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HomeHealth LawHHS OIG Report On Prior Authorizations Beneath Medicare Benefit

HHS OIG Report On Prior Authorizations Beneath Medicare Benefit


Final month, the U.S. Division of Well being and Human Providers Workplace of Inspector (“OIG”) launched a report that studied prior authorization denials and fee denials by Medicare Benefit Organizations (“MAOs”) (the “Report”). Whereas the Report discovered that the “overwhelming majority” of prior authorizations and fee requests had been accredited, the Report targeted on the discovering that MAOs “generally” denied prior authorization and fee requests that met Medicare protection guidelines claiming that the denials delayed or denied beneficiaries’ entry to medically essential companies.

The Report is one other instance of the OIG fanning the fireplace of criticism of MAOs by ignoring the overwhelming proof that MAOs present entry to medically essential companies and likewise minimized this system necessities and steerage from the Facilities for Medicare and Medicaid Providers (“CMS”), with which MAOs should comply.

The OIG Report

The examine randomly chosen 250 denials of prior authorization requests and 250 fee denials issued by 15 of the most important MAOs between June 1-7, 2019. The ultimate examine was based mostly 247 prior authorization and 183 fee circumstances as soon as ineligible circumstances had been excluded.  Well being care coding consultants reviewed case recordsdata for all circumstances and doctor reviewers examined medical information for a subset of the circumstances.

The Report included 4 key findings.

  1. 13 p.c of denied prior authorization requests met Medicare protection guidelines.

In accordance with the Report, these companies doubtless would have been accredited beneath authentic Medicare protection guidelines. There have been two widespread causes for these denials. First, MAOs denied the requests by making use of MAO scientific standards that aren’t required by Medicare. Second, MAOs denied requests when suppliers didn’t reply to requests for “pointless” documentation (e.g., extra check outcomes). In accordance with the Report, in some circumstances, MAOs discovered a previous authorization request didn’t have enough documentation for approval even when the beneficiaries’ scientific data case file was enough to assist the medical necessity of the companies.

  1. Eighteen p.c of fee denials had been for claims that met Medicare protection guidelines and MAO billing guidelines.

Denial of fee requests delayed or prevented funds for companies that suppliers had already delivered. In accordance with the Report, nearly all of these fee denials had been attributable to human error throughout handbook claims-processing critiques or by inaccurate programming of claims processing methods.

  1. Three of essentially the most outstanding service sorts among the many denials that met Medicare protection guidelines had been: imaging companies (e.g., MRIs and CT scans), stays in post-acute amenities, and injections.

Concerning denials of imaging companies, the Report indicated that MAOs usually said {that a} extra fundamental imaging service or conservative therapy have to be carried out first. Denials of transfers to post-acute care amenities, akin to inpatient rehabilitation amenities or skilling nursing amenities, from hospitals had been as a result of claimed intensive remedy or expert care not being wanted and a decrease degree of care, akin to house well being companies, would suffice. In accordance with the Report, the doctor panel engaged by the OIG discovered that in these circumstances, sufferers would have benefitted from the upper degree of care and the choice companies provided by the MAOs had been clinically inadequate.

  1. Some prior authorization and fee requests denials which met Medicare protection guidelines and MAO billing guidelines had been later reversed.

Most reversals of prior authorization request denials occurred as a result of beneficiaries or their suppliers filed appeals. Cost request denials had been later reversed when physicians introduced proof that the MAO ought to have accredited fee, akin to a earlier approval, or prompted the MAO to acknowledge system or handbook errors.

The Report included suggestions for CMS, which administers the Medicare Benefit program: CMS ought to challenge new steerage on the suitable use of MAO scientific standards in medical necessity critiques that aren’t contained in Medicare protection guidelines. The Medicare Managed Care Handbook instructs that MAO inside insurance policies for medical necessity determinations should use “protection standards no extra restrictive than Medicare’s nationwide and native protection insurance policies.”[1] Nevertheless, CMS has not make clear what varieties of scientific standards could be thought-about “extra restrictive.” Per the Report, extra steerage would assist guarantee beneficiaries obtain all medically essential and lined companies in addition to promote MAO compliance with Medicare protection guidelines.[2]

The Report cites just one obligation imposed on MAOs with respect to medical necessity determinations, failing to say that MAOs should:

  • Should have insurance policies and procedures, that’s, protection guidelines, follow tips, fee insurance policies, and utilization administration, that permit for particular person medical necessity determinations (42 CFR §422.112(a)(6)(ii)).
  • Should make use of a licensed doctor as a medical director who’s chargeable for making certain the scientific accuracy of all group determinations and reconsiderations involving medical necessity.
  • If the MAO expects to challenge {a partially} or absolutely hostile medical necessity resolution based mostly on the preliminary evaluate of the request, the group dedication have to be reviewed by a doctor or different applicable well being care skilled with enough medical and different experience, together with data of Medicare protection standards, earlier than the MAO points the group dedication resolution.
  • Should make determinations based mostly on: (1) the medical necessity of plan-covered companies – together with emergency, pressing care and post-stabilization – based mostly on inside insurance policies (together with protection standards no extra restrictive than authentic Medicare’s nationwide and native protection insurance policies) reviewed and accredited by the medical director; (2) the place applicable, involvement of the group’s medical director per 42 CFR §422.562(a)(4); and (3) the enrollee’s medical historical past (e.g., diagnoses, circumstances, useful standing), doctor suggestions, and scientific notes.
  • Should settle for and course of appeals in line with the principles set forth at 42 CFR Half 422, Subpart M, and chapter 13 of the Medicare Managed Care Handbook.[3]

One other advice of the Report is CMS also needs to replace its audit protocols to deal with the problems recognized within the Report. For instance, auditors may study whether or not MAOs requested pointless documentation. Audits can goal particular service sorts with a historical past of inappropriate denials, together with the three recognized within the Report. Moreover, CMS ought to think about extra enforcement actions for MAOs with a sample of inappropriate fee denials.

Lastly, the Report recommends that CMS ought to direct MAOs to look at their processes for handbook evaluate and system programming errors. MAOs can be directed to offer extra employees coaching on the documentation that must be verified earlier than a denial is issued and the extent of documentation that’s required.

Whereas CMS concurred with the Report’s suggestions, CMS additionally famous notes “that the general Medicare Benefit fee request denial price cited by OIG for 2018 (9.5 p.c) is corresponding to the unique Medicare denial price throughout the identical time interval.”  (emphasis added)

Business Response

In an article printed on April 29, 2022, America’s Well being Insurance coverage Plans (“AHIP”) blasted the Report claiming that, “[w]hen checked out correctly, the information truly inform a compelling story of worth and entry.”  AHIP famous that the OIG’s pattern was ”terribly small,” taking a look at 247 prior authorization requests throughout one week in June 2019, and elevating considerations with solely 33 of them.

The article additionally identified the function of prior authorization as “an essential affected person security, cost-saving, and waste-prevention device.”

One factor the Report and AHIP agree on is Medicare Benefit could be very fashionable with Medicare beneficiaries. The Report famous that, in 2021, 42 p.c or 26.4 million Medicare beneficiaries had been enrolled in a Medicare Benefit plan, and that 51 p.c of all Medicare beneficiaries will likely be enrolled in Medicare Benefit by 2030.[4]

[1] CMS, Medicare Managed Care Handbook, Ch. 4, Sec. 10.16.

[2] The Medicare Managed Care Handbook additionally instructs MAOs that “[m]edical information from suppliers additionally could also be utilized by MAOs for [a]dvance determinations of protection … “[m]edical necessity”.  Id. at Sec.10.5.4.

[3] Id. at Sec. 10.16.

[4] Medicare Benefit in 2021: Enrollment Replace and Key Traits | KFF.

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