Prior Authorizations in Medicare Advantage: New Concerns and How to Address Them 

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OIG Study
The Office of Inspector General (OIG) recently published a report on a study completed showing significant issues in prior authorizations for Medicare Advantage members. The investigation was sparked by a concern that Medicare Advantage organizations were denying or delaying coverage for procedures and services allowed by the Centers for Medicare and Medicaid Services in both Medicare Advantage Plans and covered under traditional Medicare benefits. In a randomly selected sample, the OIG determined that prior authorization determinations in some cases were not consistent with Medicare coverage rules and Medicare Advantage billing rules. The findings in this study were consistent with previous studies published in 2018. 

OIG Findings
In this study, 13% of the denied services met Medicare coverage rules. The study provided examples related to decisions for the payor incorrectly time limiting a follow-up MRI scan.  Another example was denying a post-polio patient a walker that had previously used a cane.  One of the issues identified in the study was the fact that Medicare Advantage Organizations were applying clinical criteria that Medicare does not require.

In the second part of the study, the OIG investigated payment denials resulting in an 18% error rate based on Medicare Advantage billing rules. One of the reasons cited in the study for the issues was human errors during the manual review process. Examples included denial of a claim for a non-par provider in an in-network facility and a reviewer missing a prior authorization that led to claim denial for radiation treatment. Other errors were related to programming issues in claims processing systems, such as incorrectly identifying tax identification numbers or incorrect time-frame identification for coverage. Another was related to a more restrictive policy requiring an x-ray before an MRI or a MRI before therapy. Other treatments were inconsistent with Medicare National Coverage Decisions governing the plan.

The list of issues identified in the study is extensive. The OIG provided CMS with recommendations that will require Medicare Advantage Organizations to consider the similar problems they may have in their prior authorization processes and procedures. CMS agreed with the OIG recommendation to issue new guidance on clinical criteria, update audit protocols and direct Medicare Advantage Organizations to take additional steps to identify and remedy issues in manual and system errors.

How ProspHire Can Help
At ProspHire, our team of utilization management experts can rapidly assess your current policies, procedures and processes for prior authorization issues and provide a detailed playbook for addressing problems identified in the assessment.  We will help you navigate the issues and mitigate potential audit risks represented by the OIG report. Working with your team, we can support the implementation of the playbook, including updating policies, training staff and executing transformation to processes and systems to remedy potential errors. We will review current prior authorization criteria and improve the accuracy and the workflow issues that may be causing problems. We believe proactive evaluation and execution can limit the risks to the organization while enhancing processes that may be causing issues for the organization. 

To read the full OIG Report: https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf

Let’s have a conversation

Deborah Holzmark

Chief Clinical Officer
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