Medicare plans are aggressive at denying or delaying care.”1 
  • This affects both patients and providers, due to additional paperwork burdens created by having to appeal claims that shouldn’t have been denied in the first place. 

What Can Be Done?

The report gives some suggestions: 

  • “Issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews;  
  • update its audit protocols to address the issues identified in this report, such as MAO use of clinical criteria and/or examining particular service types;
  • and direct MAOs to take additional steps to identify and address vulnerabilities that can lead to manual review errors and system errors.”2 

An Additional – and Conclusive Step – to Fix These Issues

Advantum Health can forcefully assist the provider too. We routinely perform coding audits, prior authorization, denial management, and other preemptive actions and prescriptive solutions to stem this very type of situation! Please contact us today for assessment on how we can prevent unnecessary MAO denials for you.