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HomeHealth LawHHS OIG Report On Prior Authorizations Underneath Medicare Benefit

HHS OIG Report On Prior Authorizations Underneath Medicare Benefit


Final month, the U.S. Division of Well being and Human Companies 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 centered on the discovering that MAOs “typically” denied prior authorization and fee requests that met Medicare protection guidelines claiming that the denials delayed or denied beneficiaries’ entry to medically crucial providers.

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 crucial providers and likewise minimized this system necessities and steerage from the Facilities for Medicare and Medicaid Companies (“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 primarily based 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 keeping with the Report, these providers seemingly would have been accredited underneath authentic Medicare protection guidelines. There have been two frequent 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., further take a look at outcomes). In keeping with the Report, in some circumstances, MAOs discovered a previous authorization request didn’t have adequate documentation for approval even when the beneficiaries’ scientific info case file was adequate to assist the medical necessity of the providers.

  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 providers that suppliers had already delivered. In keeping with the Report, nearly all of these fee denials had been brought on by human error throughout handbook claims-processing critiques or by inaccurate programming of claims processing programs.

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

Concerning denials of imaging providers, the Report indicated that MAOs typically acknowledged {that a} extra primary imaging service or conservative therapy should be carried out first. Denials of transfers to post-acute care services, resembling inpatient rehabilitation services or skilling nursing services, from hospitals had been as a result of claimed intensive remedy or expert care not being wanted and a decrease degree of care, resembling residence well being providers, would suffice. In keeping 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 providers 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. Fee request denials had been later reversed when physicians offered proof that the MAO ought to have accredited fee, resembling 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 inner insurance policies for medical necessity determinations should use “protection standards no extra restrictive than Medicare’s nationwide and native protection insurance policies.”[1] Nonetheless, CMS has not make clear what forms of scientific standards can be thought-about “extra restrictive.” Per the Report, further steerage would assist guarantee beneficiaries obtain all medically crucial and lined providers 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, apply pointers, 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 accountable 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 opposed medical necessity resolution primarily based on the preliminary assessment of the request, the group dedication should be reviewed by a doctor or different acceptable well being care skilled with adequate medical and different experience, together with data of Medicare protection standards, earlier than the MAO points the group dedication resolution.
  • Should make determinations primarily based on: (1) the medical necessity of plan-covered providers – together with emergency, pressing care and post-stabilization – primarily based on inner 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 acceptable, 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, purposeful 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 handle the problems recognized within the Report. For instance, auditors may look at 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 contemplate further 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 assessment and system programming errors. MAOs will also be directed to supply further workers 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 charge cited by OIG for 2018 (9.5 p.c) is similar to the unique Medicare denial charge 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 info really inform a compelling story of worth and entry.”  AHIP famous that the OIG’s pattern was ”terribly small,” 247 prior authorization requests throughout one week in June 2019, and elevating issues with solely 33 of them.

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

One factor the Report and AHIP agree on is Medicare Benefit could be very well-liked 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 probably 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 Tendencies | KFF.

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