OIG Report Shows Physicians Fail to Appeal Payment Denials 99% of the Time

An extraordinary recent Office of Inspector General (OIG) report provides objective evidence that physician groups are owed billions. As Provider advocates, Frier Levitt challenges improper claim denials by Medicare Advantage Organizations (MAOs) in Medicare Advantage (MA) capitated plans. Frier Levitt has consistently written about how MAOs deny preauthorization and claims for payment in order to increase profits, all at the expense of beneficiaries and providers. Skeptics would say our pro-provider views are advocacy, but an objective OIG report justifies our long-standing position and serves as a “call to action.”

Providers have long been concerned about MAO conduct, and the OIG has now published supportive findings. “A central concern about the capitated payment model used in MA plans is the potential incentive for MAOs to inappropriately deny access to services and payment in an attempt to increase profits.” The OIG found that MAOs’ inappropriate denial of authorization or payments contributes to physical or financial harm and misuses Medicare Program dollars that CMS paid for beneficiary healthcare. The scope of the problem is substantial, as MA plans cover 20 million beneficiaries. The data is alarming, but so too is inaction by physician groups.

The OIG’s study of three years of MAO denials reveals shocking statistics about MA appeals.┬áMAOs denied 36 million payment requests and 1 million pre-authorization requests. “Providers may not be getting . . . payments that MAOs are required to provide.” But, Providers appeal only 1% of denials. Compressed reimbursement rates and shrinking margins do not support inaction.

Providers mistakenly believe that MAO claim denial appeals are futile or too expensive. But the OIG report, confirming Frier Levitt’s experience, shows that appeals are often successful. When beneficiaries and providers appeal, “MAOs overturn their own denials 75% of the time,” and most of these denials were for services already provided. These high number of overturned denials raised concerns that MA providers were initially denied services and payments that should have been provided. Providers “rarely used the appeals process, which is designed to ensure access to care and payment.” The OIG concluded that “more action is needed to address these critical issues.” Frier Levitt’s action plan is to obsessively appeal wrongful payment denials.

Attorney assistance is necessary to combat the sharp practices of MAOs. The OIG found that 45% of MAOs send denial letters with incomplete or incorrect information which may inhibit beneficiaries and providers’ ability to file a successful appeal. Frier Levitt’s MA Appeal group is experienced dealing with such tactics, and can often provide representation on a subscription-based or contingent model. Contact Frier Levitt today to speak to an attorney.