Medicare Advantage enrollment is growing, making up 48% of all Medicare enrollment in 2022.¹ Ensuring access to care for these beneficiaries is therefore critical. While most reviews for prior authorizations are done correctly, the Office of Inspector General (OIG) found that 13% of Medicare Advantage Organization (MAO) denials for prior authorization actually met Medicare coverage rules.²

"In other words, these services likely would have been approved for these beneficiaries under original Medicare (also known as Medicare fee-for-service)."*

Specifically, the analysis found MAOs denied prior authorization and payment requests that met Medicare coverage rules by: "using MAO clinical criteria that are not contained in Medicare coverage rules (ie national or local coverage determinations); requesting unnecessary documentation; and making manual review errors and system errors." While no single service or therapy was consistently denied, costly therapies and procedures, as well as those prone to fraudulent claims, were more often denied despite meeting Medicare coverage criteria. Some example likely erroneous denials are highlighted below, alongside some reversals of the denials. The reversals point to the importance of contesting MAO denials.

• Implantation of a neurostimulator device that can treat bowel incontinence:A 74-year-old was diagnosed with full incontinence of feces. The beneficiary had involuntary stool and gas leakage that had not improved with other conservative treatments. The MAO denied the request stating that the beneficiary’s medical records lacked evidence that the beneficiary experienced incontinence episodes for at least 2 weeks over a 6-month period, criteria established in internal MAO review guidelines. OIG reviewers determined that the service was necessary and consistent with the applicable NCD based on documentation showing that the beneficiary had, for years, tried more conservative treatments with no improvement. The denial was reversed after peer to peer was conducted by Medical Director with additional information.

• Hospitalization after emergency room visit: A 72-year-old went to the emergency room and was diagnosed with a pulmonary embolism, a blockage in the arteries in the lungs. The MAO denied the payment because the request did not have required information, such as discharge summary and physician’s notes and orders. After OIG’s data request, the MAO acknowledged that the information had already been received and ultimately reversed the denial.

• Collection of blood sample (blood draw): A 53-year-old was diagnosed with multiple myeloma, a type of cancer. The MAO denied payment stating that the approved prior authorization only covered chemo.therapy and medications related to cancer treatment and not the lab work. However, after reviewing the case file, our health care coding expert found that a valid prior authorization, which covered lab work, was in effect on the date of service.

The Kaiser Family Foundation reported a similar percentage of claim denials for private insurers on the healthcare marketplace: the average in-network claims denial rate in 2021 was 16.6%,³ but the rate ranged from 1% - 80%. In the Kaiser analysis, the rate of denials did not vary considerably between types of plans. About 10% of denials were for services that lacked prior-authorization or referral, 16% were for excluded services, 2% for medical necessity reasons, and 72% for all other reasons.

The take-home message is that issuers can make errors in denials - it's important for providers and beneficiaries to advocate for access to care that is medically necessary and justified.

*In our review of outpatient Medicare fee-for-service claims, we found no denials for the high-value chimeric antigen receptor (CAR) T-cell therapies in 2021