During the last week of September 2018, the Office of the Inspector General (OIG) issued their findings on their review of the appeals process for Medicare Advantage (MA) plans. The report found that a significant number of Medicare Advantage Organizations (MAOs) overturned their own claim denials in 75% of filed appeals. The OIG report also found that only 1% of claims denials were appealed. This meant that in many circumstances providers were not receiving payment for services they had provided, and in other situations beneficiaries were not receiving the required treatment due to prior authorization denials.
The OIG stated that they undertook this investigation out of concerns that the capitated payment model used in MA program may provide incentives for MAOs to inappropriately deny access to services and payment in an attempt to increase their profits.
When Medicare beneficiaries are denied prior authorization for services or providers are denied payment, there exists a right to appeal. The MA appeals process is comprised of four levels of administrative review by a variety of Centers for Medicare and Medicaid Services (CMS) contractors. The first level of appeal is typically performed by the MAO that issued the denial, although appeals for certain types of services are independently reviewed by a Quality Improvement Organization. If the first level of appeal results in an unfavorable or partially unfavorable result, the appellant can continue to higher levels of appeal. The second level of appeal is with an Independent Review Entity, followed by an administrative law judge, and finally, the Medicare Appeals Council.
The OIG’s report also contained recommendation to CMS to potentially correct the problems with the MAO’s handling of appeals. The OIG issued the following three recommendations, (which CMS accepted); CMS should, (i) enhance its oversight of MAO contracts, including those with extremely high overturn rates and/or low appeal rates, and take corrective action as appropriate; (ii) address persistent problems related to inappropriate denials and insufficient denial letters in Medicare Advantage; and (iii) provide beneficiaries with clear, easily accessible information about serious violations by MAOs.
What does this report mean for providers and beneficiaries? Both providers and beneficiaries should clearly avail themselves of the MA Appeals Process when denied payment or prior authorization. The combination of the small percentage of denials appealed and the high success rate of appeals is a clear indication that providers are allowing MAO’s to essentially increase their profits on the backs of providers, while beneficiaries are being inappropriately denied treatment. Providers may also work with, or on behalf of, beneficiaries to appeal denials for treatment and other services. Moreover, the recommendation made by the OIG to CMS will result in greater scrutiny of MAOs, which will likely increase the number of favorable appeals and a reduce the number of denied prior authorizations.
Frier Levitt has extensive experience in representing clients at all levels of the Medicare Appeals Process. If you are a provider that is being denied claims for services provided to a Medicare beneficiary, contact Frier Levitt for assistance in navigating the appeals process.
