The recently issued HHS Office of Inspector General (OIG) report focusing on Medicare Advantage plan denials titled “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care” (discussed in our companion Alert, Office of Inspector General (OIG) Issues Another Report Highlighting Inappropriate Medicare Advantage Denials) includes disturbing findings about MA plans. Based on a sample of cases from 2019, OIG found that 13% of prior authorization requests denied by MA plans met Medicare coverage rules, and would have likely been approved for coverage under traditional Medicare. Similarly, among payment requests that MA plans denied, OIG found that 18% met Medicare coverage rules. Common causes of these denials include MA plans’ use of clinical criteria that are not contained in Medicare coverage rules, plan assertions that prior authorization requests did not have enough documentation to support approval when they indeed did, and both human and system processing errors.
The Center for Medicare Advocacy has reason to believe, however, that the OIG findings actually understate the extent to which MA plans deny or prematurely terminate care. As discussed further below, this is based on: 1) our experience with OIG audits of Medicare home health claims that employ more restrictive standards than allowed under Medicare; and 2) the recent increase in MA plans’ use of artificial intelligence (AI) driven coverage software that, in our experience, appears to lead to shorter periods of coverage and more frequent terminations of care.
OIG Review of Home Health Cases
In its examination of the sample of denied requests “to assess the extent to which the denied requests met Medicare coverage rules, and thus would likely have been approved in original Medicare”, OIG notes that for many of the denials that it analyzed, MA plans “denied the requests by applying MAO clinical criteria that are not required by Medicare.” As OIG demonstrates through a number of examples highlighted in the report, it “found that in these cases MAOs used specific, mandatory requirements that resulted in the denial of prior authorization requests for medically necessary services. In contrast, original Medicare does not impose such specific requirements for covering the procedures involved.”
The OIG report focuses on several types of services, including “prior authorization requests to discharge patients from the hospital to inpatient rehabilitation facilities or to skilled nursing facilities”. In analyzing such claims, OIG notes that MA plans often justified these denials by claiming “that the patients did not need intensive therapy or skilled care, and that their needs could be met at a lower level of care, such as home health services at the patient’s residence.”
The OIG report does not, though, include any analysis of home health care claims (note that Appendix B, D103, does references a denial for home skilled nursing and PT evaluation, but the payment denial was based on an erroneous plan decision that the claim was untimely). As noted in a recent Bipartisan Policy Center paper on the home health benefit, there is evidence that with respect to home health, “[n]otably, Medicare Advantage beneficiaries receive fewer visits, have shorter episodes, and experience lower quality care” (p. 20).
The Center for Medicare Advocacy has extensive experience with analyzing and appealing claims related to the Medicare home health benefit. This includes, on occasion, analyzing claims submitted by home health agencies that are under audit by OIG. As we noted in a paper the Center contributed to the above-referenced Bipartisan Policy Center (BPC) report (found in the Appendix), misunderstandings about the potential scope, duration and other aspects of the home health benefit are
reinforced by erroneous Medicare Administrative Contractor (MAC) coverage decisions and audits, as well as audits performed by the Department of Health and Human Services’ Office of Inspector General (OIG). Care that is coverable under the law is sometimes erroneously treated as “fraud” singled out by auditors, deterring providers from offering such coverage. Auditing methodologies seem to disproportionately select home health claims that exceed the average home health length of care. More stringent scrutiny of claims for beneficiaries who require a longer duration of home health services provides yet another disincentive to serve these beneficiaries. In other words, OIG and Medicare contractors do not audit to protect either the program or beneficiaries by investigating agencies that underserve patients, even when practices such as refusing to accept or prematurely discharging beneficiaries with chronic conditions may constitute discrimination on the basis of disability. Instead, applying incorrect standards, they only focus on agencies “overserving” patients.
In other words, in our experience, when conducting audits of home health claims, OIG has sometimes inappropriately applied clinical criteria that are not contained in Medicare coverage rules – one of the same factors OIG identified as the cause of many MA plan denials. While the Center does not have access to any of OIG’s developed protocols they used for their recent report or other audits, it is possible that OIG – at least for purposes of home health claims – used overly restrictive criteria to determine that claims were not coverable when in fact they meet Medicare coverage guidelines. This could mean that the true extent of MA plan denials is broader than even OIG has found.
Increased Use of AI-Driven Coverage Determinations
As noted above, the findings outlined in the OIG report concerning inappropriate denials of care by Medicare Advantage (MA) plans include denials of skilled nursing facility (SNF) stays. This analysis only assesses denials of SNF stays altogether; it does not appear to capture other limitations of service, such as premature terminations of coverage that has been authorized by the plan. The OIG review was conducted using claims from June 2019. Based upon the Center’s experience assisting MA enrollees, including those receiving SNF care – particularly in the state of Connecticut, since that time we have witnessed a dramatic growth in MA plans’ use of artificial intelligence (AI)-driven decision-making tools through naviHealth, MyNexus and other third-party entities that plans contract with to make coverage decisions in certain care settings, including skilled nursing facilities. The required assessment of each individual patient’s needs has been replaced by “artificial” general rules of thumb.
The use of these post-acute care management companies and their AI-driven decision-making tools, in our experience, has led to frequent and repeated denials of Medicare-covered care – sometimes every few days, necessitating multiple appeals for ongoing services that the facilities often agree should continue. This phenomenon is outlined in one of our recent CMA Alerts (April 21, 2022) which provided a case study of such use, and included a link to a report on the topic we issued in January 2022.
Outside of our experience, the data to determine how widespread the use of such algorithm-driven tools is often proprietary and unavailable. As noted in our January report, we are concerned that tools focusing on utilization management (UM) err on the side of cost-savings rather than on streamlining UM or improving the quality of patient care. At the very least, CMS, OIG and others with oversight of the Medicare program should study the impact of the use of these tools.
May 5, 2022 – D. Lipschutz