OIG study investigates wrongful denials from MAOs

Wednesday, May 11, 2022

Medicare Advantage Organizations (MAO) sometimes inappropriately delay or deny beneficiaries’ access to medically necessary care, according to a recent Office of Inspector General (OIG) report. The report, released April 27, isn’t the first time the agency has raised concerns about MAOs’ denial practices and the capitated payment model used in Medicare Advantage.

The Office of Inspector General (OIG) conducted a study using a sample of 250 of these payment denials and 250 of these prior authorization denials, according to the April report. The study found that, even if the services met the rules for Medicare coverage, Medicare Advantage beneficiaries were sometimes denied access to services such as advanced imaging services and postacute facility stays.

Providers were also denied payments for services even though the services met Medicare coverage and MAO billing rules. These potentially inappropriate denials can delay beneficiaries from getting the medically necessary care they need and burden providers.

Additionally, the study found that since 13% of these prior authorization requests and 18% of these payment requests met original Medicare rules, original Medicare would have likely approved them. Here are the two common causes identified for the denials:

  • The clinical criteria used by the MAOs are not contained in Medicare’s rules for coverage.
  • According to the MAOs, some of the requests for prior authorization didn’t have sufficient documentation for approval. However, the OIG reviewers found that the beneficiaries’ medical records supported medical necessity for the services.

To prevent future denials, the OIG recommended that CMS issues new MAO clinical criteria guidance for medically necessity reviews, updates its protocols for audits, and directs MAOs on how to avoid manual review and system errors. CMS concurred with the recommendations. The agency said that it plans to issue clarifying guidance for MAOs on the use of clinical criteria in medical necessity reviews and will update audit protocols and reviews as necessary in accordance with the new guidance.

Editor’s note: Access more NAHRI resources on Medicare Advantage reimbursement and denials here.