Inspector general’s reports show Medicare Advantage plans deny coverage for long-term care at high rates

The three largest Medicare Advantage organizations denied requests for long-term acute care and inpatient rehabilitation at higher rates than most of their peers in June 2024, according to the Inspector General’s Office, or IGO, a watchdog office in the U.S. Department of Health and Human Services.

Medicare Advantage is a way to combine Original Medicare and a supplemental or medigap policy. Health maintenance organizations, preferred provider organizations, and private fee-for-service companies offer the plans. They receive a federal payment per person per month to manage Medicare benefits for recipients.

Prior work by the IGO raised concerns that Medicare Advantage organizations’ use of prior authorization can in some cases result in denials and delays in access to needed care for enrollees. Medicare Advantage organizations that inappropriately deny care aren’t delivering the full value that taxpayers pay them to provide, the IGO said in a statement.

The IGO identified denials of prior authorization requests for post-acute care after a hospital stay as an area of concern. Post-accute care is medical services provided to patients immediately after discharge from a hospital, which focuses on rehabilitation and recovery.

Among the 19 Medicare Advantage organizations in the review, the three largest by enrollment denied prior authorization requests for care in long-term acute care and inpatient rehabilitation at higher rates than most of their peers in June 2024. The three largest Medicare Advantage organizations are UnitedHealth Group Inc., Humana Inc., and CVS Health Corp.

When enrollees appealed, Medicare Advantage organizations overturned 36 percent of long-term acute care denials and 43 percent of inpatient rehabilitation denials, indicating that some enrollees were initially denied medically necessary care.

Some Medicare Advantage organizations had much higher overturn rates than their peers. For example, inpatient rehabilitation overturn rates ranged by Medicare Advantage organizations from 14 percent to 86 percent. In some cases, high denial rates were driven by contractors that denied prior authorization requests on behalf of the Medicare Advantage organizations, many of which were later overturned on appeal by the Medicare Advantage organization. This raises concerns about whether contractors are receiving appropriate training and oversight from Medicare Advantage organizations.

What the OIG recommends

To efficiently identify and respond to concerning patterns of prior authorization denials, the Centers for Medicare Services, or CMS, should:

1. Regularly collect request-level prior authorization data that include service type and contractor information.

2. Assess reasons for the wide variation in long-term care hospitals and inpatient rehabilitation facilities denial and overturn rates across Medicare Advantage organizations. and contractors and take action as appropriate.

The CMS didn’t concur with either of the recommendations, the OIG said in the report.

Past reports also show denial of services

In a 2022 report, OIG physician reviewers found that among the prior authorization requests, for all service types, that Medicare Advantage organizations denied, 13 percent met Medicare coverage rules. That means these services likely would have been approved if the patients had been enrolled in Original Medicare rather than in Medicare Advantage. One of the prominent service types that was denied even though the requests met Medicare coverage rules was requests for post-acute care.

Denying requests that meet Medicare coverage rules may prevent or delay enrollees from receiving medically necessary care and can burden providers, according to a OIG report.

In a 2018 report, OIG found that when enrollees and providers appealed denied requests between 2014 and 2016, Medicare Advantage organizations overturned about 75 percent of their own prior authorization and payment denials. This indicates that at least some of these denials were inappropriate or could have been avoided, given that ultimately the plans agreed to authorize the medically necessary services and make the payments. The OIG also found that CMS, cited more than half of audited Medicare Advantage contracts in 2015 for inappropriately denying prior authorization and payment requests.

Open enrollment is in the fall

Oct. 15 to Dec. 7 is open enrollment when people on Medicare can:

• Switch from Original Medicare to a Medicare Advantage plan or vice versa.
• Join, drop, or switch a Part D prescription drug plan if they are on Original Medicare.
• Switch to a different Medicare Advantage plan if they are already on one.

However, I’ve been hearing ads on TV encouraging people to switch to Medicare Advantage because they’ve moved or are new to Medicare. Don’t believe the hype that you’ll get lots of extra benefits such as gym membership, dental coverage, eyeglasses, or no-cost premiums.

Getting those cheaper premiums and a few extra services aren’t going to help you when you’re hit for thousands of dollars for long-term care.

The disadvantages of a Medicare Advantage plans

• Comparing insurance policies is difficult. Unless seniors are careful, they could end up paying more money for fewer services.
• Seniors may have to change doctors and hospitals.
• Some Medicare Advantage plans don’t offer prescription drug benefits.
• Seniors may have to wait for the next enrollment period to transfer out of the plan if they don’t like it.
• Many members of Congress think giving private companies extra money to manage Medicare recipients’ benefits is too expensive. As a result, Medicare Advantage plans could be changed significantly or eliminated.
• Insurance companies may use high-pressure sales to get seniors to switch to Medicare Advantage plans.

Contact your state insurance commissioner’s office to get in touch with your state’s State Health Insurance Assistance Program, or SHIP. They provide free help to Medicare beneficiaries who have questions or issues with their health insurance. You can call a counselor to help you compare policies or to attend a workshop/presentation in your area.

Be sure to get help to compare policies if you’re going to buy a new medigap policy or switch. Medicare Advantage salespersons don’t have your interests at heart. They just want to make a lot more money.