Beneficiaries and providers rarely used the appeals process. Over the two years studied, beneficiaries and providers appealed only 1% of denials.
Patient advocates have raised concerns that the appeals process can be confusing and overwhelming, particularly for critically ill beneficiaries. The HHS OIG noted that patients may either be going without needed services or paying for them out of pocket because of this.
HHS' OIG said that some denials may stem from legitimate issues such as a plan determining that its original decision was incorrect, or they may have lacked necessary information to approve a claim, only to receive what they needed later.
Nevertheless, the HHS OIG wants the CMS to increase its oversight of Medicare Advantage plans to help ensure denials made by insurance companies are truly valid.
The agency should provide technical assistance, training, education and increased monitoring or enforcement actions for MAOs that exhibit higher denial rates. The CMS could impose civil money penalties if it finds claims are being denied for the wrong reasons or appeared to be motivated by profit, the watchdog said.
The CMS also could also require plans with repeated violations to hire independent auditors to perform program audits more frequently than the CMS is able to.
The CMS told the HHS OIG that it agreed that enhanced oversight of Medicare Advantage plans was needed, but it did not say what actions it will take to do so.
AHIP pushed back against the report highlighting the fact that MA plans approve the vast majority of prior authorization and payment requests they receive, according to Cathryn Donaldson, a spokeswoman for the trade association.
"It is also important to distinguish between patients getting needed care and providers receiving payment for services delivered, which the OIG reports in a combined fashion,"Donaldson said.
"A denial does not necessarily equate to patients not getting the care they need."
In addition, researchers often rank Medicare Advantage plans higher in terms of quality of care provided compared to Medicare fee-for-service, according to John Rother, who heads the National Coalition on Healthcare, a group of insurers and employers,
"Many researchers actually fear the converse that the incentives in the fee for service sector promote over treatment due to financial considerations [by providers]," Rother said. "Over treatment often results in extra expenses but can also result in harm to the patient."
Medicare Advantage enrollment has grown steadily over the past decade and shows no signs of slowing. About 21.4 million seniors are currently enrolled in Advantage plans, up 7.8% over last year, according to the latest data from the CMS. That represents about one-third of all Medicare beneficiaries.