Senators seek accountability from Medicare Advantage insurers on claims denials

Medicare Advantage Insurers

In Congress this week, it wasn’t just pharmacy benefit managers facing scrutiny. The Senate’s Permanent Subcommittee on Investigations directed its attention towards Medicare Advantage (MA) plans, seeking explanations for claims denials. During the hearing, the committee’s chairman highlighted that letters were sent to the three largest MA plans—UnitedHealthcare, Humana, and Aetna—requesting documentation regarding their decision-making processes concerning claims denials.

Coverage denials have become a frequent occurrence for numerous Medicare Advantage (MA) enrollees, with some patients even able to anticipate the exact day they will receive such denials. It has been highlighted that MA plans are increasingly relying on artificial intelligence and data algorithms rather than input from physicians or clinical experts when making these denials. This shift towards automated decision-making has raised concerns, as there is limited oversight and transparency in the process. A recent investigation conducted by Stat revealed the growing role of these tools in coverage decisions.

The Department of Health and Human Services Office of Inspector General (OIG) has identified numerous instances where Medicare Advantage (MA) insurers denied authorization for services that met the coverage requirements. These cases included a cancer patient who faced a month-long delay in getting a routine scan to evaluate disease progression and another patient who was denied coverage for a walker after already receiving a cane. In each of these situations, the insurer’s decision disregarded the professional judgment of the treating physician regarding the necessary care for their patients, as highlighted.

The hearing panel did not include any insurer representatives. Instead, the senators listened to testimony from various policy experts, representatives from the Office of Inspector General (OIG), and the widow of a patient who experienced harm due to care denials and delays. The chief of staff at OIG stated in her submitted statement that in 2021, Medicare Advantage (MA) plans denied approximately 2.2 million prior authorization requests, accounting for about 5.5% of the total. Additionally, they rejected approximately 56.2 million payment requests, which equates to approximately 9.5% of the total.

During the period from 2014 to 2016, Medicare Advantage (MA) plans overturned their own coverage denials in 75% of cases when a member or provider appealed the decision. Additionally, the Office of Inspector General (OIG) discovered that 13% of coverage denials were for services that actually met Medicare’s coverage rules. In her opening remarks, Tinker highlighted the rapid growth of the program in recent years, with MA enrollment now surpassing 50% of total Medicare enrollment. She emphasized that this accelerated expansion has increased vulnerabilities and underscored the importance of implementing robust program integrity measures. Tinker further stated that the OIG’s work has revealed significant risks of waste, fraud, and abuse within managed care.

In her submitted remarks, the associate director of the Program on Medicare Policy at KFF drew attention to the financial incentives that may lead Medicare Advantage (MA) insurers to deny care. According to data from the Medicare Payment and Advisory Commission, MA plans incur 83% of the cost of covering key services compared to traditional Medicare, while being paid 106% of what the Centers for Medicare & Medicaid Services pays for fee-for-service Medicare. This equates to MA plans retaining $2,300 above the cost of providing care for each member.

Furthermore, the associate director highlighted significant data gaps concerning prior authorization in MA. For instance, there is a lack of information regarding the specific services that are denied and whether certain beneficiaries face more frequent care denials. Additionally, there is insufficient detail on the response times of MA plans to these requests. She emphasized that this lack of information hampers policymakers’ ability to effectively oversee the program.