The Office of Inspector General is cracking down on Medicare Advantage prior authorizations that were denied which would have been approved under fee-for-service Medicare rules. Excerpts from the OIG Medicare Advantage prior authorizations denial report follow, quoted in full, arranged for clarity, and followed by our comments.
The OIG audited “a stratified random sample of 250 denials of [Medicare Advantage] prior authorization requests and 250 payment denials issued by 15 of the largest MAOs during June 1−7, 2019.”
Inappropriately denied Medicare Advantage prior authorizations are the evil twin of up-coding. But rather than boosting profits by improperly increasing Risk Adjustment scores, this practice retains profits by denying appropriate care.
Medicare Coverage Rules
MAOs must follow Medicare coverage rules, which specify what items and services are covered and under what circumstances. Because MAOs must provide beneficiaries with all basic benefits covered under original Medicare, they may not impose limitations—such as waiting periods or exclusions from coverage due to pre-existing conditions—that are not present in original Medicare.
A central concern about the capitated payment model used in Medicare Advantage is the potential incentive for Medicare Advantage Organizations (MAOs) to deny beneficiary access to services and deny payments to providers in an attempt to increase profits.
Access to quality healthcare is a human right, and CMS wants to ensure that money is not getting in the way of that. Value-Based Care payment models are designed to align financial incentives with patient outcomes. On one side of the equation, CMS and the DOJ regularly audit (and prosecute) health plans and provider groups for up-coding or over-coding diagnoses that are not supported in the documentation – essentially, getting paid for providing needless care that does not benefit patients. In this report, OIG is looking at the other side of the coin: patient care that should have been provided, but was denied in appropriately.
Both are financial mechanisms to boost earnings or cut costs at the expense of patient care. And while we usually focus on the HCC coding and documentation side of the fence, denying care that should have been approved is potentially worse. Up-coding raise costs unnecessarily, but patients are still receiving care – although at times needlessly. By highlighting the problem of inappropriately denied care, OIG is actually uncovering a problem that is, in essence, refusing to provide appropriate and necessary care.
MAOs denied prior authorization and payment requests that met Medicare coverage rules by:
- using MAO clinical criteria that are not contained in Medicare coverage rules;
- requesting unnecessary documentation; and
- making manual review errors and system errors.
By ratcheting up the clinical criteria beyond Medicare rules, MAOs that inappropriately deny coverage or payments are skimming the til at the expense of patient care.
By requiring unnecessary documentation beyond CMS guidelines, an MAO can appear to be taking documentation and accuracy very seriously, when in fact, they are actually just withholding care for profit.
What OIG Found
Our 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. Denying requests that meet Medicare coverage rules may prevent or delay beneficiaries from receiving medically necessary care and can burden providers. Although some of the denials that we reviewed were ultimately reversed by the MAOs, avoidable delays and extra steps create friction in the program and may create an administrative burden for beneficiaries, providers, and MAOs. Examples of health care services involved in denials that met Medicare coverage rules included advanced imaging services (e.g., MRIs) and stays in post-acute facilities (e.g., inpatient rehabilitation facilities).
Prior authorization requests.
We found that among the prior authorization requests that MAOs denied, 13 percent met Medicare coverage rules—in other words, these services likely would have been approved for these beneficiaries under original Medicare (also known as Medicare fee-for-service). We identified 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), which led them to deny requests for services that our physician reviewers determined were medically necessary. Although our review determined that the requests in these cases did meet Medicare coverage rules, CMS guidance is not sufficiently detailed to determine whether MAOs may deny authorization based on internal MAO clinical criteria that go beyond Medicare coverage rules.
Second, MAOs 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.
Again, increasing clinical documentation requirements beyond CMS’ requirements is not cool.
We found that among the payment requests that MAOs denied, 18 percent met Medicare coverage rules and MAO billing rules. Most of these payment denials in our sample were 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). We also found that MAOs reversed some of the denied prior authorization and payment requests that met Medicare coverage rules and MAO billing rules. Often the reversals occurred when a beneficiary or provider appealed or disputed the denial, and in some cases MAOs identified their own errors.
What OIG Recommends
Our findings about the circumstances under which MAOs denied requests that met Medicare coverage rules and MAO billing rules provide an opportunity for improvement to ensure that Medicare Advantage beneficiaries have timely access to all necessary health care services, and that providers are paid appropriately.
Therefore, we recommend that CMS:
(1) issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews;
(2) 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
(3) direct MAOs to take steps to identify and address vulnerabilities that can lead to manual review errors and system errors. CMS concurred with all three recommendations.
In effect, the OIG is recommending adding a category to the already rigorous audits associated with MAOs. RADV audits may in the near future also address inappropriately denied Medicare Advantage prior authorizations.
So the takeaway here is to aim for the Goldilocks of clinical documentation integrity: neither too lax nor too strict, but just right, in line with CMS guidelines.
As always, we have an app for that. HCC education that helps your team achieve that perfect zen-like balance of accurate diagnoses, properly documented and ready for any audits. We deliver just-in-time learning on HCC codes related to conditions specific to the upcoming patient visits. And your clinicians earn 25 hours of CME per year, while operations achieves the Goldilocks of documentation: not too hot, and not too cold.