Earlier this month, Wall Street Journal published an article about a federal investigation(i) update into Medicare Advantage insurers’ rejection rates for patients seeking nursing home stays.
The OIG review found that only 13% of prior authorization denials issued by Medicare Advantage organizations actually met federal Medicare coverage rules. Stays in post-acute facilities were highlighted as one of the most prominent service types improperly denied, meaning these vital nursing home and rehab stays likely would have been approved under traditional, government-run Medicare. (Medicare typically covers a nursing-home stay if patients need skilled care after a hospital admission of three days or more.)
The investigation noted that most people don’t appeal when the Medicare Advantage insurer denied their doctor’s request for access to a skilled nursing facility. There is likely a number of reasons why that is the case; people give up, arrange for alternative care, pay out of pocket or simply don’t realize a denial is the final word.
However, of the 18% of patients who did appeal, nearly all of them were able to overturn the initial denial.
Prior Authorization and Appeals
Medicare Advantage plans are when a private company, not the federal government, is managing and coordinating your Medicare Parts A and B benefits. Since these plans were introduced in 1999, and modified in 2003 to include drug coverage, the presumption has been these private companies can do a better job at improving health outcomes while saving the taxpayers money.
In doing so, the private insurance company managing your benefits has the right to request “prior authorization” of a service provided by a Medicare participating provider or facility. The insurance company must post a list of services that require prior authorization and make a decision within seven days. Beginning in 2027 the companies must publish the percentage of PA requests approved vs. denied as well as the average and median time it took to make the decision.
An individual enrolled in a Medicare Advantage plan, or the physician requesting the service, can appeal; the formal way to ask the company to change the coverage decision.
In Short..
Medicare Advantage plan insurance companies are under intense pressure from the federal government (and in some cases, corporate shareholders) to reduce cost while improving health outcomes. That means more scrutiny (another term for managed care) and prior authorization requirements. Physician groups now employ an army of people whose only job is to appeal the Medicare Advantage insurance company authorization denials. If individuals, too, join the appeal the reporting shows the denials can be overturned.
(i)Health and Human Services Office of Inspector General (OIG)