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Medicare Plans Could Face Additional Appeal Scrutiny

Medicare Plans Could Face Additional Appeal Scrutiny

A recently released Health and Human Services (HHS) Office of Inspector General (OIG) report could mean Medicare Advantage (MA) and Part D plans face even greater scrutiny over high rates of appeal overturns.

As it is, the Centers for Medicare and Medicaid Services (CMS) has four major initiatives in place to help ensure that benefits are delivered and appeals are closely scrutinized:

  • The program audits look closely at how plans carry out authorization and appeals decision-making, including timeliness, consistent use of evidence-based criteria, and proper correspondence with enrollees.
  • The annual timeliness monitoring (2017 and 2018 so far) seeks to get information on timeliness for authorizations and appeals, but because universes are submitted, CMS gets to perform “mini audits” on plans on key authorization and appeals indices.
  • CMS also established an Independent Review Entity (IRE) auto-forward monitoring program where it tracks rates of untimely submissions and overturns of appeals. It has begun leveling civil monetary penalties (CMPs) under this program.
  • The Star program has several measures tied to both timeliness and appeals overturns.

In an earlier assessment looking at 2007, the OIG shared their concerns regarding MA plans’ high appeal overturn rates and the watchdog is raising the issue again in a recent report found here. Issued this month, the report notes that plans overturned 75 percent of its own authorization denials from 2014 to 2016, overturning approximately 216,000 denials each year. During the same period, the OIG said that the independent review entities overturned additional denials.

The overturn rates are concerning to both CMS and the OIG. As CMS has noted often, it aims for a “no-beneficiary-harm” standard for members. It argues that members deserve their plan benefits, and plans must determine whether services are covered in a timely and accurate manner. The OIG noted in its report that “the high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided.” The OIG states that the appeals process is rarely used. Just one percent of denials were appealed at the first-level plan appeal. It further reflected that plans have had many challenges on program audits on authorization and payment, citing the following CMS program audit statistics for 2015:

  • 56 percent of plans had inappropriate denials.
  • 45 percent of plans did not have complete or accurate appeals rights.

The OIG concluded: “CMS continues to see the same types of violations in its audits of different MAOs every year, however, more action is needed to address these critical issues.” It recommended that CMS increase oversight of plans in this area, especially those with poor track records. As well, it noted that overturns were related to the fact that plans just got it wrong the first time but also because it did not have all information at the time of the denied authorization. CMS has begun addressing this with its recent enhanced outreach requirements that many plans have yet to implement. CMS could begin auditing on this in 2019. The OIG also criticized the fact that audits factor very little into Star ratings.

While recent audits show some improvement in some areas, the OIG report could put political pressure on CMS to get more severe in the future.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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