The office said the main concern is the potential incentive for Medicare Advantage plans to block access to services and payments to service providers in an effort to increase profits. Insurance companies are given a set amount of money to each patient regardless of how much care is received.
The two leading insurance industry groups — American Health Insurance Plans, better known as AHIP, and the Blue Cross Blue Shield Association — did not respond to requests for comment.
Inspector General Report
The plans have rejected some pre-authorization requests from medical providers that would potentially be covered by traditional Medicare, according to the SIGIR. Of the rejected applications, about 13% adhered to the rules for medical coverage.
The Bureau identified two common reasons for the denial. In some cases, insurance companies have used clinical criteria not found in Medicare coverage rules — such as ordering X-rays before allowing more advanced imaging, such as an MRI. Insurers have ruled in some cases that the documentation was insufficient for approval, even though SIG reviewers found existing medical records to be sufficient to support the necessity of the services.
Also, Medicare Advantage plans reject payment requests, mostly due to human errors during manual claim reviews or due to system processing errors. About 18% of denied payment requests met the Medicare coverage rules and Medicare Advantage billing rules.
Some denied advance authorization and payment requests that meet coverage and billing rules are invalidated, often due to a beneficiary or provider appeal.
Recommendations for improvement
The Office of the Inspector General recommends that the Centers for Medicare and Medicaid Services, which oversees Medicare Advantage, issue new guidance on the appropriate use of insurers’ clinical criteria in medical necessity reviews and update their audit protocols to address the issues identified in the report. It also suggests direct CMS Medicare Advantage plans to take additional steps to reduce manual review and system errors.
CMS said it agrees with all of these recommendations and outlines the next steps to take.
The agency said Medicare Advantage plans may place additional requirements to better determine the need for a medical service, but they cannot be more restrictive than Medicare’s national and local coverage policies. Performs plans compliance audits and targets areas of interest, such as services with high rejection rates. Plans that show repeated violations are subject to penalties, penalties, and termination of the contract.