BIG denounces MAOs for inappropriate refusals
OIG Report: Widespread and Persistent Problems with Inappropriate Denial of Services and Payments by Medicare Advantage Organizations.
Organizations continue to see rejection management as an Achilles heel in the revenue cycle. Insufficient documentation, system flaws and human intervention errors are common reasons for generating a claim denial.
U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) involvement with Medicare Advantage Organizations (MAOs) brings increased awareness and anticipated improvement to the claims payment process and, ultimately, the patient experience.
The Medicare Fee for Service (FFS) program provides coverage for a range of health services. MAO is expected to provide the same coverage as traditional health insurance, but with the added benefit of coordinating care for beneficiaries. As with many managed care plans, care coordination is meant to improve efficiency and quality of care while controlling costs. MAOs may require specific stipulations in addition to traditional Medicare coverage requirements, for example, prior authorizations, physician referral, and required use of in-network physicians for specialty services. Funded payment models, to include Medicare Advantage, raise a primary concern of payers who deny access to service and/or payment to improve benefits.
The OIG conducts annual random reviews of claims denied by MAO. In 2015, the Centers for Medicare & Medicaid Services (CMS) cited more than half of claims denied by MAO for prior authorization or payment were inaccurate. In 2018, CMS revealed that 75% of MAO’s initial denials were overturned. This year, OIG reviewed claims data from 15 of the largest MAOs, totaling 500 claims from June 1-9, 2019. Using a random sample, expert coders and/or medical reviewers reviewed the reliability of 250 prior authorization request refusals and 250 payment requests. denials.
The objectives of the review were clear; determine the extent to which selected MAOs denied prior authorization requests that met traditional Medicare coverage rules, uncover the reasons for such denials, identify health services meeting Medicare and MAO coverage and billing requirements that continue to receive rejections. Thirteen percent of prior authorization denials were related to claims that met Medicare coverage but were denied by MAO due to their clinical criteria, not included in Medicare coverage. Nevertheless, upon review by a physician, the services provided were deemed medically necessary. Refusals also included in the 13% refusal rate are related to insufficient documentation to support a billed service. CMS reviewers were able to locate the documentation in the medical record.
Eighteen percent of chargebacks are related to human error during manual review of claims or system faults due to incorrect or outdated programming. System errors are of great concern because initial denials are generated automatically, which can create more inaccurate denials. These denials increase the burden on organizations to uncover the root cause and appeal many claims.
High-cost imaging, post-acute nursing facilities, and acute inpatient rehabilitation were among the first services initially denied. AAMs often refuse expensive services and offer an alternative option in an effort to keep costs down. It was also noted that pain management injections were triggering a high volume of refusals due to the increase in pain management fraud and abuse; therefore, these services are under the watchful eye of MAO examiners.
The OIG recommends that MAOs evaluate the use of clinical criteria, reassess the root cause of denial volume regarding insufficient documentation when documentation is present, and assess system vulnerabilities for algorithms or updates. incorrect days, both of which require manual intervention in order to file an appeal. CMS accepted all OIG recommendations.
Overcoming refusals is a costly administrative burden that directly affects the patient experience during or after direct care. Unsubstantiated denials of medical necessity can prevent the patient from accessing needed services unless they agree to pay out of pocket.
Of the 15 MAOs included in the sample, United Healthcare Group, Humana, CVS Health Corporation, Kaiser Health Foundation Plan, and Anthem are the top five in terms of enrolled beneficiaries and/or covering the most states or territories. Medicare Advantage had 26.2 billion beneficiaries in 2021 with a projected 51% increase in plan members by 2030. Nine percent of claims included in the OIG review were initially denied by Medicare Advantage and then canceled in three months following a call. Health organizations are buried in their attempt to implement a denial management plan with no relief in sight.
Hopefully, the OIG’s findings will spark productive discussions between payers and providers, where progress in this area has historically been lacking.
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