Medicare Advantage plans can be a convenient way to bundle Medicare health insurance coverage with other services such as vision and dental care. However, a federal agency is sounding the alarm that some plans have denied valid requests for preapproval or payment for medically necessary treatments.
The Office of Inspector General within the U.S. Department of Health and Human Services reviewed 500 prior authorization and payment denials issued in 2019 by 15 of the largest Medicare Advantage plan providers.
The review found that 13% of the requests for prior authorization and 18% of the requests for payment that were denied did meet the Medicare program’s coverage rules.
If these requests had been submitted through Original Medicare, rather than Medicare Advantage, they likely would have been approved, according to the Office of Inspector General.
Medicare Advantage versus Original Medicare
Medicare Advantage is one of two main types of Medicare. Also known as Medicare Part C, it allows private insurance companies to provide Medicare coverage.
The other option is Original Medicare, which is sometimes called traditional Medicare. With Original Medicare, coverage is offered directly by the government.
Many people choose Medicare Advantage plans because they offer additional services beyond what is covered by Original Medicare. However, Medicare Advantage plans are required to cover all services that are covered under the traditional Medicare program.
Medicare Advantage denials can delay treatment
When a Medicare Advantage plan unnecessarily denies a prior authorization or payment request, the Inspector General says it can have the following effects:
- Delay or prevent patients from accessing needed health care.
- Cause patients to pay out of pocket for services.
- Create an administrative burden for both patients and health care providers.
Of the denied requests reviewed by the OIG, 3% of those for prior authorization and 6% of those for payment had been reversed — meaning patients appealed the denials and their insurance companies subsequently granted the requests.
However, even when a denial is reversed, there can still be negative effects for patients, particularly when the appeals process causes significant delays in access to health care.
The options for people with Medicare Advantage
As part of its report, the OIG recommended that the Centers for Medicare and Medicaid Services — which is part of the U.S. Department of Health and Human Services — issue new guidance and audit protocols to address denials of valid requests for prior authorization and payment.
The OIG also suggested that Medicare Advantage plan providers be directed to identify and address vulnerabilities within their systems that can lead to errors.
In the meantime, people with Medicare Advantage can use the next annual Medicare Advantage open enrollment period (which is always Jan. 1 through March 31) to evaluate their options and switch to a different Medicare Advantage plan if needed.
Alternatively, they can leave Medicare Advantage entirely and switch over to Original Medicare. However, this change has pitfalls, as we detail in “5 Medicare Mistakes to Avoid for a Healthy Retirement.”
You also can learn more about the Medicare Advantage appeals process on Medicare.gov, the federal government’s official Medicare website.