HHS Report: Medicare Advantage Plans Deny Some Needed Care

13 percent of MA-denied services likely covered under original Medicare

Dena Bunis

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Published April 28, 2022

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Medicare Advantage (MA) plans deny millions of requests for medical care each year and tens of thousands of those denials are for tests and treatments that should have been approved and paid for, according to a new report from the U.S. Department of Health and Human Service’s Office of Inspector General.

“Denying requests that meet Medicare coverage rules may prevent or delay beneficiaries from receiving medically necessary care and can burden providers,” says the OIG report, issued on April 28. The federal inspectors called on the Centers for Medicare and Medicaid Services, which oversees Medicare, to more tightly regulate these plans to make sure they are following Medicare’s rules for what should be covered. Included in the report is a letter from CMS agreeing with the OIG findings, and a CMS spokesman said the agency is reviewing the findings to determine the next steps.

Enrollment in MA plans has increased significantly over the past decade, with 42 percent of Medicare beneficiaries (26.4 million) enrolled in these private health insurance plans in 2021. The Congressional Budget Office estimates that by 2030, 51 percent of Medicare beneficiaries will get their care through such plans. These insurers receive a flat monthly fee for every Medicare beneficiary they cover. Investigators said one of the concerns about such a payment method “is the potential incentive for insurers to deny access to services and payment in an attempt to increase profits.” Under original Medicare, the federal government pays providers directly for each service or treatment that Medicare covers.

In many cases, MA plans required a pre-authorization for a service, especially for complicated or expensive tests and treatment. OIG investigators reviewed pre-authorization denials from 15 MA organizations from the first week of June 2019. Investigators found that 13 percent of the services denied would likely have been paid for under original Medicare. They estimated that based on their sampling, nearly 85,000 pre-authorization requests would have been denied that year.

Denials can harm enrollees

These denials, the report says, “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.”

The report cites several examples of care being refused. In one case, an MA plan wouldn’t pay for an MRI to determine if an adrenal lesion was malignant. The plan said the lesion was too small and the patient would have to wait a year for the test. The OIG’s physician panel that reviewed these cases said the MRI was necessary and the patient should not have to wait. The plan did reverse its decision when it was appealed.

In another case, an MA plan denied a referral to an inpatient rehabilitation facility for a beneficiary with a fractured thigh bone (femur) who was recovering from surgery. The plan said the patient’s needs could be met with a lower level of care, but the physician panel determined that the beneficiary met Medicare’s requirement for a stay in a rehab facility, including the need to have access to a doctor to supervise their recovery from pneumonia and to deal with other postoperative risks.

In many of these examples, the OIG report says, the MA plans substituted their clinical criteria for the Medicare coverage rules. The report recommends that CMS issue new, more specific guidance on when and how plans can use their own criteria to decide whether to pay for care. The OIG also wants CMS to penalize plans that “are using more restrictive clinical criteria or requesting unnecessary documentation.”

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Dena Bunis covers Medicare, health care, health policy and Congress. She also writes the “Medicare Made Easy” column for the AARP Bulletin. An award-winning journalist, Bunis spent decades working for metropolitan daily newspapers, including as Washington bureau chief for the Orange County Register and as a health policy and workplace writer for Newsday.

HHS Report: Medicare Advantage Plans Deny Some Needed Care

13 percent of MA-denied services likely covered under original Medicare

Denials can harm enrollees

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