Medicare Advantage Regulatory Scrutiny Keeps Pace with

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On April 28, 2022, the United States Division of Health and Human Services’ Place of work of Inspector Normal (“OIG”) issued a report obtaining that 15 of the premier Medicare Benefit Organizations (“MAOs”) in the United States have at times denied or delayed beneficiary accessibility to care and service provider payment requests for providers that satisfied Medicare protection and MAO billing procedures (the “Report”). The OIG dependent its conclusions on a stratified random sample of 250 prior authorization and 250 payment denials chosen from June 1–7, 2019, and identified that several things impacted denials, which include the imposition of MAO clinical criteria that are not contained in Medicare protection regulations, MAO requests for supplemental documentation in spite of adequate showings of medical requirement, and both equally human and method problems.1 The Report follows OIG’s prior review of a stratified random sample of prior authorization denials in 2018, which discovered that 75% of prior authorizations reviewed and denied by the nation’s largest MAOs were ultimately accepted as a result of the MAO attraction approach.2 Amidst heightened scrutiny of MAO chart evaluation and health and fitness possibility evaluation procedures, and ongoing accelerated growth of the Medicare Edge application, the Report reiterates OIG’s worry that capitated payments less than the Medicare Advantage method may possibly develop incentives to limit entry to necessary companies and restrict or hold off company reimbursement.3,4

I. OIG’s Results: Prior Authorization and Payment Denials

The Report cited Medicare direction and the two human and software mistake in the sample reviewed as principal reasons for MAO prior authorization and payment request denials that satisfied Medicare protection guidelines and MAO reimbursement demands. The Report initially concentrated on prior authorization denial tactics, and found that among people prior authorization requests reviewed that MAOs denied, 13 % achieved Medicare protection regulations. OIG cited two key motives for these denials. Initial, the Facilities for Medicare and Medicaid Providers (“CMS”) permits MAOs to impose additional medical requirements as circumstances for prior authorization to those people commonly necessary by conventional Medicare, supplied these criteria are no more restrictive than, and do not contradict, Medicare’s Regional Coverage Perseverance (“Lcd”) or Countrywide Coverage Resolve (“NCD”) typical policies.5 The Report cited as illustrations of MAO clinical criteria reviewed but not in any other case demanded by Medicare protection procedures: (i) proscribing obtain to abide by-up MRIs based mostly on the dimensions of a beneficiary’s lesion (delivering that a legion lesser than 2 cm is not eligible for adhere to-up just before one particular year) and (ii) necessitating a beneficiary to acquire an X-ray prior to covering a CT scan. OIG remarked that current direction is “not sufficiently detailed” to suggest no matter if CMS would look at the denials in OIG’s sample to be inappropriate, and steerage is usually lacking as to what varieties of medical standards would be considered no more “restrictive” than Medicare protection regulations offered that they are proof-centered and do not contradict Liquid crystal display or NCD expectations.6

The Report discovered MAO requests for supplemental healthcare documentation, regardless of OIG reviewers obtaining ample documentation in the sample data offered, as a second cause for prior authorization denials for providers assembly Medicare protection demands. OIG cited human and computer software method faults as the major reasons for these denials, but also noted that CMS permits MAOs to impose heightened payment verification standards via their billing and payment processes furnished that companies are paid correctly, well timed and with an audit trail.7 However, OIG cited illustrations of faulty documentation requests in the Report, including requests (a) for beneficiary health and fitness status (e.g., previous medication use or potential to use wheelchair in home) even while these documentation was on file with the MAO and (b) documentation of beneficiary’s main insurance coverage carrier even while this kind of documentation was by now integrated in the first declare submission.8

Eventually, OIG observed that faulty payment denials reviewed ended up principally induced by human mistake during guide claims-processing assessments (e.g., overlooking a document) and technique processing errors (e.g., the MAO’s method was not programmed or up-to-date appropriately). In specific, MAOs generally rely on employees to review manually requests for payments prior to approval on the other hand, OIG pointed out that manual critiques are vulnerable to human error (e.g., overlooking a document in the situation file or inaccurately deciphering Medicare or MAO protection regulations). For instance, in a person instance OIG uncovered that an MAO misclassified an in-community SNF service provider as an out-of-network company for payment needs, and that in an additional, an MAO denied a payment ask for for a assistance demanding prior authorization even however these kinds of prior authorization experienced been submitted.9 In addition, the Report warned that process processing errors may possibly crank out a greater volume of incorrect denials. OIG cited an instance in its evaluate in which an MAO’s program assigned an incorrect provider tax identification quantity to a provider, which incorrectly categorized the service provider as out-of-network the MAO described that the exact same error might have influenced 163 more statements.

Of note, OIG acknowledged that for 3 percent of prior authorization denials and six per cent of payment denials reviewed, MAOs finally reversed their denials. It however warned that relying on beneficiary appeals to protect accessibility to necessary providers can make a substantial stress and barrier to access to care, and delays linked to payment appeals may possibly build administrative burdens for MAOs, beneficiaries, and companies alike.10

II. OIG’s Tips

In mild of the earlier mentioned results, OIG issued a few suggestions to CMS, every of which CMS accepted:11

  1. OIG advised that CMS challenge extra guidance on the necessity that MAO scientific criteria should not be “more restrictive” than Medicare protection policies, and that the direction really should contain precise examples of requirements that would be thought of allowable and unallowable. OIG also proposed CMS to instruct MAOs to analyze and revise their processes for making protection determinations, as essential, considering CMS’s new guidance. CMS confirmed its intent to issue new steerage on the proper use of MAO medical standards for health care requirement evaluations.12
  2. OIG proposed that CMS intently scrutinize MAOs applying a lot more restrictive scientific conditions than expected by Medicare or requesting needless documentation in connection with prior authorizations, stick to its conventional enforcement system to decide culpability and penalties, as applicable, and take into consideration aggravating factors in civil revenue penalty calculations if prior authorization denials confined beneficiary access to treatment. OIG also encouraged close audits of prior authorization denials connected to imaging, write-up-acute facility stays, and injections, as the Report recognized disparate denial costs for these companies in the course of OIG’s assessment. CMS approved this advice and agreed to update its audit protocol and auditor teaching supplies, as required, to align with the advice that it ideas to issue under the initial advice.13
  3. OIG proposed that CMS get the job done with MAOs to strengthen their internal systems to reduce the varieties of glitches recognized in the Report. To avoid method errors, OIG advised that CMS immediate MAOs to take more actions to make sure that any improvements affecting coverage or payment are appropriately coded in their devices. OIG also suggested that CMS immediate MAOs to think about supplemental employees instruction on documentation verification. CMS agreed to direct MAOs to acquire supplemental actions to detect and handle vulnerabilities, and to analyze their guide overview and system programming procedures and to address vulnerabilities that may possibly consequence in inappropriate denials.14


Ropes & Grey will continue to keep an eye on developments in this place. If you have any thoughts, be sure to do not wait to call the authors or your regular Ropes & Gray advisor.

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