AHA presses Department of Justice to investigate routine denials from health insurers

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The American Hospital Association has sent a letter to the U.S. Department of Justice asking it to investigate routine denials from major health insurance companies.

Going one step further, the AHA recommended that the DOJ establish a task force "to conduct False Claims Act investigations into commercial health insurance companies that are found to routinely deny patients access to services and deny payments to healthcare providers."

The recommendation was based in large part on a recent report released by the Department of Health and Human Services' Office of Inspector General, "Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care." 

According to the OIG, some of the largest Medicare Advantage plans in the U.S. have been imposing additional clinical criteria that are more restrictive than the national and local coverage policies under original Medicare. If true, this would amount to a violation of a legal obligation, as the MA program is designed to cover the same services as original Medicare.

Using a random sample of denials from a one-week period in June 2019, the report estimated the rate at which MA organizations deny prior authorization and payment requests that meet Medicare coverage rules. Specifically, OIG found that 13% of prior authorization denials and 18% of payment denials actually met Medicare coverage rules and should have been granted.

Because the government pays these organizations a roughly $1,000 per-beneficiary capitated rate, the implication in the report is that MA outfits have an incentive to deny services to patients, or payments to providers, to boost their own profits.

The report also highlighted several denials, including one instance in which a Medicare Advantage organization declined paying $150 per month for a hospital bed with rails for a 93-year-old with a history of epilepsy, Alzheimer's, arthritis, back and knee pain.

WHAT'S THE IMPACT?

Based on the report's findings, the AHA said it's time for the DOJ "to exercise its False Claims Act authority to both punish those MAOs that have denied Medicare beneficiaries and their providers their rightful coverage and to deter future misdeeds."

Only civil and criminal penalties, the group said, would be adequate in preventing widespread fraud.

Acting Assistant Attorney General Brian M. Boynton, to whom the AHA's letter was addressed, gave remarks at the Federal Bar Association's Annual Conference in 2021 in which he said "the Civil Division has increasingly been undertaking sophisticated analyses of Medicare data to uncover potential fraud schemes that have not been identified. Yet another important priority for the Department has been investigating and litigating a growing number of matters related to Medicare Part C, which is Medicare's managed care program, whistleblower suits, as well as to help analyze and support the allegations that we do receive from such suits."

The AHA said the DOJ is well equipped with anti-fraud tools to go after misconduct, and implored the agency to do so.

"A more sustained Justice Department commitment is needed to fully tackle this problem," the AHA wrote. "And it is time for the Civil Division to focus more directly on the commercial insurers who commit this fraud."

THE LARGER TREND

Enrollment in MA plans is projected to continue to grow, as well as insurers' participation in the program.

Of all Medicare beneficiaries in 2021, 42% were enrolled in a Medicare Advantage plan. The Congressional Budget Office projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to about 51% by 2030, according to the OIG report.

In 2019, CMS paid about $237 billion for Medicare Advantage plans – and MA expenditures are expected to grow to more than $600 billion by 2029.

When the OIG report was released, it garnered reaction from American Medical Association president Dr. Gerald E. Harmon, who came out in support of the Improving Seniors' Timely Access to Care Act, which would require Medicare Advantage plans to streamline and standardize prior authorization processes and improve the transparency of requirements.

"An investigation by the inspector general's office of the Health and Human Services Department into the inappropriate use of prior authorization by Medicare Advantage plans uncovered information that mirrors physician experiences," said Harmon. "Surveys of physicians have consistently found that excessive authorization controls required by health insurers are persistently responsible for serious harm when necessary medical care is delayed, denied, or disrupted."
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com