Medicare Advantage Plans now cover more than 20 million beneficiaries. These plans may offer some key benefits over traditional Medicare such as a cap on out-of-pocket expenses, lower premiums, and coverage for vision and dental. Medicare Advantage Plans have, however, presented some disadvantages for both beneficiaries and providers, especially regarding service and payment denials.
On September 27, 2018, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) published a report entitled, “Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials”. The OIG became concerned about Medicare Advantage Plans not only because they cover a large number of beneficiaries, but also because of the capitated payment model used by them. With a capitated payment model, a payment arrangement with health care service providers, such as physicians, is made in advance of services provided. Plans pay a healthcare organization a set amount for each enrolled person assigned to them, for a period of time set in advance, whether or not that person seeks care. The OIG is concerned about this type of payment method because it creates a potential incentive for Medicare Advantage Plans to inappropriately deny access to services and/or payments as a method to increase their profits. These denials may contribute to physical or financial hardship, and misuse of monies the CMS (Centers for Medicare and Medicaid Services) paid for beneficiaries’ healthcare needs. Even low denial rates can cause significant issues for Medicare Advantage beneficiaries and service providers.
Appeal, Appeal, Appeal!
Appealing is the way to manage denials, whether it be regarding preauthorization or payment. During 2014-2016 Medicare Advantage Plans overturned 75 percent of the denials, resulting in approximately 216,000 denials each year. And during this same time, independent reviewers involved in higher appeal levels overturned even more denials in favor of beneficiaries and providers.
The OIG was particularly concerned about the high number of overturned denials, raising questions about why beneficiaries and providers were denied services and payments that should have happened initially. Even more troublesome is the fact that beneficiaries and providers rarely use the appeals process specifically designed to meet their needs. Only one percent of denials were taken to the first level of appeal.
In addition, CMS audits revealed even more widespread and persistent issues relating to denials of care and payment by Medicare Advantage Plans. In 2015 alone, CMS cited 56 percent of audited Medicare Advantage Plans for inappropriate denials. And, 45 percent of these Plans sent denial letters with incomplete or incorrect information, further preventing beneficiaries and providers from filing successful appeals. Based on this information, CMS took action against some Plans, including penalties and sanctions against them.
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Our team of experts at 5 Star Consultants offers extensive knowledge and experience in all facets of home healthcare that can help your agency overcome issues such as payment denials. Do not let unfair practices harm your agency’s financial future. If you would like to discuss our services and how we can help your agency today, please contact us at [email protected] or 866-428-4040.
Excerpted from an article by Elizabeth E. Hogue, Esq.
©2018 Elizabeth E. Hogue, Esq. All rights reserved.