Prior authorization under fire in Inspector General investigation
An investigation from the Office of the Inspector General (OIG) regarding prior authorization requirements in Medicare Advantage (MA) plans revealed concerns about access to care.
The investigation covered a stratified random sample of 250 denials of prior authorization requests and 250 payment denials issued by 15 of the largest Medicare Advantage Organizations (MAOs) during June 1−7, 2019. Prior authorization is a management process used by healthcare payors to determine if they will cover a medical procedure, service or treatment. Critics of prior authorization argue the process is a significant burden to healthcare providers and patients, potentially delaying essential care or wrongly denying services.
A report of the investigation found that MAOs deny millions of prior authorization requests, even when those services would have been covered under regular Medicare.
“We found that among the prior authorization requests that MAOs denied, 13[%] 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),” the report stated.
The OIG noted its concern that MAOs deny prior authorization requests to maintain profits. Furthermore, MAOs based denial decisions on criteria that are not contained in Medicare coverage rules, such as requiring an X-ray before approving advanced imaging. MAOs also requested unnecessary documentation, though OIG’s reviewers found that the beneficiary medical records already in the case file were sufficient to support the need for services.
Among the payment requests denied by MAOs, 18% met Medicare coverage rules and MAO billing rules. Most of these denials were a result of human error during manual claims-processing reviews, such as overlooking a document and system processing errors.
The American Medical Association (AMA) agreed with the findings of the investigation and supports efforts to reduce the burdens of prior authorization. The findings come as MA plans are gaining more market share of the Medicare population. Twenty-six million more Americans, or 42% of the Medicare population, are enrolled in MA plans, according to data from the Kaiser Family Foundation.
“Surveys of physicians have consistently found that excessive authorization controls required by health insurers are persistently responsible for serious harm when necessary medical care is delayed, denied, or disrupted,” Gerald E. Harmon, MD, president of the AMA, said in a statement. “The American Medical Association agrees with the federal investigators’ recommendations for preventing inappropriate use of authorization controls to delay, deny and disrupt patient care, but more needs to be done to reform prior authorization.”
The AMA also urged Congress to approve The Improving Seniors’ Timely Access to Care Act (HR 3173 / S 3018), which would require Medicare Advantage plans to streamline and standardize prior authorization processes and improve the transparency of requirements.
“The time is now for federal lawmakers to act to improve and streamline the prior authorization process so that patients are ensured timely access to the evidence-based, quality healthcare they need,” Harmon said.
See the full OIG report here.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."