U.S. Department of Health and Human Services Office of Inspector General Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care Christi A. Grimm Inspector General April 2022, OEI-09-18-00260 U.S. Department U.S. Department of Health and Human of Health Services and Human Services Office of Inspector General Report in Brief April 2022,OEI-09-18-00260 April 2022, OEI-09-18-00260 Why OIG Did This Review Some Medicare Advantage Organization A central concern about the capitated payment model used in Denials of Prior Authorization Requests Medicare Advantage is the Raise Concerns About Beneficiary Access to potential incentive for Medicare Advantage Organizations (MAOs) Medically Necessary Care to deny beneficiary access to services and deny payments to What OIG Found Key Takeaway Our case file reviews determined providers in an attempt to increase profits. Although MAOs approve MAOs denied prior that MAOs sometimes delayed or the vast majority of requests for authorization and payment denied Medicare Advantage services and payment, they issue requests that met Medicare beneficiaries' access to services, millions of denials each year, and coverage rules by: even though the requests met CMS's annual audits of MAOs have • using MAO clinical criteria Medicare coverage rules. MAOs highlighted widespread and that are not contained in also denied payments to providers persistent problems related to Medicare coverage rules; for some services that met both inappropriate denials of services • requesting unnecessary Medicare coverage rules and MAO and payment. As enrollment in documentation; and billing rules. Denying requests that Medicare Advantage continues to meet Medicare coverage rules may • making manual review grow, MAOs play an increasingly prevent or delay beneficiaries from errors and system errors. critical role in ensuring that receiving medically necessary care Medicare beneficiaries have access and can burden providers. to medically necessary covered Although some of the denials that services and that providers are we reviewed were ultimately reversed by the MAOs, avoidable delays and reimbursed appropriately. extra steps create friction in the program and may create an administrative burden for beneficiaries, providers, and MAOs. Examples How OIG Did This Review of health care services involved in denials that met Medicare coverage We selected a stratified random rules included advanced imaging services (e.g., MRIs) and stays in post- sample of 250 denials of prior acute facilities (e.g., inpatient rehabilitation facilities). authorization requests and 250 payment denials issued by Prior authorization requests. We found that among the prior 15 of the largest MAOs during authorization requests that MAOs denied, 13 percent met Medicare June 1−7, 2019. Health care coding coverage rules-in other words, these services likely would have been experts reviewed case files for all approved for these beneficiaries under original Medicare (also known as cases, and physician reviewers Medicare fee-for-service). We identified two common causes of these examined medical records for denials. First, MAOs used clinical criteria that are not contained in a subset of cases. From these Medicare coverage rules (e.g., requiring an x-ray before approving more results, we estimated the rates at advanced imaging), which led them to deny requests for services that our which MAOs denied prior physician reviewers determined were medically necessary. Although our authorization and payment review determined that the requests in these cases did meet Medicare requests that met Medicare coverage rules, CMS guidance is not sufficiently detailed to determine coverage rules and MAO billing whether MAOs may deny authorization based on internal MAO clinical rules. We also examined the criteria that go beyond Medicare coverage rules. reasons for these denials and the types of services associated with these denials in our sample. Second, MAOs indicated that some prior authorization requests did not have enough documentation to support approval, yet our reviewers found that the beneficiary medical records already in the case file were sufficient to support the medical necessity of the services. Payment requests. We found that among the payment requests that MAOs denied, 18 percent met Medicare coverage rules and MAO billing rules. Most of these payment denials in our sample were caused by human error during manual claims-processing reviews (e.g., overlooking a document) and system processing errors (e.g., the MAO's system was not programmed or updated correctly). We also found that MAOs reversed some of the denied prior authorization and payment requests that met Medicare coverage rules and MAO billing rules. Often the reversals occurred when a beneficiary or provider appealed or disputed the denial, and in some cases MAOs identified their own errors. What OIG Recommends Our findings about the circumstances under which MAOs denied requests that met Medicare coverage rules and MAO billing rules provide an opportunity for improvement to ensure that Medicare Advantage beneficiaries have timely access to all necessary health care services, and that providers are paid appropriately. Therefore, we recommend that CMS: (1) issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews; (2) update its audit protocols to address the issues identified in this report, such as MAO use of clinical criteria and/or examining particular service types; and (3) direct MAOs to take steps to identify and address vulnerabilities that can lead to manual review errors and system errors. CMS concurred with all three recommendations. TABLE OF CONTENTS BACKGROUND 1 Methodology 5 FINDINGS 9 Thirteen percent of prior authorization denials were for service requests that met Medicare 9 coverage rules, likely preventing or delaying medically necessary care for Medicare Advantage beneficiaries Eighteen percent of payment denials were for claims that met Medicare coverage rules and 12 MAO billing rules, which delayed or prevented payments for services that providers had already delivered Imaging services, stays in post-acute facilities, and injections were three prominent service 14 types among the denials that met Medicare coverage rules MAOs reversed some initial prior authorization denials and payment denials for requests that 18 met Medicare coverage rules and MAO billing rules CONCLUSION AND RECOMMENDATIONS FOR CMS 20 Issue new guidance on the appropriate use of MAO clinical criteria in medical necessity 20 reviews Update its audit protocols to address the issues identified in this report, such as MAO use of 21 clinical criteria, and/or examine particular service types Direct MAOs to take additional steps to identify and address vulnerabilities that can lead to 21 manual review errors and system errors AGENCY COMMENTS AND OIG RESPONSE 23 DETAILED METHODOLOGY 24 APPENDICES 31 A. Point Estimates and Confidence Intervals for Denials of Prior Authorization and Payment 31 Requests That Met Medicare Coverage Rules, Issued by 15 Selected MAOs During June 1–7, 2019 B. Detailed Descriptions of Denials for Requests That Met Medicare Coverage Rules 32 C. Characteristics of Sampled MAOs 52 D. Agency Comments 53 ACKNOWLEDGMENTS AND CONTACT 56 ABOUT THE OFFICE OF INSPECTOR GENERAL 57 BACKGROUND Objectives 1. To determine the extent to which selected Medicare Advantage Organizations (MAOs) denied prior authorization requests for services that met Medicare coverage rules, and to examine why these denials occurred. 2. To determine the extent to which the selected MAOs denied payment requests that met Medicare coverage rules and MAO billing rules, and to examine why these denials occurred. 3. To describe the types of health care services involved in denials of services and payments that met Medicare coverage rules and MAO billing rules. Enrollment in Medicare Advantage (also known as Medicare Part C) has continued to increase over the last decade (see Exhibit 1). Of all Medicare beneficiaries in 2021, 42 percent (26.4 million) were enrolled in a Medicare Advantage plan. The Congressional Budget Office projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to about 51 percent by 2030. 1 Exhibit 1: Total Medicare Advantage enrollment has more than doubled since 2011; Medicare Advantage covered 26.4 million beneficiaries in 2021. Source: Kaiser Family Foundation, Medicare Advantage in 2021: Enrollment Update and Key Trends, June 2021. 1 Kaiser Family Foundation, Medicare Advantage in 2021: Enrollment Update and Key Trends, June 2021. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Background | 1 The Medicare program covers a wide range of health care services when they are medically necessary for beneficiaries. Medicare Advantage is designed to cover the same services as original Medicare (also known as fee-for-service Medicare), but in Medicare Advantage, MAOs 2 are also responsible for the coordination of care for beneficiaries enrolled in their plans. 3, 4 The goal of coordinated care is to provide efficient, high-quality care that improves patient health outcomes while also managing program costs. To manage care for beneficiaries and to help control costs, MAOs may impose additional requirements, such as requiring that beneficiaries use only in-network providers for certain health care services; requiring prior authorization before certain services can be provided; or requiring referrals for specialty care services. Although MAOs approve the vast majority of prior authorization requests and provider payment requests, MAOs also deny millions of requests each year. A central concern about capitated payment models-including the model used in Medicare Advantage-is the potential incentive for insurers to deny access to services and payment in an attempt to increase profits. 5 The Centers for Medicare & Medicaid Services' (CMS's) annual audits of MAOs have highlighted widespread and persistent problems related to inappropriate denials of services and payment. 6 This report focuses on the subset of prior authorization requests and provider payment requests that MAOs denied. We examined these denied requests to assess the extent to which the denied requests met Medicare coverage rules, and thus would likely have been approved in original Medicare. Medicare Coverage Rules MAOs must follow Medicare coverage rules, which specify what items and services are covered and under what circumstances. Because MAOs must provide beneficiaries with all basic benefits covered under original Medicare, they may not impose limitations-such as waiting periods or exclusions from coverage due to pre-existing conditions-that are not present in original Medicare. 7 Medicare coverage rules are outlined in national coverage determinations (NCDs); local coverage determinations (LCDs) in the geographic area in which the MAO operates; the Medicare Benefit Policy Manual; the Medicare Managed Care Manual; legislative changes in benefits applied 2 For the purposes of this report, we use "MAO" to mean a parent company that operates one or more Medicare Advantage contracts. 3 Ata minimum, MAOs must cover the same services as in original Medicare, although they may also offer supplemental benefits. 42 CFR §§ 422.101(a) and (b); 422.102. MAOs are not responsible for paying hospice care costs for beneficiaries; these costs are paid by original Medicare. 4 CMS, Medicare Managed Care Manual, ch. 5, sec. 10. 5In capitated payment models, insurance companies or providers receive a fixed amount of money per patient regardless of the number of services provided to the patient. 6OIG, Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials, September 2018. 7 CMS, Medicare Managed Care Manual, ch. 4, sec. 10.2. p. 7. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Background | 2 through notice-and-comment rulemaking, and other coverage guidelines and instructions issued by CMS. 8 Coverage rules can include administrative requirements (e.g., requiring that a specific form be completed) and clinical requirements (e.g., outlining the types of cancer for which Medicare will cover chemotherapy). 9 MAO Clinical Criteria and Billing Rules Although MAOs must follow Medicare coverage rules, they are also permitted to use additional clinical criteria that were not developed by Medicare when they are determining whether to authorize or pay for a service, as long as such criteria are "no more restrictive than original Medicare's national and local coverage policies." 10 For example, MAOs may develop and use their own internal clinical criteria or use commercially available clinical guidelines developed by private health care management companies. (This report uses the term "MAO clinical criteria" to refer to any clinical criteria that MAOs adopt.) MAO clinical criteria are typically more detailed than Medicare coverage rules and are intended to assist with clinical decision making. MAOs must provide beneficiaries with an annual Evidence of Coverage document that gives an overview of coverage requirements and beneficiary cost-sharing. 11 MAOs may create their own billing and payment procedures as long as all providers are paid accurately, timely, and with an audit trail. 12 Providers must follow MAO billing rules, such as those outlined in provider contracts (e.g., payment requests must be filed within specific timeframes). MAOs may also require that providers adhere to Medicare billing rules, such as the Medicare Claims Processing Manual. MAO Coverage Determination Process MAOs must establish procedures for making decisions-also called coverage determinations-about whether to approve or deny requests. 13 MAOs issue coverage determinations for two types of requests: (1) "prior authorization requests," which are requests for the MAO to preapprove a service or item before the beneficiary receives 8 CMS, Medicare Managed Care Manual, ch. 4, secs. 90.2 and 90.3. National Coverage Determinations are Department of Health and Human Services determinations on whether a particular item or service is covered under Medicare. Local coverage determinations are written coverage decisions of local Medicare Administrative Contractors with jurisdiction for claims in a particular geographic area. MAOs are responsible for monitoring CMS's national coverage determinations and publications to ensure that they are complying with all Medicare coverage rules. 9 If Medicare coverage rules do not exist for a specific service, then MAOs must determine whether the requested service is "reasonable and necessary" for the beneficiary and may use the coverage policies of other MAOs in their service area or other authoritative evidence such as peer-reviewed clinical studies. Social Security Act § 1862(a)(1)(A). CMS, Medicare Managed Care Manual, ch. 4, sec. 90.5. 10 CMS, Medicare Managed Care Manual, ch. 4, sec. 10.16. 11 42 CFR § 422.111. 12 CMS, Medicare Managed Care Manual, ch. 4, sec. 10.2. 1342 CFR § 422.566; CMS, Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance, sec. 10.4.4. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Background | 3 it; and (2) payment requests from a provider for a service already delivered to the beneficiary. CMS requires that MAOs have a medical director who is responsible for ensuring the clinical accuracy of all coverage determinations involving an assessment of medical necessity. 14 Prior authorization requests. MAOs can require that providers receive authorization for certain services before the MAO will provide coverage and payment. 15 Prior authorization is a utilization management tool that MAOs can use to control costs and ensure the most cost-effective, clinically appropriate treatment is offered to beneficiaries. Prior authorization requests are reviewed by MAO clinical staff to determine whether items and services are medically necessary and reasonable for the beneficiary, and whether they meet Medicare and MAO coverage rules. For context, in 2018, MAOs denied 1.5 million prior authorization requests overall (5 percent of all prior authorization requests) in the Medicare Advantage program. 16, 17 Payment requests. Providers who are paid on a fee-for-service basis by the MAO submit payment requests to receive reimbursement for services that the providers have already delivered to beneficiaries. As with the MAO's decision on a prior authorization request, the MAO's decision to approve or deny the payment request must be consistent with applicable rules for Medicare coverage and MAO billing. For context, in 2018, MAOs denied 56.2 million payment requests overall (9.5 percent of all payment requests) in the Medicare Advantage program. 18 Appeals. When an MAO denies a prior authorization request, the beneficiary may elect not to receive the service; the beneficiary may elect to receive the service and pay for it out of pocket; or the beneficiary or the beneficiary's representative can file an appeal of the denial with the MAO. 19 Similarly, when MAOs deny payment requests, providers can dispute or appeal the denial. Providers who enter into a contract with an MAO (i.e., in-network providers) can file a payment dispute, which is processed and resolved according to the provisions in the MAO's provider manual or other document that delineates the MAO-specific dispute process. Providers who do not have a contract with an MAO can file an appeal of the denial. 14 42 CFR § 422.562; CMS, Medicare Managed Care Manual, ch. 4, sec. 10.16. 15 CMS, Medicare Managed Care Manual, Chapter, ch. 4, sec. 110.1.1. 16CMS, 2018 Part C Reporting Requirements Data, accessed on June 3, 2021. In 2019, CMS changed MAO data reporting requirements to exclude the reporting of payment requests from contracted providers. Because our analysis includes payment requests from contracted providers, we analyzed CMS's data from 2018 to give context on overall MAO denial rates. 17 In 2018, MAOs overturned 86,193 prior authorization denials following an appeal. 18CMS, 2018 Part C Reporting Requirements Data, accessed on June 3, 2021. In 2018, MAOs overturned 258,524 payment denials following an appeal. 19CMS, Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance (cms.gov), p. 15. Individuals who represent beneficiaries may either be appointed or authorized to act on behalf of the beneficiary in dealing with any of the levels of the appeals process. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Background | 4 CMS oversight CMS uses several tools to oversee the performance of MAOs and ensure that beneficiaries have access to necessary care. CMS assigns an account manager and lead caseworker for each MAO contract. Account managers monitor complaints from beneficiaries and work with MAOs to promote compliance with Medicare program requirements. Each year, CMS audits a sample of MAOs to measure an MAO's compliance with the terms of its contract with CMS. During the audits, CMS evaluates MAO compliance with requirements associated with beneficiaries' access to covered Medicare services, access to drugs, and other beneficiary protections required by Medicare. 20 CMS requires MAOs to implement corrective action plans to address any audit violations and to demonstrate that they have substantially corrected deficiencies before the audit is officially closed. CMS may impose civil money penalties and sanctions for serious violations identified through audits. Prior OIG work on denials in Medicare Advantage In a September 2018 report, we found that when beneficiaries and providers appealed denied requests in Medicare Advantage during 2014−2016, MAOs overturned about 75 percent of their own prior authorization denials and payment denials. 21 We also found that CMS cited more than half of audited MAO contracts in 2015 for inappropriately denying prior authorization and payment requests. We recommended that CMS address persistent problems related to denials identified in its audits. CMS responded that it had increased the penalties for MAO violations that prevent beneficiaries from accessing medically necessary services. We also recommended that CMS enhance its oversight of MAO appeals data and provide beneficiaries with clear, easily accessible information about serious violations by MAOs. As of March 2022, CMS had not yet implemented these recommendations. Methodology Scope Using a random sample of denials from the 1-week period of June 1−7, 2019, this report estimates the rate at which 15 of the largest MAOs denied prior authorization and payment requests that met Medicare coverage rules. It also describes the causes 20 CMS audits MAO compliance in several program areas, including Medicare Advantage (Part C) coverage determinations, appeals, and grievances. CMS's annual audit enforcement reports are available at https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and- Audits/ProgramAudits.html. During the audits, CMS reviews a sample of MAO denials to determine whether they were appropriate, but CMS does not calculate a rate of inappropriate denials. 21OIG, Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials, September 2018. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Background | 5 and other issues associated with these denials; prominent service types among these cases; and (when available) MAO-reported actual or estimated costs. Sample Selection We selected 15 of the largest MAOs by enrollment as the study population. These MAOs accounted for nearly 80 percent of beneficiaries enrolled in Medicare Advantage as of June 2019, ranging in size from about 165,000 to nearly 6 million beneficiaries. To compile a sampling frame, we collected a list of all prior authorization denials and payment denials that each selected MAO issued during a 1-week period, June 1−7, 2019. We stratified the sample frame of nearly 283,000 total denials by type of request (prior authorization or payment) and MAO enrollment size. We then selected a stratified random sample of 500 denial cases, consisting of 250 prior authorization denials and 250 payment denials. During our review, we identified 70 sampled cases that were ineligible for this study (e.g., denials of requests for supplemental benefits that are not covered in original Medicare) and excluded them from our analysis. This resulted in a final sample of 430 cases. See Detailed Methodology on page 24 for further information. Case File Collection and Preliminary Screening To conduct the case file reviews, we contracted with health care coding and billing professionals with expertise in Medicare coverage rules and with physicians. (In this report, we refer to the first group as "health care coding experts.") Initially, the health care coding experts checked whether a case was eligible for our sample. Then they reviewed the case files of the 430 eligible cases for completeness and made additional requests to the MAOs for missing records or information needed for case file reviews. Case File Reviews To design the case file review methodology, we consulted with the following: CMS; the Medicare Advantage Independent Review Entity contractor (which reviews appeals that were upheld by MAOs); physicians; and health care coding experts. We also reviewed CMS policy documents such as the Medicare Managed Care Manual. The objective of the case file reviews was to determine whether the denied prior authorization and payment requests met relevant Medicare coverage rules and, if applicable, MAO billing rules. For our sample of 430 eligible cases, we conducted reviews for administrative coverage only for 268 cases, and for the remaining 162 cases we conducted reviews for both administrative coverage and medical necessity. Reviewers followed a structured protocol that OIG developed in consultation with health care coding experts and physicians. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Background | 6 Administrative coverage reviews: Our health care coding experts determined whether the prior authorization or payment requests met the Medicare coverage rules and/or MAO billing rules that the MAO cited as support for its denial decision. For example, MAOs often cited NCDs and LCDs; the Medicare Managed Care Manual; the beneficiary's Evidence of Coverage Document; and other MAO billing rules. Medical necessity reviews: If our health care coding experts assessed that denial cases needed a medical necessity review to determine whether the request met Medicare coverage rules, then the cases received an additional clinical review by a physician. Following a structured OIG protocol, physicians used their clinical judgment to determine whether the denied service was medically necessary for the beneficiary using the medical records and other clinical information available in the case file. For any case for which the physician reviewer determined that the service was medically necessary, or for which the physician reviewer wanted to consult with other physicians, we convened "consensus calls" among a panel of three physicians to discuss the case. The three-physician panel then reached consensus regarding whether a denied service was medically necessary for the beneficiary, based on clinical information in the medical records that the MAO had submitted to OIG. A health care coding expert then reviewed these cases to determine whether the case met administrative rules for Medicare coverage. Analysis We analyzed the results of the reviews by health care coding experts and the clinical reviews by physicians, and we generated population estimates of the rates of prior authorization denials and payment denials for requests that met Medicare coverage rules and MAO billing rules. We also generated population estimates for the rates at which prior authorization denials and payment denials were issued for services that met Medicare coverage rules and MAO billing rules, but were then reversed by the MAOs. See Appendix A on page 31 for point estimates, 95-percent confidence intervals, and key statistics. Limitations The results of the case reviews were limited to the documentation available in the medical records submitted by the MAOs at the time of our review. Although we followed up with MAOs to help ensure that they submitted all relevant records, we were not able to verify whether additional information might have existed but was not submitted. Further, the case review results were subject to the interpretations and clinical judgments of the health care coding experts and physician reviewers. Because a significant number of cases in the sample did not have cost data in their records, we were not able to estimate the costs associated with denials, such as added charges to Medicare beneficiaries or unpaid reimbursements to providers. When this information was available, we indicated the cost associated with denials in our sample that we determined met Medicare coverage rules and MAO billing rules. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Background | 7 Standards We conducted this study in accordance with the Quality Standards for Inspection and Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Background | 8 FINDINGS Thirteen percent of prior authorization denials were for service requests that met Medicare coverage rules, likely preventing or delaying medically necessary care for Medicare Advantage beneficiaries Of the 12,273 denials of requests for services (prior authorization denials) issued by the 15 selected MAOs during the first week of June 2019, an estimated 13 percent met Medicare coverage rules. 22 In other words, these services likely would have been approved for these beneficiaries under original Medicare (also known as Medicare fee-for-service). This projects to 1,631 prior authorization denials for requests that met Medicare coverage rules for the selected MAOs during that week. For an annual context, if these MAOs denied the same number of prior authorization requests (1,631) in each of the other 51 weeks of 2019, they would have denied 84,812 beneficiary requests for services that met Medicare coverage rules that year. MAO denials of prior authorization requests for services that meet Medicare coverage rules can create significant negative effects for Medicare Advantage beneficiaries. These denials can delay or prevent beneficiary access to medically necessary care; lead beneficiaries to pay out of pocket for services that are covered by Medicare; or create an administrative burden for beneficiaries or their providers who choose to appeal the denial. These denials may be particularly harmful for beneficiaries who cannot afford to pay for services directly and for critically ill beneficiaries who may suffer negative health consequences from delayed or denied care. MAOs denied prior authorization requests for services that were medically necessary by applying MAO clinical criteria that are not contained in Medicare coverage rules For many of the denials of prior authorization requests in our sample for services that met Medicare coverage rules, MAOs denied the requests by applying MAO clinical criteria that are not required by Medicare. As shown in the examples below, we found that in these cases MAOs used specific, mandatory requirements that resulted in the denial of prior authorization requests for medically necessary services. In contrast, original Medicare does not impose such specific requirements for covering the procedures involved. (For more detailed descriptions of all prior authorization and 22 As stated on page 4 of this report, in 2018, MAOs denied 5 percent of all prior authorization requests in the Medicare Advantage program. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 9 payment cases that met Medicare coverage rules and MAO billing rules, see Appendix B on page 32.) Case D472: MAO restricted followup MRIs based on the size of the beneficiary's lesion, a restriction that is not included in Medicare coverage rules. Eight months after a beneficiary was discovered to have an adrenal lesion of 1.5 cm in size, an MAO denied a request for a followup MRI (estimated cost $300). The MAO stated that the beneficiary would need to wait at least 1 year for the followup MRI because the size of the lesion (less than 2 cm) was too small to warrant followup before 1 year. However, our health care coding experts determined that the applicable NCD does not restrict the timing of followup MRIs based on the size of lesions. Furthermore, our physician panel stated that the documentation in the original request demonstrated that the MRI was medically necessary to determine whether the lesion seen on an earlier CT scan was malignant. (The MAO reversed its original denial upon appeal. See case D472 in Appendix B for additional details.) Case D460: MAO applied an ambulatory device limit that is not included in Medicare coverage rules. An MAO denied a request for a walker (estimated cost $112) for a 76-year-old beneficiary with post-polio syndrome. The MAO stated that, per its clinical criteria, the beneficiary was not eligible to receive a walker because the beneficiary had already received a cane within the past 5 years. The MAO's clinical criteria considered these devices to be the "same or similar" and limited beneficiaries to one such device every 5 years. However, our health care coding expert determined that the applicable LCD for walkers does not include a 5-year restriction on more than one ambulatory device. Further, our physician panel determined that the walker was medically necessary given the beneficiary's history, risk of falling, and physical therapy notes. These factors indicated that the beneficiary could not walk safely with only a cane. (See case D460 in Appendix B for additional details.) CMS officials reported that MAOs may use internal clinical criteria that do not contradict Medicare coverage rules; however, existing guidance is not sufficiently detailed for OIG to determine whether CMS would consider each of these denials in our sample to be inappropriate In several cases, we were unable to determine whether the prior authorization denials that met Medicare coverage rules would be considered allowable by CMS because CMS's guidance regarding MAO use of internal clinical criteria is not sufficiently detailed. The following example helps to illustrate the problem: An MAO denied a prior authorization request for a CT scan (case D479) that our physician reviewers determined was medically necessary. The MAO stated that its clinical criteria required the beneficiary to have an x-ray first to prove that a more advanced imaging procedure (a CT scan) was needed. However, the Medicare NCD for CT scans states: Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 10 "[T]here is no general rule that requires other diagnostic tests to be tried before CT scanning is used." This suggests that-all other things being equal-Medicare would have paid for the CT scan for this beneficiary if the beneficiary were enrolled in original Medicare, whereas the service was denied for the beneficiary in Medicare Advantage. The section of the Medicare Managed Care Manual governing this issue states that MAO internal policies for medical necessity determinations must use "coverage criteria no more restrictive than original Medicare's national and local coverage policies." 23 In the example above, because the Medicare coverage rule does not require a beneficiary to have an x-ray prior to a CT scan, and because the NCD states specifically that there is no such requirement in original Medicare, one could conclude that the MAO used criteria that were "more restrictive" than original Medicare. CMS officials reported to OIG that MAOs may establish additional clinical criteria for Medicare-covered services, as long as the criteria are evidence-based and do not "contradict" the applicable Medicare coverage rules. Therefore, in the example above, the denial of prior authorization for the CT scan could be considered allowable if CMS judged that the MAO's x-ray requirement was evidence-based and did not contradict the Medicare NCD for CT scans. Given the current language in the Medicare Managed Care Manual, and because CMS has not issued guidance on what types of clinical criteria would be considered "more restrictive than" or "contradictory to" Medicare coverage rules, OIG was unable to determine whether certain denials of Medicare-covered services would be considered allowable by CMS. MAOs denied prior authorization requests for medically necessary services when providers did not respond to requests for unnecessary documentation In some prior authorization cases in our sample that met Medicare coverage rules, MAOs contacted providers to request unnecessary documentation (e.g., additional test results) before making their decision, and then denied the request when providers did not supply the additional documentation. In some of these cases, the MAO reviewer requested additional documents to further support that the requested service was medically necessary; however, our physicians determined that the clinical information in the case file was already sufficient to demonstrate medical necessity. In other cases, the MAO reviewer asked for copies of documentation already contained in the case file. Case D199: MAO requested documentation that was already on file. An MAO denied a request for Botox medication for a beneficiary with a diagnosis of urge incontinence (estimated cost $3,674). The MAO incorrectly stated that there was 23 CMS, Medicare Managed Care Manual, ch. 4, sec. 10.16. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 11 a lack of clinical information about the beneficiary's previous use of the medication and asked for additional records. However, the MAO had already received records documenting the beneficiary's previous use of Botox as part of the prior authorization request, making the request for the documentation unnecessary. (The MAO noted that it reversed the denial after receiving OIG's data request. See case D199 in Appendix B for additional details.) Eighteen percent of payment denials were for claims that met Medicare coverage rules and MAO billing rules, which delayed or prevented payments for services that providers had already delivered Of the 160,378 payment denials issued by the 15 selected MAOs during the first week of June 2019, an estimated 18 percent met Medicare coverage rules and MAO billing rules and should have been approved by the MAOs. 24 This projects to 28,949 payment denials that met Medicare coverage rules and MAO billing rules for the selected MAOs during that week. For an annual context, if these MAOs denied the same number of payment requests (28,949) in each of the other 51 weeks of 2019, they would have denied 1.5 million payment requests that met Medicare coverage rules and MAO billing rules that year. Denying payment requests that meet these rules delays or prevents providers from receiving payment for services that they have already delivered to beneficiaries, which can burden providers. MAOs denied payments to providers because of human error during manual reviews MAOs rely on their staff to manually review some requests for payments before approving or denying them. However, these manual reviews are susceptible to human error, such as a reviewer's overlooking a document in the case file or inaccurately interpreting CMS or MAO coverage rules. These errors can result in denied payments to providers for services that meet Medicare coverage rules and MAO billing rules. As stated on page 4 of this report, in 2018, MAOs denied 9.5 percent of all payment requests in the 24 Medicare Advantage program. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 12 Case D187: MAO reviewer was unfamiliar with network facility coverage rules. An MAO reviewer denied a payment request for care at a skilled nursing facility because it was delivered by a provider who was not contracted with the MAO (estimated cost $50). In most cases, a beneficiary needs prior authorization to receive care from a noncontracted provider. However, the skilled nursing facility was an in-network facility. This qualified the claim as "plan-directed care," and therefore no prior authorization was required. The MAO attributed the denial to human error. (The MAO noted that it reversed the denial after receiving OIG's data request. See case D187 in Appendix B for additional details.) Case D442: MAO reviewer did not account for documentation already on file. An MAO denied payment for radiation treatment for an elderly cancer patient with a tumor on the pancreas ($336). The MAO incorrectly claimed that no prior authorization had been submitted for the service. However, the provider subsequently submitted a screenshot demonstrating that the MAO had granted a prior authorization for the billed claim. The MAO attributed this denial to human error and reversed the denial, noting that the MAO's reviewer did not see the prior authorization in the file. (See case D442 in Appendix B for additional details.) MAOs denied payment requests because of inaccurate programming of claims processing systems When MAO systems for claims processing are programmed incorrectly, or are not updated timely, they can result in denials for payments that should be approved. Unlike errors generated on a case-by-case basis during a manual review, system errors can cause greater harm because they automatically generate a potentially larger volume of incorrect denials until the MAO notices the error and fixes it. Case D444: MAO's system failed to correctly route claims for manual review. One MAO's established procedure was to manually review payment requests from providers with multiple taxpayer identification numbers (TINs) so that the correct TIN could be chosen. However, the system was programmed incorrectly and did not automatically route these cases for manual review. In this case, an in-network provider submitted a claim for physical therapy services, but the MAO's system chose an incorrect TIN, making the provider appear to be out-of-network. The MAO discovered the error after receiving OIG's data request and paid the claim ($108). The MAO reported to OIG that the same error may have affected 163 additional provider payment requests and that it was working to implement an automated process to prevent a reoccurrence. (See case D444 in Appendix B for additional details.) Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 13 Case D441: MAO's system did not recognize the authorized timeframe for a service. An MAO denied a request for radiation therapy ($668) for a 74-year-old beneficiary with prostate cancer, incorrectly stating that no prior authorization was on file for the date of service. The provider disputed the denial and submitted a screenshot demonstrating that prior authorization had previously been obtained. The MAO stated that its system had not correctly recognized the timeframe that had been authorized under the approved prior authorization request. The MAO reversed the denial and reported that it updated its system to correct the error. (See case D441 in Appendix B for additional details.) Imaging services, stays in post-acute facilities, and injections were three prominent service types among the denials that met Medicare coverage rules Among the denied requests for prior authorizations and payments that met Medicare coverage rules and MAO billing rules that we identified in our sample, there was a wide range of service types. Three of the most prominent service types were advanced imaging services (including MRIs and CT scans); post-acute care in skilled nursing facilities and inpatient rehabilitation facilities (i.e., care after hospital stays); and injections. 25 To reduce their costs, MAOs may have an incentive to deny more expensive services, such as inpatient rehabilitation facility stays, and/or require that beneficiaries receive less expensive alternatives. We also observed denials that met Medicare coverage rules and MAO billing rules for items or procedures that may receive extra scrutiny from MAOs because they can be vulnerable to fraud, such as durable medical equipment and injections for pain management. 26 MAOs denied requests for advanced diagnostic imaging that met Medicare coverage rules and MAO billing rules, often stating that a more basic imaging service must be performed first Imaging services were the most common health care service type among the denials that met Medicare coverage rules and MAO billing rules in our sample, and consisted mainly of advanced diagnostic imaging services, such as MRIs and CT scans. Medicare coverage rules state that MRIs and CT scans are covered when medically 25We also observed denials for physician services, durable medical equipment, surgery, inpatient hospital stays, ambulance transport, lab tests, therapy, radiation treatment, chiropractic services, and other tests. See Appendix B for more detail on the denial cases in our sample that met Medicare coverage rules. 26Durable medical equipment and injections for pain management have been the subject of many prosecutions for health care fraud. See, for example: Department of Justice, CEO Sentenced to Prison in $150 Million Health Care Fraud, Opioid Distribution, and Money Laundering Scheme. Accessed on March 21, 2022. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 14 necessary and appropriate for the beneficiary. 27 Medicare does not have a blanket requirement that beneficiaries receive specific tests or treatments prior to receiving an MRI or CT scan. 28 However, in several cases MAOs denied requests for advanced diagnostic imaging that our physician panel determined were medically necessary, and that health care coding experts determined met Medicare coverage rules, because the beneficiary had not first received a more basic imaging service or more conservative treatment. As discussed earlier in this report, MAOs often cited MAO clinical criteria not contained in Medicare coverage rules to justify these denials of imaging services. Case D221: MAO required an x-ray before it would approve an MRI. An MAO denied a request for an MRI (estimated cost $365) of the hand for a Medicare beneficiary who continued to have pain and weakness in the hand 5 months after a fall. The MAO cited its clinical criteria that required, among other things, that the beneficiary undergo an x-ray that then failed to provide a diagnosis before the MAO would authorize an MRI. However, our reviewers determined that the MRI was medically necessary and reasonable for the beneficiary and the applicable Medicare NCD does not have a requirement that a beneficiary receive an x- ray prior to an MRI. Further, our physician panel explained that an x-ray would not be sufficient for this patient because some hand injuries-such as those involving small bones, muscles, and ligaments in the hand-may not be visible with an x-ray. The physician panel also noted that delayed treatment could cause further harm for this beneficiary because the muscles and ligaments might retract. The MAO reversed the prior authorization denial upon appeal. (See case D221 in Appendix B for additional details.) Case D406: MAO required provider-directed treatment before it would approve an MRI. An MAO denied a request for an MRI (estimated cost $297) for a 91-year-old beneficiary with worsening chronic low back pain with sciatica (pain that radiates from the lower back through the hips and down the leg). The MAO's medical director denied the request because the beneficiary had not completed 6 weeks of provider-directed treatment within the preceding 3 months. However, our physician panel determined that the beneficiary needed the MRI because of the beneficiary's age, the diagnosis, and the results of a previous back x-ray. Further, the NCD for MRIs does not require that beneficiaries complete 6 weeks of provider-directed treatment before receiving an MRI. (See case D406 in Appendix B for additional details.) CMS, National Coverage Determination (NCD) for Computed Tomography (220.1), March 12, 2008. 27 CMS, National Coverage Determination (NCD) for Magnetic Resonance Imaging (220.2), April 10, 2018. 28 In individual cases, the use of an MRI or CT scan as the initial diagnostic test may not be reasonable and necessary because it is not supported by the beneficiary's symptoms (and it would then be appropriate to deny the request for the advanced imaging and suggest more conservative treatment first). Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 15 MAOs denied requests for transfers to post-acute care facilities that met Medicare coverage rules, claiming that beneficiaries' needs could be met at a lower, less costly level of care Among the denial cases that met Medicare coverage rules in our sample, several were prior authorization requests to discharge patients from the hospital to inpatient rehabilitation facilities or to skilled nursing facilities. In their justifications for these denials, MAOs often claimed that the patients did not need intensive therapy or skilled care, and that their needs could be met at a lower level of care, such as home health services at the patient's residence. However, our physician panel determined in these cases that the patients met the clinical criteria for admission to the relevant facilities, that they would have benefited from the higher level of care ordered by the requesting physician, and that the alternatives offered by the MAOs were not clinically sufficient to meet the patients' needs. Post-acute services provided in facilities for rehabilitation and skilled nursing care are significantly more expensive than home health services, which may lead to increased scrutiny from MAOs for these types of requests. (See Exhibit 2.) Exhibit 2: Costs for post-acute care can vary widely across different settings Inpatient rehabilitation facilities provide intensive therapy and medical services in a hospital environment to patients with complex nursing, medical management, and rehabilitative needs. Average payment per stay in 2018 under original Medicare: $20,124. Skilled nursing facilities provide skilled nursing or therapy services to patients for rehabilitation following inpatient hospital stays. Average payment per stay in 2018 under original Medicare: $11,592. Home health services include intermittent skilled nursing care, physical therapy, or speech-language pathology, and continuing occupational therapy services for patients who are unable to leave home or can leave home only with considerable effort. Average payment per stay in 2018 under original Medicare: $3,089. Sources: CMS, Inpatient Rehabilitation Therapy Services: Complying with Documentation Requirements, Medicare Coverage of Skilled Nursing Facility care, and Medicare Home Health Benefit Booklet. Information on costs from: Medicare Payment Advisory Commission, A Data Book: Health Care Spending and the Medicare Program, July 2020. Skilled nursing facility costs calculated using the number of Medicare skilled nursing facility stays and total Medicare skilled nursing facility payments. Case D260: MAO offered an insufficient alternative level of care. An MAO denied a request to transfer a beneficiary from the hospital to a skilled nursing facility, stating that a lower level of care (home health services) could meet Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 16 the beneficiary's medical needs. The beneficiary had pain and swelling from cellulitis (a bacterial skin infection) and bedsores. The patient was unable to carry out activities of daily living, could stand for only a few minutes at a time, and was no longer able to walk with the help of a rolling walker. Our physician panel determined that, considering the beneficiary's deteriorating functional status, comorbidities, and need for daily skilled care, the patient met Medicare coverage requirements for skilled nursing facility care outlined in the Medicare Benefit Policy Manual and would benefit from occupational and physical therapy. The MAO reversed this denial upon appeal. (See case D260 in Appendix B for additional details.) Case D278: MAO denied care that met patient's needs. An MAO denied a request for a referral to an inpatient rehabilitation facility for a beneficiary with a fractured femur who was recovering from screw placement surgery. The MAO stated that the beneficiary did not meet all medical necessity criteria for admission to an inpatient rehabilitation facility, and that the beneficiary's needs could be met in other, lower-level-of-care settings, such as a skilled nursing facility, home with home health services, or home with outpatient therapy. However, our physician panel determined that the beneficiary met the medical necessity criteria for an inpatient rehabilitation facility stay as outlined in the Medicare Benefit Policy Manual, including the need to be examined by a rehabilitation physician at least 3 days per week. The physician reviewer added that a lower level of care was not a clinically sufficient alternative because the beneficiary would not have access to physician supervision to facilitate recovery from pneumonia and other post-operative risks. (See case D278 in Appendix B for additional details.) MAOs denied requests for injections, in some cases by misapplying Medicare coverage rules A third prominent service type among the denials that met Medicare coverage rules in our sample was injections. Some of these injections were for pain management, which have been subject to improper billing and fraud in Medicare, and so may receive extra scrutiny from MAOs. However, in two of the pain-management injection cases in our sample, case reviews determined that MAO reviewers misapplied Medicare coverage rules (see examples below). Case D401: MAO misapplied Medicare coverage rules. An MAO denied a request for an injection to alleviate severe and worsening neck pain for a 72-year-old beneficiary. The request was for an injection in the cervical 1-2 joint between the first and second vertebrae at the top of the spine (estimated cost $238). The MAO stated that the LCD allowed for that type of injection only for lower areas of the spine. However, our physician panel determined that the injections were medically necessary given the beneficiary's chronic, continuous pain, and our health care coding expert determined that the LCD referenced by the MAO did not preclude Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 17 the use of injections in the cervical 1-2 joint. (See case D401 in Appendix B for additional details.) Case D475: MAO misstated Medicare coverage utilization limits. An MAO denied a request for facet joint injections in three sections of the spine (estimated cost $95), incorrectly stating that the number of injections requested exceeded the Medicare coverage limit of: (1) one to two injections per section of the spine per session, or (2) up to five injection sessions in a 12-month period. Our physician panel determined that the injections were medically necessary and reasonable because the beneficiary, who had degenerative osteoarthritis of the spine and a history of neck, low back, and hip pain, had reported significant relief from two prior injection sessions. Further, our health care coding expert determined that the LCD that the MAO cited does not include a limit on the number of injections per section of the spine per session, and that the requested session would not cause the beneficiary to exceed five sessions in a 12-month period. (See case D475 in Appendix B for additional details.) MAOs reversed some initial prior authorization denials and payment denials for requests that met Medicare coverage rules and MAO billing rules For 3 percent of prior authorization denial cases, and 6 percent of payment denial cases, MAOs initially denied requests that met Medicare coverage rules, and then reversed their decisions before our data request (within 3 months of the original denial). 29 Although reversed denials for prior authorization requests mean that beneficiaries ultimately were offered coverage for needed care, the process also can create a burden for beneficiaries who need to navigate the appeals process. Similarly, reversed denials for payment requests mean that providers were ultimately paid for the services that they delivered. However, each denial for a payment request that met Medicare coverage rules and MAO billing rules represents a case in which providers were delayed payment and/or had to dispute a denial that ideally would have been approved upon the first request. These avoidable delays and extra steps create friction in the program and may create an administrative burden for beneficiaries, providers, and MAOs. 29We requested case file documentation in September 2019, 3 months after MAOs issued the initial denials. In a small number of cases, MAOs discovered errors while preparing cases files for our data request and notified OIG that they reversed the denials. Because we do not know if these reversals would have occurred in the absence of our data request, we did not include them in our estimates. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 18 MAOs reversed some denials for prior authorization requests following beneficiary appeals For 3 percent of prior authorization denials, MAOs initially denied requests that met Medicare coverage rules, and later reversed these denials within 3 months and approved the requests. Most of these reversals occurred because beneficiaries or their providers filed appeals. Among the denials for prior authorization requests in our sample that met Medicare coverage rules and that were appealed, MAOs reversed all of the denials and authorized all of the requested services. Case D421: MAO delayed a CT scan by 5 weeks for a beneficiary with cancer. An MAO denied a request for a CT scan of the chest and pelvis for a beneficiary with endometrial cancer. The provider was able to get the denial reversed 5 weeks after the initial request by submitting additional information and filing an appeal. However, our physician panel determined that the original request had sufficient documentation to demonstrate that the CT was needed to assess the stage of the cancer and to determine the appropriate course of treatment. Delayed care can negatively affect beneficiary health, particularly for urgent conditions. Our physician reviewer noted the importance of timely monitoring the growth and extent of cancer to assess severity of the disease and determine the course of treatment. (See case D421 in Appendix B for additional details.) MAOs reversed some payment denials following provider disputes For 6 percent of payment denials, MAOs initially denied payment requests that met Medicare coverage rules and MAO billing rules, and later reversed these denials within 3 months and paid the claims. In some cases, providers presented evidence in their dispute that the MAO should have approved payment, such as screenshots that the MAO had previously approved a prior authorization for the service that had been provided. (See cases D073, D119, and D441 in Appendix B.) In other cases, the provider's dispute prompted the MAO to acknowledge system or manual errors that resulted in payment denials, such as incorrect configuration of provider coverage details. (See case D116 in Appendix B.) Case D489: MAO acknowledged that prior authorization was not required after the provider disputed the denial. An MAO denied payment for x-ray services for a patient with osteoarthritis, incorrectly stating that prior authorization was required for the x-rays. The provider disputed the denial and included screenshots of an email exchange with a plan representative who confirmed that prior authorization was not needed. On reviewing the dispute, the MAO acknowledged its error and reversed the denial, and then paid the claim ($102). (See case D489 in Appendix B for additional details.) Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Findings | 19 CONCLUSION AND RECOMMENDATIONS As Medicare Advantage enrollment continues to grow, MAOs play an increasingly critical role in ensuring that Medicare beneficiaries have access to medically necessary covered services and that providers are reimbursed appropriately. MAOs are expected both to ensure access to high-quality care and to implement critical program controls in order to avoid unnecessary costs and ensure program integrity. However, capitated payment models, such as Medicare Advantage, can create an incentive for MAOs to deny the prior authorization of services for beneficiaries, and payments to providers, including some services and payment that would not have been denied in original Medicare. Denied requests that meet Medicare coverage rules may prevent or delay beneficiaries from receiving medically necessary care and can burden providers. Even when denials are reversed, avoidable delays and extra steps create friction in the program and may create an administrative burden for beneficiaries, providers, and MAOs. Further, beneficiaries enrolled in Medicare Advantage may not be aware that there may be greater barriers to accessing certain types of health care services in Medicare Advantage than in original Medicare. Our findings about the circumstances under which MAOs denied requests that met Medicare coverage rules and MAO billing rules provide an opportunity for improvement to ensure that beneficiaries enrolled in Medicare Advantage have timely access to all necessary health care services, and that providers are paid appropriately. In some cases, the MAOs identified their own errors and reversed the denials, in others, MAOs reversed denials following appeals. This suggests that improvement efforts by MAOs could reduce the number of similar errors in the future. The causes of other cases of denied prior authorization and payments for services that met Medicare coverage rules and MAO billing rules warrant further action by CMS, including guidance to MAOs and CMS's oversight audits. Therefore, we recommend that CMS: Issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews To help ensure that Medicare Advantage enrollees receive all medically necessary and covered services, to help promote MAO compliance with Medicare coverage rules, and to help improve program transparency, CMS should issue new guidance on both the appropriate use and the inappropriate use of MAO clinical criteria that are not contained in Medicare coverage rules. The guidance should clarify what the Medicare Managed Care Manual means when it says that MAO clinical criteria must not be "more restrictive" than Medicare coverage rules, and it should include specific examples of criteria that would be considered allowable and unallowable. CMS Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Conclusion and Recommendations | 20 should also instruct MAOs to examine and revise their procedures for making coverage determinations, as needed, considering CMS's new guidance. Update its audit protocols to address the issues identified in this report, such as MAO use of clinical criteria, and/or examine particular service types CMS should update its audit protocols to look for issues identified in this report. Although CMS's audit protocols already direct auditors to review a sample of denial cases to determine whether the denials were issued appropriately, CMS should add additional prompts for auditors. For example, following the publication of the new guidance relating to the use of clinical criteria in medical necessity reviews, CMS could add questions for auditors in section 3.2 of its audit protocol (Clinical Appropriateness of Denials) to determine whether MAOs are following the new guidance. Similarly, CMS could add a question for auditors examining whether MAOs requested unnecessary documentation. If MAOs are found to be noncompliant because they are using more restrictive clinical criteria or requesting unnecessary documentation, CMS should follow its normal enforcement action process, including adding aggravating factors in civil money penalty calculations if MAO denials resulted in beneficiaries' not being able to access needed services. Further, CMS should consider additional enforcement actions for MAOs that demonstrate a pattern of inappropriate payment denials. CMS also should consider targeting in its audits specific service types that have a history of inappropriate denials, which could include the service types identified in this report. CMS could choose to focus on service types for which inappropriate denials may have a significant impact on beneficiary health and well-being, such as stays in post-acute facilities. Selecting a targeted sample may increase the likelihood of finding inappropriate denials. Direct MAOs to take additional steps to identify and address vulnerabilities that can lead to manual review errors and system errors Although some of the denials discussed in this report were attributable to one-off human errors, others seemed preventable through process or system changes by MAOs. CMS should direct MAOs to examine their processes for manual review and system programming and remediate vulnerabilities that may result in inappropriate denials. For example, CMS could point to this report, including the detailed explanations of the errors in Appendix B, to help MAOs identify the types of errors that they should be looking for. To help avoid system errors, CMS could direct MAOs to take additional steps to ensure that any changes affecting coverage or payment (especially those on an established schedule, such as renewal of a provider's contract Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Conclusion and Recommendations | 21 with the MAO), are properly coded in their systems. CMS could also direct MAOs to consider additional staff training on documentation that should be verified before issuing a denial, and the level of documentation required. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Conclusion and Recommendations | 22 AGENCY COMMENTS AND OIG RESPONSE In response to the draft report, CMS stated that it is committed to oversight and enforcement of the requirements of the Medicare Advantage program and concurred with all three recommendations. CMS reiterated that MAOs must follow Medicare coverage rules. CMS further stated that MAOs may implement additional coverage requirements to better define the need for a service as long as the additional requirements do not violate the requirements in the relevant NCD or LCD. However, as we note in our report, this statement is not clearly outlined in existing guidelines. CMS concurred with the first recommendation to issue new guidance on the appropriate use of MAO clinical criteria for medical necessity reviews, stating that it plans to issue such guidance. CMS concurred with the second recommendation to update its audit protocols to address the issues identified in this report, such as MAO use of clinical criteria and/or examining particular service types. CMS stated that it will update its audit protocol and auditor training materials, as needed, to align with the guidance that it plans to issue under the first recommendation. CMS did not indicate whether it would consider targeting in its audits specific service types that have a history of inappropriate denials. CMS concurred with the third recommendation to direct MAOs to take additional steps to identify and address vulnerabilities that can lead to manual review errors and system errors. CMS stated that it would direct MAOs to examine their manual review and system programming processes and to address vulnerabilities that may result in inappropriate denials. Although CMS stated that these efforts would be "in keeping with" the guidance that it plans to issue in response to the first recommendation, OIG notes that the manual review errors and system processing errors identified in this report were unrelated to reviews for medical necessity. For the full text of CMS's comments, see Appendix D. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Agency Comments and OIG Response | 23 DETAILED METHODOLOGY Sample selection MAO selection. To select the MAOs for this review, we used CMS Part C enrollment data to identify the number of beneficiaries in health maintenance organization (HMO) plans and preferred provider organization (PPO) plans administered by each MAO in June 2019. We selected 15 of the largest MAOs by enrollment. The 15 selected MAOs accounted for nearly 80 percent of beneficiaries enrolled in Medicare Advantage in June 2019, ranging in size from about 165,000 to nearly 6 million beneficiaries. Case selection. We collected a list of all prior authorization denials and payment denials that each selected MAO issued during a 1-week period, June 1−7, 2019 (282,830 total denials). We created a sampling frame from this list by grouping denials into 7 strata based on denial type (prior authorization or payment) and the number of denials issued by the MAO during that week. From this sampling frame, we selected a stratified random sample of 500 cases (250 prior authorization denials and 250 payment denials). We stratified by denial type in order to make projections of the rates of prior authorization denials and payment denials that were issued for requests that met Medicare coverage rules and MAO billing rules. We also stratified by MAO size. We under-sampled MAOs with larger numbers of denials to avoid over-burdening them with a high number of requests for case file documentation. See Exhibit 3 on page 26 for a description of each stratum, sample size, and population of denial cases. Excluding ineligible cases. We instructed MAOs to exclude certain denials, such as those for supplemental services and claims with third-party liability, from the lists of prior authorization denials and payment denials that they submitted. During the course of our review, we identified and excluded additional types of ineligible cases from our analysis. We identified 70 ineligible cases in our original sample of 500 cases, making our final sample 430 cases (183 payment and 247 prior authorization cases). Types of denials that were ineligible for this review included: • Services already paid for under another payment arrangement: In some cases, MAOs pay providers under a capitated arrangement. Providers may "bill" the MAO to document a service/encounter with the beneficiary, and these "bills" can create the appearance of a denial, but providers do not expect reimbursement for the specific services in addition to the capitated payment that they are already receiving. These cases were ineligible for this study Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Detailed Methodology | 24 because the MAO did not make a coverage decision based on the merits of the case, and there was no expectation of payment to the provider. • Cases denied because of a GY modifier: In some cases, providers may bill for a service that they know will not be covered (for example, to get a record of a Medicare denial before billing secondary insurance). They may attach a GY modifier to the HCPCS (Healthcare Common Procedure Coding System) code on the claim, which signals that the claim should not be paid. These cases were ineligible for this study because providers were not requesting payment. • Exact duplicates: In some cases, system or human errors may cause the same claim to be submitted from a provider to the MAO more than once. Cases that were denied as exact duplicates were ineligible for this study because they were not denials based on the merits of the case. • Services paid by Medicaid for beneficiaries dually eligible for Medicare and Medicaid: Some beneficiaries who are dually eligible for both Medicare and Medicaid are enrolled in special plans through which a single MAO administers both their Medicare and Medicaid benefits. Some of these MAO systems are set up to process requests for certain services as Medicare "denials" before they will approve and pay for them under the beneficiary's Medicaid benefit. These cases were ineligible for this study because they were not true denials based on the merits of the case, but rather a system processing step. • Supplemental services: MAOs are allowed to cover extra health and wellness services that are not normally covered under Medicare, such as gym memberships. These "supplemental" services are not covered by all MAOs. These cases were ineligible for this study because the services would not be covered by original Medicare, and the cases would have had different coverage rules depending on the MAO. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Detailed Methodology | 25 Exhibit 3: Total and Eligible Denial Sample Sizes and Populations, by Stratum Estimate of population of Total sample Population of Eligible eligible Stratum Case type MAOs size denials sample size denials Prior Two largest MAOs by 1 authorization volume of denials for 50 5,177 50 5,177 prior authorization Four medium-sized Prior MAOs by volume of 2 80 4,761 77 4,582 authorization denials for prior authorization Nine smallest MAOs by Prior 3 volume of denials for 120 2,514 120 2,514 authorization prior authorization Total prior authorization cases 250 12,452 247 12,273 Largest MAO by 4 Payment volume for payment 70 150,405 31 66,608 denials Six medium-sized 5 Payment MAOs by volume for 85 100,402 64 75,597 payment denials Three small MAOs by 6 Payment volume for payment 45 12,570 42 11,732 denials Remaining five MAOs with the smallest 7 Payment 50 7,001 46 6,441 volume for payment denials Total payment cases 250 270,378 183 160,378 Total cases 500 282,830 430 172,651 Case File Collection and Preliminary Screening For the original 500 sampled cases, we collected case file documentation in September 2019 (3 months after the denials were originally issued). We requested complete administrative and medical records from the MAOs. Among other information, we requested that the MAOs provide a summary of the basic facts of the case, an explanation of their reason for denying the request, any coverage rules that MAOs cited to deny the request, records of the MAO decision-making process, copies of notices sent to the beneficiary and/or provider, any medical records on file, and whether the denial had been appealed. To conduct the case file reviews, we contracted with health care coding and billing professionals with expertise in Medicare coverage rules ("health care coding experts") Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Detailed Methodology | 26 and with physicians. Health care coding experts used an OIG-developed protocol to complete a preliminary screening for all 500 cases in our sample. The first step of the preliminary screening process was to determine whether the denial case was eligible for our sample (as described above). The health care coding experts then reviewed the case files of the 430 eligible cases for completeness and made additional requests to the MAOs for missing records or information needed for case file reviews. Case File Reviews To design the case file review methodology, we consulted with the following: CMS; the Medicare Advantage Independent Review Entity contractor (which reviews denial appeals that are upheld by MAOs); physicians; and health care coding experts. We also reviewed CMS policy documents such as the Medicare Managed Care Manual. The objective of the case file reviews was to determine whether the denied prior authorization and payment requests met relevant Medicare coverage rules and, if applicable, MAO billing rules. For our sample of 430 eligible cases, we conducted reviews for administrative coverage only for 268 cases, and for the remaining 162 cases we conducted reviews for both administrative coverage and medical necessity. Reviewers followed a structured protocol that OIG developed in consultation with health care coding experts and physicians. Administrative coverage reviews. For denial cases that did not need a clinical review to determine medical necessity, a health care coding expert followed a structured OIG protocol to determine whether the denial met the Medicare coverage rules and/or MAO billing rules that the MAO cited as support for its denial decision. Examples of cases that did not need a medical necessity determination included denials that were issued because the beneficiary was no longer enrolled with the MAO; claims that were filed past required deadlines; claims for services that require prior authorization but for which the MAO did not have an authorization on file; and other administrative or billing inaccuracies. Health care coding experts reviewed the MAO's justification for issuing the denial and determined whether the request met applicable Medicare coverage rules and MAO billing rules, such as NCDs and LCDs; the Medicare Managed Care Manual; and the provider's contract. They also examined MAO coverage documents (i.e., the Evidence of Coverage document for the beneficiary's plan), and any other documentation in the case file that supported or disputed whether the request met Medicare coverage rules and MAO billing rules. Medical necessity reviews. If the health care coding experts assessed that denial cases needed a medical necessity review to determine whether the request met Medicare coverage rules, then the cases received an additional clinical review by a physician. We assigned a physician reviewer to each of these cases on the basis of the service type and the physician's specialty. Following a structured OIG protocol, physicians used their clinical judgment to determine whether the denied service was medically necessary for the beneficiary using the medical records and other clinical information available in the case file. Physicians considered factors such as a Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Detailed Methodology | 27 beneficiary's symptoms, diagnosis, and medical history to determine medical necessity and explain how they arrived at their decision. Physicians also determined whether the MAO offered an alternate service to the beneficiary and if so, whether the alternate service was clinically sufficient to meet the beneficiary's needs. For cases in which the physician reviewer indicated that the service was not medically necessary for the beneficiary, OIG determined the denial to be appropriate because Medicare does not pay for services that are not medically necessary. For any case for which the physician reviewer determined the service was medically necessary, or for which the physician reviewer wanted to consult with other physicians, we convened a panel of three physicians to discuss the case (see more on physician conference calls, below). Services were determined to be medically necessary if the three-physician panel reached consensus that the requested service was medically necessary for the beneficiary. For denied requests that the physician panel determined were medically necessary, a health care coding expert reviewed the case to determine whether the request met Medicare coverage rules. To do this, the health care coding expert reviewed the circumstances of the case, including the specific justification(s) that the MAO cited to deny the service and the panel's explanation for why the service was medically necessary. The health care coding expert then assessed-conferring with the physician reviewer as needed-whether the request met applicable Medicare coverage rules and/or criteria from the MAO Evidence of Coverage document. Quality Assurance To promote consistency and accuracy across reviews, we issued a study-specific guidance document for improved decision-making, provided training to all physicians and health care coding experts, facilitated conference calls with the panel of physician reviewers, and conducted quality assurance reviews. Guidance Document. We worked with the health care coding experts and physician reviewers to develop a structured protocol to ensure thorough and consistent case reviews. We provided reviewers with a guidance document that included detailed instructions for each question in the health care coding and physician protocols, definitions for key terms, and a list of frequently asked questions. The guidance included detailed instructions for determining whether a case was eligible for the study, which types of cases should be referred for physician review, and how to determine whether a denial met Medicare coverage and/or MAO billing rules. Training. We provided two trainings for each reviewer type (i.e., health care coding experts and physicians) regarding the OIG protocol for reviewing the denial cases. The trainings included a review of the guidance document and an explanation of the protocol questions. We also conducted pre-test reviews with some reviewers to pilot the protocols and give feedback to reviewers. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Detailed Methodology | 28 Physician Consensus Calls. We facilitated regular conference calls for physician reviewers to examine the medical necessity of individual cases and to promote consistency across reviews. During these calls, physician reviewers discussed cases that a physician reviewer assessed to be medically necessary or wanted to discuss with the rest of the physician panel. Denial cases were determined to be medically necessary if the physician reviewer and the physician panel reached consensus that the case was medically necessary. Quality Assurance Reviews. We reviewed health care coding expert and physician protocol responses to ensure that they were following the standardized review protocols when assessing cases. We worked with the medical review contractor to identify and address any inconsistencies across health care coding and physician clinical reviews. Separately, we worked with health care coding experts and physicians to clarify or discuss any questions we had about their protocol responses. We also had a health care coding expert conduct independent second reviews for a portion of denial cases. Finally, we reviewed each case using the original case file and additional information we collected from MAOs to ensure: (1) that it was eligible to be included in our sample and (2) that protocol responses accurately reflected the circumstances of the case. Analysis We analyzed the results of the reviews by health care coding experts and the clinical reviews by physicians, and we generated population estimates of the prior authorization denials and payment denials that met Medicare coverage rules and MAO billing rules. We also generated population estimates for the rates at which MAOs initially denied prior authorization denials and payment denials in our sample that met Medicare coverage rules and MAO billing rules, but then reversed their decision before our data request (within 3 months). See Appendix A on page 31 for point estimates, 95-percent confidence intervals, and key statistics. To examine the reasons that denials occurred for requests that met Medicare coverage rules and MAO billing rules, and the service types associated with those cases in our sample, we conducted qualitative analysis of the case files and case review results. We coded each denial that met Medicare coverage rules as resulting from one or more of six causes that surfaced from the reviewed cases. To determine the cause of denials for requests that met Medicare coverage rules, we examined the MAO's justification for the denial, the results of the health care coding expert reviews and/or physician clinical reviews, and relevant documentation in the case files. In some cases, we determined that the denials resulted from more than one cause, for example, when an MAO applied MAO clinical criteria not in Medicare coverage rules and required unnecessary documentation. To describe service types, we categorized items or services using information from the case files. Because of the small number of denials within each stratum that met Medicare coverage rules, it was not possible to project the results of the denial causes and service type categories. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Detailed Methodology | 29 To provide cost information for the denials in our sample that met Medicare coverage rules, we reviewed case files to determine if cost information was available. If available, we included this information in Appendix B and in some of the case examples presented in the report. For cases where the MAO reversed the denial and documented paying for the service, we used the actual amount paid to the provider. For all other cases, we used the actual or estimated cost of the denied service as reported by the MAO. Because a significant number of cases in the sample did not have cost data in their records, we were not able to estimate the overall costs associated with denials that met Medicare coverage rules. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Detailed Methodology | 30 APPENDIX A Point Estimates and Confidence Intervals for Denials of Prior Authorization and Payment Requests That Met Medicare Coverage Rules, Issued by 15 Selected MAOs During June 1–7, 2019 95-Percent Confidence Interval Weighted Description Frequency Percentage Lower Bound Upper Bound Denials of prior authorization 1,631 13.3% 8.9% 19.3% requests that met Medicare coverage rules Denials of prior authorization 343 2.8% 1.4% 5.7% requests that met Medicare coverage rules and were reversed within 3 months Denials of payment requests that 28,949 18.1% 11.7% 26.8% met Medicare coverage rules Denials of payment requests that 10,140 6.3% 3.0% 12.9% met Medicare coverage rules and were reversed within 3 months Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix A | 31 APPENDIX B Detailed Descriptions of Denials for Requests That Met Medicare Coverage Rules Prior Authorization Denials of Requests That Met Medicare Coverage Rules Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D221 Imaging: MRI of A 69-year-old Applied MAO The MAO denied the request and cited internal clinical criteria Denial $365 right hand continued to have clinical criteria requiring an inconclusive x-ray and documentation that the patient reversed upon without contrast pain and not in had not improved with more conservative treatment. However, appeal weakness in Medicare our reviewers determined that an MRI was necessary for this a hand 5 months coverage rules patient and the NCD for MRIs does not require that a beneficiary after a fall. receive an x-ray prior to receiving an MRI. Our physician panel Required explained that an x-ray would not be sufficient for this patient unnecessary because some hand injuries, such as those involving small bones, documentation muscles, and ligaments in the hand, may not be immediately visible with an x-ray. The panel noted that delayed treatment could cause further harm for this patient because the muscles and ligaments might retract. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 32 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D249 Imaging: Chest A 68-year-old Required The MAO requested unnecessary additional medical records to Not reversed $154 CT who was a smoker unnecessary support the scan, asking for the results of the previous chest x-ray had a history of documentation and CT scan. When the provider did not submit those results lung nodules. within 1 week, the MAO denied the request. The MAO also cited Applied MAO internal clinical criteria that limited CT scans based on the size of clinical criteria nodules and the receipt of chest x-rays. However, our physician not in panel determined that given the patient's history as a smoker, and Medicare the presence of a lung nodule, the case file contained sufficient coverage rules clinical evidence to determine that the requested scan was medically necessary. A health care coding expert then determined that the request met all other applicable Medicare requirements, including that the NCD for CT scans does not require prior x-rays or that the nodules be a specific size. D406 Imaging: MRI of A 91-year-old had Applied MAO The MAO denied the service and cited internal clinical criteria Not reversed $297 the lumbar spine lower extremity clinical criteria stating that the patient had not completed 6 weeks of provider- without contrast pain that radiated not in directed treatment in the last 3 months. However, our physician into the upper Medicare panel determined the MRI was medically necessary to plan leg, hip, and lower coverage rules treatment options due to the patient's age, symptoms, and results back (sciatica). of a previous back x-ray. Further, the NCD for MRIs does not state Back x-rays that completion of prior conservative therapy is needed before showed scoliosis receiving an MRI. and joint disease. D397 Imaging: A 77-year-old had Determined The MAO denied the request, stating that conducting a CT in this Not reversed $1,400 Shoulder CT scan a history of left that the context was investigational and, therefore, not covered by for preoperative shoulder pain that request did Medicare. However, our physician panel determined that a CT evaluation had progressed not meet scan was warranted and within expected standards of care because for the last 3 Medicare it could more accurately assess the condition of the shoulder and years. The patient coverage determine type of surgery needed. Further, the applicable NCD had received criteria did not indicate that the use of a CT scan in this context was therapy and considered investigational. injections, but the patient's condition had not improved. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 33 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D421 Imaging: CT of An 81-year-old Applied MAO The MAO denied the request and cited internal clinical criteria Denial No cost chest, abdomen, had clinical criteria which required information to support that the disease had spread reversed upon available and pelvis adenocarcinoma not in to the cervix or that the tumor was advanced. However, our appeal of the Medicare physician panel determined that the request was consistent with endometrium, a coverage rules the applicable NCD and had sufficient documentation to show that cancer of the the CT scan was needed to determine the stage of the cancer, lining of the whether it had spread, and to determine the appropriate course of uterus. Required treatment for the beneficiary. unnecessary documentation D479 Imaging: Chest A 64-year-old Applied MAO The MAO denied the CT scan and cited internal clinical criteria that Not reversed $150 CT with a pacemaker, clinical criteria require prior x-ray imaging results to prove medical necessity. Our diabetes, not in physician panel determined the CT scan was needed to exclude a hypertension, and Medicare life-threatening diagnosis (aneurysm) considering the beneficiary's heart valve coverage rules symptoms and comorbidities. Further, the applicable NCD does disease was seen not require that a patient receive an x-ray prior to receiving a CT for chest pain and scan. shortness of breath. D427 Imaging: MRI of A 75-year-old had Applied MAO The MAO denied the MRI request and cited internal clinical criteria Not reversed $275 lower extremity left hip pain and clinical criteria requiring that the beneficiary receive conservative treatments for 6 joint without an x-ray showing not in weeks. However, our physician panel determined an MRI was contrast mild degenerative Medicare medically necessary due to the beneficiary's signs and symptoms changes. An coverage rules of hip changes and altered gait. Further, NCD guidelines do not exam revealed a require conservative treatment prior to an MRI. limp caused by the pain. The beneficiary had tried nonsteroidal anti-inflammatory drugs, oral steroids, and immobilization with a brace. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 34 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D472 Imaging: MRI of A 65-year-old had Applied MAO The MAO denied the request (after requesting and not receiving Denial $300 abdomen a history of chest clinical criteria additional records) stating that the beneficiary would need to wait reversed upon pain that radiated not in at least 1 year for another MRI given the size of the largest lesion. appeal to the shoulder Medicare The MAO cited internal clinical criteria that allowed follow-up MRIs and left jaw. The coverage rules only at 12 months for a lesion of 1-2 cm in size or at 6-12 months beneficiary had a for lesions greater than 2-4 cm in size. A health care coding expert previous MRI Required determined that the applicable NCD does not restrict the timing of showing two unnecessary MRIs based on the size of the lesion. Furthermore, using clinical adrenal lesions of documentation information already in the case file, the physician panel stated the indeterminate MRI was medically necessary to determine whether the lesions origin, the largest seen on the CT scan were malignant. of which was 1.5 cm. D236 Post-acute care: An 81-year-old Applied MAO The MAO denied the request stating that the beneficiary did not Denial $425 per day Discharge to a had a history of clinical criteria have a need for skilled care in accordance with internal clinical reversed upon skilled nursing dementia, not in criteria. However, our physician panel determined that the appeal facility (SNF) hypertension and Medicare admission to a SNF was medically necessary and consistent with was legally blind coverage rules the Medicare Benefit Policy Manual because the beneficiary due to glaucoma. required physician supervision and should have access to physical The patient was and occupational therapy. admitted to the hospital for worsening dementia and acute agitation. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 35 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D260 Post-acute care: A 64-year-old had Required The MAO denied the request stating that it needed to review the Denial No cost Discharge to a a diagnosis of unnecessary beneficiary's most recent therapy records and suggested that the reversed upon available SNF cellulitis (a documentation beneficiary's needs could be met either in the current hospital appeal bacterial skin setting or at a lower level of care (home health services). Our infection) on leg physician panel determined that the medical records available to and bedsores with the MAO were sufficient to demonstrate that given the complaints of beneficiary's deteriorating functional status and morbidities, the worsening beneficiary should have been discharged to a SNF with access to swelling, redness, physical and occupational therapy. Further, a health care coding and pain in lower expert determined that the request for a SNF admission was right leg. consistent with the Medicare Benefit Policy Manual. D426 Post-acute care: A 63-year-old had Determined The MAO denied the request, stating that the beneficiary did not Not reversed No cost Discharge to a a complex that the meet coverage criteria for admission to a SNF because the available SNF medical history request did beneficiary may not be able to do 1 to 2 hours of therapy per day. including multiple not meet Our reviewers determined that SNF was medically necessary for chemotherapy Medicare this beneficiary and in line with the Medicare Benefit Policy regimens, coverage Manual. The beneficiary had multiple ongoing medical conditions cognitive criteria which need daily skilled nursing care. Further, the beneficiary impairment, and could have benefited from and tolerated occupational or physical prior stroke was therapy. treated in the hospital for cough, fatigue, and shortness of breath. D270 Post-acute care: A 67-year-old was Determined The MAO denied the request stating that the beneficiary's Not reversed No cost Discharge to an diagnosed with that the condition did not meet Medicare coverage rules for admission to available inpatient acute right-sided request did an IRF. However, our physician panel determined that admission rehabilitation ischemic stroke not meet to an IRF was medically necessary and in line with the Medicare facility (IRF) and seen at the Medicare Benefit Policy Manual. The beneficiary had difficulty swallowing, emergency coverage was at significant risk of aspiration and fluid penetration, at high department with criteria risk for pneumonia, and, therefore, should have been under the new onset slurred frequent supervision of a rehabilitation physician. speech. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 36 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D278 Post-acute care: A 68-year-old had Determined The MAO denied the request stating that the beneficiary's Not reversed No cost Discharge to an chronic that the condition did not meet all medical necessity criteria for admission available IRF obstructive request did to an IRF under Medicare guidelines. The MAO recommended pulmonary not meet instead that the beneficiary could be discharged to a SNF, home disease, Medicare health, or home with outpatient therapy. Our physician panel congestive heart coverage determined that the recommendations for outpatient therapy were failure, and criteria not sufficient and that admission to an IRF was necessary and peripheral consistent with the Medicare Benefit Policy Manual. The vascular disease. beneficiary had ongoing medical conditions that could generate The beneficiary more medical complications if not closely assessed by a physician was admitted to daily. The beneficiary also had the ability and need to participate the hospital with a in physical therapy and occupational therapy for 3 hours at least femur fracture 5 days per week, needed help with walking, and at least two and underwent a people to help with balance and recovery from the screw screw placement placement in the beneficiary's hip. surgery. After the surgery, the beneficiary developed anemia and pneumonia. D343 Post-acute care: An 89-year-old Determined The MAO denied the request stating that the beneficiary did not Denial $3,039 Discharge to an had a history of that the have a medical problem that required care in an IRF. However, our reversed upon IRF Parkinson's request did reviewers determined that the requested inpatient rehabilitation appeal disease, dementia, not meet stay met requirements in the Medicare Benefit Policy Manual and and prostate Medicare was medically necessary because it would allow the beneficiary to cancer who had coverage regain the ability to perform the activities of daily living that the been treated in criteria beneficiary was able to do prior to the hospital admission. the emergency department. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 37 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D393 Post-acute care: A 75-year-old was Determined The MAO denied the request stating that the beneficiary did not Not reversed $750 per day Discharge to an hospitalized after that the need daily care from a physician, as required by the Medicare IRF a motorcycle request did Benefit Policy Manual. However, our physician panel determined accident with rib not meet that the beneficiary did require this level of care from a physician fractures, a Medicare due to the beneficiary's complex health needs and medical history collapsed lung, coverage and felt that the beneficiary could tolerate the level of therapy in and an acute criteria the inpatient rehabilitation facility. The MAO's medical director kidney injury. The offered 5 days of skilled nursing care, but our physician reviewer beneficiary had a judged that this alternative care would be insufficient for this history of heart patient. attacks, irregular heart rate, diabetes, and chronic obstructive pulmonary disease. D224 Injection: Steroid A 66-year-old Applied MAO The MAO denied the request stating that the beneficiary was not Denial $261 injection in the suffered neck pain clinical criteria currently enrolled in or planning to complete formal therapy or a reversed upon cervical spine from degenerative not in home exercise program, a requirement from internal clinical appeal disc disease that Medicare criteria. However, our reviewers determined that the injection was had not improved coverage rules medically necessary given the beneficiary's diagnostic test results from conservative and history of completing conservative therapy without relief. therapy. Further, a health care coding expert determined that there was no NCD or LCD relevant to this service, and thus there is no Medicare requirement that beneficiaries enroll in a therapy or exercise program before receiving treatment. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 38 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D199 Injection: Botox An 82-year-old Required The MAO denied the request and cited a lack of clinical Not reversed $3,674 injection for urge was diagnosed unnecessary information about the beneficiary's previous medication use and (MAO noted incontinence with urge documentation asked for additional records. However, the MAO had already that it reversed incontinence. received records documenting this information as part of the prior the denial after Beneficiary had authorization request, making the request for additional receiving OIG's been receiving documentation unnecessary. data request) Botox injections, but the effectiveness was perceived to be wearing off, so requested a stronger dose. D416 Injection: A 66-year-old had Required The MAO denied the injection request after asking for more Not reversed No cost Sacroiliac joint lower back pain unnecessary documentation. The MAO stated that the available doctor's notes available injection for pain that radiated into documentation did not support medical necessity. Our physician panel management the legs. Patient determined that, based on the information available in the case had both knees file, the injection was medically necessary as opioids and anti- replaced and used inflammatory medications were not reasonable alternatives to a shoe lift to treat manage the patient's pain. Further, our health care coding expert a leg length determined that the request met requirements in the applicable discrepancy. LCD. Patient experienced significant pain when standing or walking with no improvement from previous conservative treatments. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 39 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D339 Injection: A 75-year-old had Applied MAO The MAO denied the request stating that the beneficiary's blood Not reversed $754 Injection to treat low blood iron clinical criteria counts were not low enough to meet requirements established in anemia level caused by not in internal clinical criteria. Our reviewers determined that the abnormal kidney Medicare requested item was necessary and reasonable given the downward function. coverage rules trend in the beneficiary's hemoglobin count, and that the beneficiary met the requirements in the applicable NCD. D401 Injection: Upper A 72-year-old had Determined The MAO denied the service stating that per Medicare coverage Not reversed $238 cervical spine severe, worsening that the rules, the requested injections were covered only for the lower (C1-2) joint neck pain, and request did areas of the spine, and not at the C1-2 joint. However, our health injection scans showed not meet care coding expert determined that the LCD referenced by the deterioration and Medicare MAO does not preclude the use of injections in the C1-2 joint. changes in spine. coverage Further, our physician panel determined that an injection at this Beneficiary had criteria level is a reasonable diagnostic and therapeutic option and that tried other the service was medically necessary given the beneficiary's chronic, conservative continuous pain. treatments with limited improvement. D475 Injection: A 59-year-old had Determined The MAO denied the request stating that the number of injections Not reversed $95 Cervical/ thoracic a diagnosis of that the requested exceeded the Medicare coverage limit of (1) one to two facet injection spondylosis request did injections per section of the spine per session, or (2) up to five (degenerative not meet injection sessions in a 12-month period. However, our health care osteoarthritis of Medicare coding expert determined that the LCD the MAO cited does not the spine) and a coverage include a limit on the number of injections per section of the spine history of neck criteria per session, and that the requested session would not cause the pain, low back beneficiary to exceed five sessions in a 12-month period. Further, pain, and pain in our physician panel determined that the injection was medically both hips. necessary and noted that the beneficiary experienced significant relief from two previous injection sessions. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 40 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D232 Durable medical A 93-year-old had Manual review The MAO denied the request, incorrectly stating that the only Not reversed $150/month equipment: a history of error diagnosis listed in the beneficiary's medical records was Hospital bed with epilepsy, early hypertension. This finding led it to determine that the beneficiary rails onset Alzheimer's, Applied MAO did not meet internal clinical criteria for a hospital bed because rheumatoid clinical criteria there was no indication of a condition requiring positioning that arthritis, chronic not in could not be accommodated by a standard bed. However, our back pain, knee Medicare reviewers determined the request was medically necessary and in and joint stiffness, coverage rules accordance with the NCD for hospital beds due to the beneficiary's and limited range chronic conditions and movement limitations. of motion. D294 Durable medical An 83-year-old Applied MAO The MAO denied the request based on internal guidelines stating Not reversed $1,476 equipment: had progressive clinical criteria that the lift would not improve the beneficiary's balance or Hydraulic lift cognitive not in ambulation and that it is only for beneficiaries who require impairment, Medicare complete assistance with sit-to-stand transfers. However, our progressive coverage rules physician panel determined that this item was medically necessary decline in walking, given the patient's mobility needs and progressive weakness and cervical spine to decrease the risk of falls during transfers to and from bed. stenosis, and Further, our reviewers determined that the proposed use was worsening urinary consistent with the applicable LCD. incontinence. D419 Durable medical A 57-year-old had Required MAO denied the request after requesting more documentation Not reversed No cost equipment: multiple sclerosis, unnecessary from the beneficiary's doctor. The MAO stated that the patient did available Manual hypertension, documentation not meet wheelchair criteria from Medicare coverage rules, such as wheelchair bladder documentation of whether the beneficiary could propel the dysfunction, tibia wheelchair and whether it could be used in the beneficiary's home. fracture, and However, our reviewers found that there was already mobility issues documentation in the beneficiary's file that demonstrated the related to beneficiary met established criteria in the applicable LCD. Further, activities of daily our physician panel determined a wheelchair was medically living. necessary because of the beneficiary's fractured tibia. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 41 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D460 Durable medical A 76-year-old had Applied MAO The MAO denied the request and cited internal clinical criteria, Not reversed $112 equipment: a history of joint clinical criteria stating that the beneficiary was not eligible to receive a walker Walker pain, post-polio not in because the beneficiary had already received a cane within the syndrome, ankle Medicare past 5 years. The internal clinical criteria considered a cane and and foot surgery, coverage rules walker to be "same or similar" devices and limited beneficiaries to and was at-risk for one such device every 5 years. However, according to our falls. physician panel, a cane was not stable enough given the beneficiary's history of polio and arthritis, fall risk, and physical therapy notes that the right knee buckled and the right shoulder was in pain. Further, our health care coding expert determined that the LCD for walkers did not include a 5-year restriction on more than one ambulatory device. D320 Physician An 85-year-old Applied MAO The MAO denied the consultation stating that there was no Not reversed $286 services: had type 2 clinical criteria evidence that the beneficiary experienced restricted blood flow or Interventional diabetes with not in a blockage of the arteries, as required by internal clinical criteria. radiology consult polyneuropathy Medicare However, the applicable NCD includes no such requirement and and follow-up for (dysfunction in coverage rules our physician panel determined this service was medically peripheral arterial the nerves) and necessary given the beneficiary's unstable condition and lack of disease venous sensation below the hips. insufficiency (restricted blood flow from the limbs to the heart). D300 Physician An 80-year-old Determined The MAO denied the request for a follow-up visit to the physician Denial $1,641 services: Referral received that the who treated the beneficiary in the emergency department citing reversed after for a follow-up treatment in the request did Medicare's prohibition against self-referral by physicians. provider office visit after emergency not meet However, the MAO determined that the original denial was inquiry an emergency department for a Medicare inappropriate because Medicare self-referral rules make an department visit. fractured coverage exception for emergency department follow-up care. humerus. criteria Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 42 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D463 Physician A 72-year-old had Applied MAO The MAO denied the followup visit citing internal clinical criteria, Not reversed $140 services: Breast a history of clinical criteria but it did not indicate the specific criteria that were not met. cancer follow-up breast cancer not in However, Medicare does not have a policy that explicitly addresses visit with a surgery and Medicare followup visits after cancer treatment. Further, our physician panel radiation partial coverage rules determined that the visit with the radiation oncologist was oncologist mastectomy. medically necessary and reasonable, as there may be potential cardiac, pulmonary and other complications from breast radiation and the most appropriate physician to evaluate these would be the radiation oncologist, who would then be able to make appropriate treatment and referral decisions on the patient's behalf. D193 Surgery: A 74-year-old was Applied MAO The MAO denied the request stating that the beneficiary's medical Denial $1,096 Implantation of a diagnosed with clinical criteria records lacked evidence that the beneficiary experienced reversed after neurostimulator full incontinence not in incontinence episodes for at least 2 weeks over a 6-month period, peer to peer device that can of feces. The Medicare criteria established in internal MAO review guidelines. Our was conducted treat bowel beneficiary had coverage rules reviewers determined that the service was necessary and by Medical incontinence involuntary stool consistent with the applicable NCD based on documentation Director with and gas leakage Required showing that the beneficiary had, for years, tried more additional that had not unnecessary conservative treatments with no improvement. information improved with documentation other conservative treatments. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 43 Case Service Beneficiary Denial cause Denial summary Resolution at Cost (actual ID requested profile time of OIG or data request estimated) D207 Surgery: Reverse A 72-year-old Applied MAO The MAO denied the request stating that the beneficiary did not Not reversed No cost total arthroplasty experienced pain clinical criteria meet requirements from internal clinical criteria, such as providing available - a surgical in the right not in the results from an exam that uses physical manipulation of the procedure that shoulder for years. Medicare joint to test for pain and confirmation from an MRI that the tendon repairs and An x-ray coverage rules structures needed repair. However, our physician panel provides a demonstrated determined that there was already sufficient clinical information in prosthetic osteoarthritis and the beneficiary's medical records to justify the joint replacement replacement for a physical exam with the tendon structure repair based on the beneficiary's history, the shoulder joint indicated a physical exam, and x-ray. Further, Medicare does not have an NCD (including the Popeye deformity or LCD specific to reverse shoulder arthroplasty and so does not rotator cuff tear (reflecting an require the results of these tests for approval. and biceps abnormal tendon) shortening or displacement of the bicep muscle). The patient had completed 6- weeks of physical therapy. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 44 Payment Denials That Met Medicare coverage rules and MAO billing rules Case Service received Beneficiary Denial cause Denial summary Resolution at time Cost: ID profile of OIG data actual or request estimated D489 Imaging: x-rays of A 67-year-old Manual review error The MAO denied payment stating that there was no prior Denial reversed $102 shoulders and had lupus and authorization on file. The provider disputed the denial, after provider knees osteoarthritis. Misapplied MAO stating that no prior authorization was required for that dispute rule service and the MAO agreed. D178 Imaging: MRI of A 20-year-old Manual review error The MAO denied payment for the service, stating that it Not reversed $73 the lower spine was diagnosed needed documentation from the beneficiary's primary (MAO noted that it with lumbar insurance carrier. After OIG's data request, the MAO reversed the denial spondylosis acknowledged that the requested documentation was after receiving OIG's (degeneration in already included in the original claim. data request) the bones of the spine). D383 Imaging: A 48-year-old System processing The MAO denied the payment, stating that services Not reversed $73 Echocardiogram, a was diagnosed error received during an inpatient stay required prior (MAO noted that it type of imaging with heart authorization. After OIG's data request, the MAO reversed the denial test of the heart disease received acknowledged that it had a prior authorization on file after receiving OIG's an already, but had not identified it because non-behavioral data request) echocardiogram services (e.g., the echocardiogram) were billed to a during an separate entity from behavioral services (e.g., the inpatient patient's inpatient psychiatric admission). psychiatric admission. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 45 Case Service received Beneficiary Denial cause Denial summary Resolution at time Cost: ID profile of OIG data actual or request estimated D019 Durable medical A 65-year-old System processing MAO denied payment stating that the nebulizer was Denial reversed $5 equipment: Home had chronic error being rented from an out of network provider. However, after provider nebulizer rental obstructive because a participating provider had issued a referral for dispute (nebulizers change pulmonary Misapplied MAO this service, the MAO's requirements for plan directed medication from disease (a rule care had been met. liquid to mist) chronic inflammatory lung disease that causes obstructed airflow from the lungs). D024 Durable medical A 68-year-old System processing MAO denied payment stating that the service had not Denial reversed $22 equipment: uses a error been authorized. Upon review, the MAO found that an after provider Wheelchair rental wheelchair. authorization had been approved but that the MAO had dispute failed to link the authorization number to the payment request. D073 Physician services: A 58-year-old System processing The MAO denied payment stating that the required prior Denial reversed $82 Radiation treatment had skin cancer error authorization was not on file. However, the provider after provider consultation of the nose. submitted a copy of an authorization letter from the dispute MAO that included the service and date of service. D096 Physician services: A 73-year-old System processing The MAO denied payment stating that payment for the Denial reversed $230 Hospital visit for received critical error services should be bundled. However, after the provider after provider respiratory failure care services disputed the claim, the MAO later determined these dispute from a physician. services had in fact been billed correctly. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 46 Case Service received Beneficiary Denial cause Denial summary Resolution at time Cost: ID profile of OIG data actual or request estimated D119 Physician services: A 73-year-old System processing The MAO denied payment for the visit, stating that no Denial reversed $114 Eye exam and with glaucoma error prior authorization was in place for the out-of-network after provider treatment received an provider. A prior authorization had been approved for dispute ophthalmological the procedure but listed a different, though related, exam. procedure code than the one included on the claim. The provider resubmitted the claim showing the existing prior authorization. The MAO acknowledged that either procedure code could have been used to pay the claim and that the original claim was denied in error. D177 Physician services: A 57-year-old Manual review error The MAO denied the payment stating that there was no Not reversed $81 Office visit visited the doctor prior authorization on file. After OIG's data request, the (MAO noted that it for a sinus MAO acknowledged that a prior authorization was not reversed the denial infection. needed because the provider was in-network and had after receiving OIG's been marked out of network due to a manual error. The data request) MAO reversed the denial and paid the provider. D187 Physician services: An 85-year-old Manual review error The MAO denied the payment for lack of prior Not reversed $50 Treatment of was being authorization. Typically, the MAO required a beneficiary (MAO noted that it chronic ulcer on the treated in a Misapplied MAO to receive a prior authorization to use a non-contracted reversed the denial foot skilled nursing rule provider. However, because the beneficiary was in an in- after receiving OIG's facility. network skilled nursing facility, the claim met the MAO data request) and CMS requirement for "plan directed care" and, therefore, no prior authorization was required. D385 Surgery: Breast A 72-year-old Manual review error The MAO denied payment for the procedure stating that Not reversed $4,043 reconstruction had a cancerous the service was not covered. However, the MAO's claims (MAO noted that it surgery breast tumor. analyst incorrectly denied the entire claim, rather than reversed the denial denying several line items that were noncovered services. after receiving OIG's The MAO paid the claim after it discovered the error. data request) Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 47 Case Service received Beneficiary Denial cause Denial summary Resolution at time Cost: ID profile of OIG data actual or request estimated D090 Surgery: Intestinal A 67-year-old System processing The MAO denied payment for the procedure stating that Denial reversed $1,985 obstruction had laparoscopic error the claim was submitted too late. However, the provider after provider surgery to submitted evidence that the invoice had been previously dispute remove an submitted to the MAO. obstruction in stomach. D128 Surgery: Cardiac An 80-year-old System processing The MAO denied payment for the service, incorrectly Not reversed $401 surgical procedure underwent error stating that there was no prior authorization on file. (MAO noted that it surgery for the Although the beneficiary had received prior authorization reversed the denial removal and for the surgery, the MAO denied the provider's payment after receiving OIG's replacement of a request six times. data request) defibrillator, an implanted device to help control pacing of the heart. D454 Inpatient hospital: A 93-year-old System processing The MAO denied payment for two service codes, stating Not reversed $502 Inpatient admission was diagnosed error that the diagnosis codes were listed incorrectly on the and advanced care with congestive claim. However, our reviewers found that of the two planning heart failure, services on the claim, one was correctly coded and anemia, coronary should not have been denied. artery disease and myelodysplastic syndrome (a disorder of the production of blood cells). Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 48 Case Service received Beneficiary Denial cause Denial summary Resolution at time Cost: ID profile of OIG data actual or request estimated D183 Inpatient hospital: A 72-year-old Manual review error The MAO denied the payment because the request did Not reversed $6,218 Hospitalization went to the not have required information, such as discharge (MAO noted that it after emergency emergency room summary and physician's notes and orders. After OIG's reversed the denial room visit and was data request, the MAO acknowledged that the after receiving OIG's diagnosed with a information had already been received and ultimately data request) pulmonary reversed the denial. embolism, a blockage in the arteries in the lungs. D440 Inpatient hospital: An 80-year-old Applied MAO clinical The MAO denied the provider's request for inpatient Not reversed $9,516 Inpatient admission went to the criteria not in admission based on internal clinical criteria and stated emergency room; Medicare coverage that the patient did not need an inpatient level of care. the patient had rules The MAO offered a lower level of care: observation. fallen 24 hours However, our physician panel determined that the before and was patient's age and health concerns, such as a fall at home unable to get up. and hip fracture, required a higher level of care than an Beneficiary was observation stay would have provided. diagnosed with a fracture in the thigh bone (femur). D116 Ambulance: A 61-year-old System processing The MAO denied payment for an ambulance trip because Denial reversed $274 Ambulance ride to with sepsis was error it had exceeded coverage limits on costs. When the after provider a health care facility transported by provider filed a dispute, the MAO acknowledged that the dispute ambulance to the contract had been updated and the ambulance ride hospital. should have been covered. D375 Ambulance: An 80-year-old System processing The MAO denied payment for the ambulance transport Not reversed $2,627 Ambulance fell at home and error for being out of area. The provider resubmitted the (MAO noted that it transport to was transported claim six times. After OIG's data request, the MAO reversed the denial hospital by ambulance to determined that the calculation of "out of area" was after receiving OIG's the hospital. completed using ground mileage rather than air mileage data request) and, therefore, was incorrect. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 49 Case Service received Beneficiary Denial cause Denial summary Resolution at time Cost: ID profile of OIG data actual or request estimated D060 Lab tests: A 53-year-old System processing The MAO denied payment stating that the approved Not reversed $30 Collection of blood was diagnosed error prior authorization only covered chemotherapy and sample (blood with multiple medications related to cancer treatment and not the lab draw) myeloma, a type work. However, after reviewing the case file, our health of cancer. care coding expert found that a valid prior authorization, which covered lab work, was in effect on the date of service. D135 Lab tests: Lab work A 70-year-old System processing The MAO denied payment, stating that it had a capitated Not reversed $54 using a blood with error contractual agreement for the provider to cover lab (MAO noted that it sample lymphedema work, meaning the MAO did not need to pay the hospital reversed the denial received separately for lab services. After the MAO received OIG's after receiving OIG's laboratory work data request, it discovered that the capitated contractual data request) on a blood agreement had ended prior to the denial and thus the sample. denial was inappropriate. D444 Therapy: Physical An 83-year-old System processing MAO denied payment, incorrectly stating that the Not reversed $108 therapy had issues with error provider was out-of-network. The MAO's established (MAO noted that it gait and mobility procedure was to manually review payment requests for reversed the denial following a providers with multiple taxpayer identification numbers, after receiving OIG's stroke. which did not happen for this payment request. The data request) MAO investigated this case after receiving OIG's data request and determined, using the correct taxpayer identification number, that the provider was in-network. D103 Therapy: Home A 91-year-old System processing The MAO denied payment stating that it was filed too Denial reversed $275 skilled nursing visit received a home error late after the date of service. The provider submitted after provider and physical skilled nursing evidence showing the claim had been filed within the dispute therapy evaluation visit and physical required timeframe. therapy evaluation. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 50 Case Service received Beneficiary Denial cause Denial summary Resolution at time Cost: ID profile of OIG data actual or request estimated D441 Radiation A 74-year-old System processing The MAO denied payment stating that no prior Denial reversed $668 treatment: was diagnosed error authorization was on file. The provider disputed the after provider Intensity with prostate denial and submitted a screenshot demonstrating that dispute Modulated cancer. prior authorization had previously been obtained for the Radiation date of service. The MAO acknowledged an error in Treatment Delivery which the number of authorized days was not being (a type of radiation recognized in its system. therapy to treat cancer) D442 Radiation A 78-year-old Manual review error MAO denied payment stating there was no prior Denial reversed $336 treatment: Delivery was diagnosed authorization on file. The provider disputed the denial after provider of Radiation with pancreatic and included a screenshot demonstrating that the MAO dispute treatment cancer. had granted a prior authorization for the billed claim. The MAO indicated that the denial resulted from human error-the claim processor did not recognize that there was an authorization on file. D433 Chiropractic: A 70-year-old Manual review error MAO denied payment stating there was no prior Not reversed $25 Chiropractic was diagnosed authorization on file. However, after OIG's data request, (MAO noted that it manipulative with the MAO found that a prior authorization had previously reversed the denial treatment radiculopathy, a been extended to cover the date of service, so the claim after receiving OIG's pinched nerve should have been approved. data request) along the spine. D435 Other test: An 85-year-old Incorrectly MAO denied part of the claim as a duplicate service, Not reversed $66 Electrocardio-gram, was diagnosed determined that the citing edits from the National Correct Coding Initiative. (MAO noted that it a procedure that with tachycardia, request did not meet After OIG's data request, the MAO indicated that the edit reversed the denial records electrical rapid heartbeat, Medicare coverage had been incorrectly applied because the services were after receiving OIG's signals from the and previously criteria rendered by physicians with different subspecialties. data request) heart had abnormal electrocardiogra m results. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix B | 51 APPENDIX C Characteristics of Sampled MAOs The 15 MAOs included in this review varied in size, enrolling between 165,000 and 5.9 million Medicare beneficiaries in 2019. Service areas for these MAOs covered all 50 States, the District of Columbia, and five territories (American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.) MAO Number of enrolled Number of States or beneficiaries in 2019 territories in service area UnitedHealth Group, Inc. 5,857,700 56 Humana Inc. 3,922,929 52 CVS Health Corporation 2,249,248 54 Kaiser Foundation Health Plan, Inc. 1,617,713 8 Anthem Inc. 1,135,946 56 WellCare Health Plans, Inc. 532,053 54 Blue Cross Blue Shield of Michigan 520,485 54 Centene Corporation 259,356 48 InnovaCare Inc. 249,523 15 Highmark Health 227,298 54 SCAN Health Plan 203,766 1 UPMC Health System 191,460 54 Medical Card System, Inc. 174,157 1 Healthfirst, Inc. 165,266 51 EmblemHealth, Inc. 165,238 54 Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix C | 52 APPENDIX D - AGENCY COMMENTS DATE: March 24, 2022 TO: Suzanne Murrin Deputy Inspector General for Evaluation and Inspections FROM: Chiquita Brooks-LaSure Administrator SUBJECT: Office of Inspector General (OIG) Draft Report: Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and comment on the Office of Inspector General's (OIG) draft report. CMS is committed to its oversight and enforcement of the requirements of the Medicare Advantage program. Medicare Advantage plans are Medicare-approved managed care plans offered by Medicare Advantage Organizations (MAOs), which are private companies, as an alternative to original Medicare. MAOs must generally cover the same benefits as original Medicare. However, as part of the managed care structure, MAOs may apply internal coverage policies that are no more restrictive than original Medicare's national and local coverage policies to ensure that plan- covered items and services are medically necessary and appropriately targeted to the beneficiary's condition and diagnostic needs. MAOs are required to establish and maintain written standards, such as coverage rules, practice guidelines, payment policies, and utilization management policies, that allow for individual medical necessity determinations. MAOs must follow national and local Medicare coverage determinations (NCDs and LCDs) and coverage guidance specified in original Medicare manuals, if specific guidelines exist for a given service. However, in many cases, NCD or LCD requirements are broad enough that an MAO may implement additional coverage requirements to better define the need for the service, as long as these additional requirements do not violate the requirements of the applicable NCD or LCD. Where there are no applicable NCDs or LCDs, MAOs may establish coverage guidelines, as long as the MAOs' guidelines are supported by medical evidence. Additionally, for services that are not subject to existing LCD and NCD requirements, MAOs may apply third-party guidelines, such as guidelines used by contractors engaged by the MAO to make coverage determinations. CMS uses several tools to oversee the Medicare Advantage program and help ensure enrollees have adequate access to health care services. For example, CMS conducts annual audits of a sample of MAOs to evaluate compliance with the terms of the MAOs' contracts with CMS; in particular, the requirements associated with access to medical services, drugs, and other enrollee protections required by Medicare. CMS also targets audits to areas of concern, such as service types with a high rate of denial. CMS notifies plans of noncompliance, such as when it believes a plan's coverage is more restrictive than under original Medicare and represents a possible barrier to accessing care. MAOs are required to submit corrective action plans to address cited Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix D | 53 deficiencies. Plans that are found to have repeated violations are subject to increasing penalties, including Civil Monetary Penalties, intermediate sanctions (suspension of payment, enrollment, and/or marketing activities), and even contract terminations. In recent years, CMS has increased the transparency of audit findings by publishing them on the Medicare.gov website and developing a publicly available audit annual report with best practices MAOs can adopt to continue improving performance. Our oversight efforts are yielding positive results, with the average number of issues cited per audit declining approximately 70 percent from 2012 to 2019. In addition, CMS has populated information on the Medicare Plan Finder website to provide beneficiaries with information on MAO performance. In addition to the Star Ratings mentioned in this report, CMS has utilized the enrollment function in Medicare Plan Finder to cease enrollment in MAOs that fail to meet certain requirements. In addition, CMS continues to examine ways in which we can use technology tools to streamline processes like prior authorization to make them less burdensome on patients and providers. While the Medicare Advantage payment denial rate is an important area to continue to monitor closely, CMS notes that the overall Medicare Advantage payment request denial rate cited by OIG for 2018 (9.5 percent) is comparable to the original Medicare denial rate during the same time period. OIG's recommendations and CMS' responses are below. OIG Recommendation CMS should issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews. CMS Response CMS concurs with this recommendation. CMS plans to issue clarifying guidance regarding appropriate use of clinical criteria in medical necessity reviews. OIG Recommendation CMS should update its audit protocols to address the issues identified in this report, such as MAO use of clinical criteria and/or examining particular service types. CMS Response CMS concurs with this recommendation. CMS will update its audit protocol if changes are necessary to align its audit processes with the guidance CMS plans to issue under Recommendation 1. Similarly, CMS will update its auditor training materials if changes are necessary as a result of the guidance CMS plans to issue under Recommendation 1. OIG Recommendation CMS should direct MAOs to take additional steps to identify and address vulnerabilities that can lead to manual review and system errors. CMS Response CMS concurs with this recommendation. CMS will direct MAOs to examine their manual review and system programming processes and address vulnerabilities that may result in inappropriate denials in keeping with clarifying guidance that CMS plans to issue under Recommendation 1. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix D | 54 CMS thanks OIG for their efforts on this issue and looks forward to working with OIG on this and other issues in the future. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Appendix D | 55 ACKNOWLEDGMENTS AND CONTACT Acknowledgments Rosemary Rawlins Bartholomew and Linda Min served as the team leaders for this study. Others in the Office of Evaluation and Inspections who conducted the study include Camille Harper, Eunji Kim, and Ivy Ngo. Office of Evaluation and Inspections staff who provided support include Joe Chiarenzelli, Kevin Farber, Robert Gibbons, and Christine Moritz. This report was prepared under the direction of Blaine Collins, Regional Inspector General for Evaluation and Inspections in the San Francisco regional office and Abby Amoroso, Deputy Regional Inspector General. Contact To obtain additional information concerning this report, contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov. OIG reports and other information can be found on the OIG website at oig.hhs.gov. Office of Inspector General U.S. Department of Health and Human Services 330 Independence Avenue, SW Washington, DC 20201 Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 Acknowledgments and Contact | 56 ABOUT THE OFFICE OF INSPECTOR GENERAL The mission of the Office of Inspector General (OIG), as mandated by Public Law 95- 452, as amended, is to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the health and welfare of beneficiaries served by those programs. This statutory mission is carried out through a nationwide network of audits, investigations, and inspections conducted by the following operating components: The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting audits with its own audit resources or by overseeing audit work done by others. Audits examine the performance of HHS programs and/or its grantees and contractors in carrying out their respective responsibilities and are intended to provide independent assessments of HHS programs and operations. These audits help reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS. The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide HHS, Congress, and the public with timely, useful, and reliable information on significant issues. These evaluations focus on preventing fraud, waste, or abuse and promoting economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI reports also present practical recommendations for improving program operations. The Office of Investigations (OI) conducts criminal, civil, and administrative investigations of fraud and misconduct related to HHS programs, operations, and beneficiaries. With investigators working in all 50 States and the District of Columbia, OI utilizes its resources by actively coordinating with the Department of Justice and other Federal, State, and local law enforcement authorities. The investigative efforts of OI often lead to criminal convictions, administrative sanctions, and/or civil monetary penalties. The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, rendering advice and opinions on HHS programs and operations and providing all legal support for OIG's internal operations. OCIG represents OIG in all civil and administrative fraud and abuse cases involving HHS programs, including False Claims Act, program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG also negotiates and monitors corporate integrity agreements. OCIG renders advisory opinions, issues compliance program guidance, publishes fraud alerts, and provides other guidance to the health care industry concerning the anti-kickback statute and other OIG enforcement authorities. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care, OEI-09-18-00260 About OIG | 57