Payers

Report: Three-fourths of Medicare Advantage denials overturned on appeal

The report from the Inspector General comes amid increasing scrutiny of Medicare Advantage organizations for potentially overcharging the government for services.

Medicare Advantage holds the promise of additional coverage for beneficiaries in a cost-controlled payment system achieved through collaboration with private insurers.

But a recently released report highlights that the program may not be doing a great job at ensuring that required services and payments are being directed to providers and beneficiaries.

An investigation into Medicare Advantage organizations from the Office of the Inspector General found that between 2014 and 2016, 75 percent of all appealed Medicare Advantage denials were being overturned, equivalent to roughly 216,000 denials a year.

What’s more is that even more denials were reversed by independent reviewers working at a higher level of the process.

Additionally during the time period analysed by the Inspector General, beneficiaries and providers only appealed around 1 percent of denials.

Medicare Advantage covers around 20 million people in 2018, meaning that even low rates of inappropriate denials could have large implications for beneficiaries and providers.

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The Centers for Medicare & Medicaid Services highlighted issues with denials of care and payments in their own probes of Medicare Advantage organizations.

In 2015, CMS cited 56 percent of audited contracts for making inappropriate denials and 45 percent of contracts for sending denial letters with incomplete or erroneous information making it difficult to file a successful appeal.

In response to the issues, the Inspector General made a few corrective recommendations including enhancing oversight of Medicare Advantage contracts, providing technical support or education to organizations that exhibit persistent problems and providing beneficiaries with clear information about serious violations by Medicare Advantage organizations.

The news comes as a number of major Medicare Advantage organizations have found themselves in hot water for potentially overcharging the government for services.

HealthCare Partners Holdings, a subsidiary of DaVita Inc., one of the nation’s largest dialysis clinic networks recently paid the federal government $270 million to settle claims that the company overexaggerated how sick their patients were in order to inflate government payments

Essentially by improperly coding medical conditions, organizations are able to boost the amount of risk adjustment payments paid out by the government for sicker patients.

In response the government has been cracking down on Medicare risk adjustment practices, potentially probing major payers like Aetna, Anthem and UnitedHealthcare.

Picture: Michail-Petrov-96, Getty Images