OIG: MA plans to inappropriately transfer home care, denying payment to providers

Medicare Advantage (MA) organizations have limited beneficiaries’ access to needed care. They also withheld payments to providers for services covered by Medicare rules, as well as MA billing rules.

That’s according to a report released Thursday by the Office of Inspector General (OIG). The report looked at data for a week in June 2019 from 15 of the largest MA organizations. This includes Humana Inc. (NYSE: HUM), CVS Health (NYSE: CVS), UnitedHealth Group (NYSE: UNH), Anthem Inc. (NYSE: ANTM), Kaiser Permanente and SCAN Health Plan.

Specifically, the OIG found that approximately 13% of prior authorization requests denied by MA plans met the criteria of Medicare’s coverage rules.

“In other words, these services likely would have been approved for these beneficiaries under the original health insurance, the OIG wrote in the report.

Although the Better Medicare Alliance pushed back against that conclusion, the organization has supported efforts to streamline the pre-authorization process.

Although this study represents only a small sample of [MA] beneficiaries and survey data show that less than half [MA] beneficiaries have already experienced prior authorization themselves, Better Medicare Alliance has strongly supported efforts to streamline and simplify the prior authorization process for patients and providers,” said Mary Beth Donahue, president and CEO of the Better Medicare Alliance, in a press release. “We look forward to our continued work with policy makers to strengthen [MA] for today’s seniors and tomorrow’s registrants.

The OIG also found that 18% of claims denied by MA plans met Medicare coverage rules and MA billing rules. According to the report, the majority of these denials were due to human error during manual claims processing reviews and system processing errors.

Generally, this finding aligns with the strong criticism that PA plans have received from home care providers regarding reimbursement.

More recently, Encompass Health Corporation (NYSE:EHC) management pointed out that MA plans did not sufficiently reimburse the company for care services.

“We don’t want to prioritize their members, but they’re going to force us to if we don’t get the fair rate we need to turn around and pay our clinicians,” Barb Jacobsmeyer, CEO of Healthcare home care and palliative care services to Encompass said Wednesday during the company’s first quarter earnings call.

Jacobsmeyer noted that Encompass would like more episodic payment contracts.

“We have industry-leading low rehospitalization rates — that’s critical for these AD plans,” she said.

In addition to denying care services and payment, MA plans also denied requests for transfer to post-acute care facilities when patients met clinical criteria for admission. In the cases reviewed by the OIG, patients were instead receiving home health services.

“In their justifications for these denials, [MA plans] often asserted that 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 in the patient’s home,” the OIG writes in The report. “However, our panel of physicians determined [that] … they would have benefited from the higher level of care ordered by the requesting doctor, and that the alternatives proposed by the [MA plans] were not clinically sufficient to meet patient needs.

Overall, the OIG recommends that the United States Centers for Medicare & Medicaid Services (CMS) issue new guidelines on clinical criteria for medical necessity examinations, update their audit protocols, and take measures to identify and address vulnerabilities that lead to manual reviews and system errors.

For its part, CMS said it agreed with these recommendations.

About Matthew R. Dailey

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