A report from the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services revealed that Medicare Advantage Organizations (MAOs) sometimes delayed or denied Medicare Advantage beneficiary access to services, despite the requests meeting Medicare coverage rules.

In the report released April 28, federal officials reported that MAOs also denied payments to providers for some services that met both Medicare coverage rules and MAO billing rules. The report notes that such denials “may prevent or delay beneficiaries from receiving medically necessary care and can burden providers.”

To conduct the review, investigators selected a stratified random sample of 250 denials of prior authorization requests and 250 payment denials by 15 of the largest MAOs during the period of June 1 to 7, 2019. Based on reviews from healthcare coding experts and physician reviewers, investigators estimated the rates at which MAOs denied prior authorization and payment requests that met Medicare coverage rules and MAO billing rules.

Findings revealed that 13 percent of denied prior authorization requests met Medicare coverage rules, and 18 percent of denied payment requests met Medicare coverage rules and MAO billing rules.

One common reason for denial of prior authorization requests was that MAOs used clinical criteria not included in the Medicare coverage rules, leading them to deny requests for services that physician reviewers considered necessary. In addition, MAOs indicated that some prior authorization requests did not have sufficient documentation for approval, but reviewers found that beneficiary medical records in the case files were sufficient to support medical necessity. Most of the payment denials were caused by human error.

Based on these findings, the OIG recommends that the Centers for Medicare and Medicaid Services “issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews,” “update its audit protocols to address the issues identified” in the report, and “direct MAOs to take steps to identify and address vulnerabilities that can lead to manual review errors and system errors.”