Survey: 13% Of Medicare Advantage Claims, Prior Authorization Requests Denied

Survey shows 13% of Medicare Advantage enrollees had a claim or pre-authorization  request denied | Healthcare Finance NewsSource: Fierce Healthcare, by Robert King

A recent survey of Medicare Advantage enrollees found 13% had a claim or pre-authorization request denied as the program has gotten scrutiny over its prior authorization practices.

 

The survey, released Monday by the online insurance marketplace eHealth, also found that 67% of respondents chose MA over Medigap due to concerns over its affordability. The MA market has become an increasingly lucrative one for insurers, as projections expect enrollment to surpass traditional Medicare in the coming years.

“As demonstrated in this report, we found that a striking majority of Medicare Advantage enrollees are satisfied with their plans,” the survey said.

EHealth’s survey of more than 2,800 MA enrollees last month showed that a large majority (77%) did not have their claims or prior authorization requests denied, while 10% did not know and 13% reported they did have rejections.

Of the 13% who were denied coverage, 3% said they could not get a specific drug and 2% were for coverage visits.

“Those who experienced a self-reported denial of coverage include many who were declined for things like dental and vision care, which aren’t typically covered by Medicare,” the survey report said.

In addition, 43% of respondents who did have a claim or prior authorization request denied say their plan told them the claim was excluded from coverage. Another 15% said coverage was denied because the service wasn’t medically necessary.

But 15% of respondents who had a claim or request denied said that the insurer eventually paid it later.

The findings come amid increased scrutiny of MA insurers’ prior authorization practices. A report from the Department of Health and Human Services’ Office of Inspector General that analyzed 250 prior authorization denials and 250 payment denials from MA plans found the denials were sometimes for services that met Medicare coverage requirements.

For instance, 13% of prior authorization denials and 18% of payment declines were for services Medicare should cover.

 

The report comes as some lawmakers have criticized the MA program for driving up Medicare costs due to tactics to game risk adjustment scores and gain higher bonus payments.

EHealth’s report, however, showed that MA remains a very popular program with seniors. It found that 88% of respondents were satisfied with their coverage, and 63% were very satisfied.

One of the key benefits for the program is lower costs compared with Medigap plans as 67% of seniors said they chose MA because Medigap, which pays for supplement benefits not covered by traditional Medicare, was too expensive. Another 25% signed up with MA because Medigap did not offer drug coverage.

CMS Proposes Prior Authorization for Home Health Services

The Partnership for Quality Home Healthcare expressed deep concern about a proposal by the Centers for Medicare & Medicaid Services’ (CMS) that would require prior authorization of Medicare home health services. Under the proposal, CMS must approve physician ordered services before care can be initiated. The Partnership says that this would delay access to services, increase costs to Medicare and to taxpayers, and place burdensome requirements on providers. Other healthcare sectors that require prior authorization have documented care delays of up to 10 days.

Keith Myers, chairman of the Partnership said, “Home health patients are often at greatest risk during the transition from hospital to home. For care to be delayed by several days opens up the possibility for a host of adverse events ranging from missed medication, to new infections, to poor management of chronic conditions. We urge CMS to recognize the potential negative patient consequences that will result from a prior authorization requirement and we urge the agency to not proceed with a prior authorization demonstration program for home health.”

Home health leaders also warn that prior authorization would drive up costs to Medicare since patients would be more likely to be sent to more expensive in-patient facilities or experience a hospital readmission while waiting at home alone for their prescribed post-acute care. The proposed demonstration program would also increase the administrative burden on doctors and home health agencies who already provide extensive documentation on patient eligibility for home healthcare services. The proposal would not reduce fraud and abuse in the home health community, according to the Partnership. Bad actors will submit false records to satisfy the need for prior authorization, just as they do for CMS’ other documentation requirements.

In addition to these policy concerns, home health leaders stress that CMS does not have the legal authority to implement this prior authorization demonstration. The Partnership has offered several proposals to address fraud, including targeting aberrant billing and utilization, having sufficient checks on qualifications and background, and identifying geographic hot spots for fraud.

Last Updated 06/29/2022

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