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 OIG Investigation Faults MA Plans for Coverage Denials

In a report that seeks to address whether Medicare Advantage (MA) plans misused Medicare program dollars that the Centers for Medicare & Medicaid Services (CMS) paid for beneficiary health care, the Health and Human Services Office of Inspector General (OIG) found plans “overturned 75 percent of their own denials during 2014-16, overturning approximately 216,000 denials each year.”

The report, “Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials,” said that during the same time period, independent reviewers at higher levels of the appeals process overturned additional denials in favor of beneficiaries and providers.

“The high number of overturned denials raises concerns that some MA beneficiaries and providers were initially denied services and payments that should have been provided,” OIG said. “This is especially concerning because beneficiaries and providers rarely used the appeals process, which is designed to ensure access to care and payment. During 2014-16, beneficiaries and providers appealed only 1 percent of denials to the first level of appeal.”

For its part, OIG said CMS’ own audits also discovered widespread and persistent MA plan performance problems related to denials of care and payment. As an example, in 2015, CMS cited 56 percent of audited contracts for making inappropriate denials.

“CMS also cited 45 percent of contracts for sending denial letters with incomplete or incorrect information, which may inhibit beneficiaries’ and providers’ ability to file a successful appeal,” the report said.

CMS did take action on its audit findings, OIG said, including issuing penalties and imposing sanctions. But, the problem persists, and OIG recommended that CMS 1.) enhance its oversight of MA contracts, including those with extremely high overturn rates and/or low appeal rates, and take corrective action; 2.) address persistent problems related to inappropriate denials and insufficient denial letters in MA; and 3.) provide beneficiaries with clear, easily accessible information about serious violations by MA plans.

CMS concurred with all three recommendations, OIG said in the report.

Read the full OIG report at https://oig.hhs.gov/oei/reports/oei-09-16-00410.pdf.

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