Medicare Advantage Organizations May Be Denying Claims to Increase Profits, Says OIG

Oct 12, 2018 New York, NY

By: Sherine Marder, Esq.

In a new report issued September 25, 2018, the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) examined the findings of audits conducted by the Centers for Medicare and Medicaid Services (CMS) concerning Medicare Advantage Organization (MAO) denials, appeals, and appealed denials that were overturned. As a result of these findings, the OIG concluded that MAOs may be improperly denying their members access to, and providers payment for, medically necessary services that should be covered in an effort to cut costs and increase profits.

In particular, the OIG revealed that, when beneficiaries and providers appealed denied claims from 2014 through 2016, MAOs were forced to overturn their own denials an astounding 75% of the time on the first of four levels of appeal. The total number of overturned denials is further increased at the higher levels of appeals, which are reviewed by an Independent Review Entity rather than the MAO that initially denied the claim. Most of the overturned denials represented payments to medical providers, with the remaining overturned denials representing preauthorization of services needed by beneficiaries in order to obtain medically necessary services. The OIG noted that this was particularly concerning in light of the fact that beneficiaries and providers rarely even utilized the appeals process; having appealed denied claims only 1% of the time. Of course, as the OIG expressed, the appeals process may be confusing and burdensome, especially for those facing serious medical conditions.

MAOs are private insurance companies that are approved by Medicare to cover Medicare benefits to beneficiaries. They are paid a fixed, or capitated, amount per beneficiary on a monthly basis in order to provide the beneficiary all Medicare health benefits. MAOs are required to cover Medicare services and make coverage determinations in a manner consistent with Medicare’s rules and regulations. See 42 CFR § 422.405. Given the capitated payment model, MAOs may be incentivized to improperly deny payment for claims in an attempt to increase profits.

The result of failing to appeal a denied claim may be that a beneficiary does not obtain a medically necessary service, or the beneficiary pays out of pocket for a medically necessary service that should be covered by their Medicare Advantage plan, or the provider is not paid for having rendered medically necessary services to the beneficiary. The OIG’s report serves to highlight the importance of taking advantage of the appeals process because it is one of the major safeguards against inappropriate denials.

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 225 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has maintained a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

MEDIA CONTACT

Natalie Villanueva, Director of Marketing
954.333.4308 | [email protected]

This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

Previous Next

News

Medicare Advantage Organizations May Be Denying Claims to Increase Profits, Says OIG

Share

News & Events

News & Events