OIG Targets Medicare Advantage Denials – Will Anything Change?

Today I have three OIG reports to discuss but first an update on the WISeR program.

Once again, it appears Congress is not happy with CMS’ program to pay AI companies to use their tools to review prior authorizations for a select list of services and have added an amendment to the budget bill that would cease all funding for the program. To quote a letter from members of Congress to the House Appropriations Committee, “It is also troubling that WISeR contractors, those actually doing the prior authorization, are compensated via a percentage of the dollar value of the services they deny. This payment mechanism clearly creates a perverse incentive to deny care, putting traditional Medicare beneficiaries at greater risk of not receiving needed care. Prior authorization has long been abused. It is bad for patients and providers.”

Now to the OIG reports (found here and here). Last week they released two reports looking at prior authorization denials by Medicare Advantage plans for care at skilled nursing facilities, inpatient rehabilitation facilities, and long term acute care hospitals. And as you could probably guess, MA plans denied a lot of SNF requests. Looking at June 2024, 12% of all requests were denied. But even more shocking is that if the denial was appealed, 95% of the time the denial was overturned. That includes a 99.7% overturn rate for UHC’s 1,025 SNF denials.

And the numbers are no better for IRF or LTACH with 65% of LTCH requests denied and 54% of IRF requests denied. And appeals were also commonly overturned with 36% of LTCH denials overturned and 43% of IRF denials overturned. And for all three types, it took an average of 5 days for an appeal to be reviewed, with CMS noting that “unnecessary or avoidable days spent in a hospital can mean a significant financial cost to hospitals that is not separately reimbursable. Delayed discharges can also negatively affect patients’ psychological and social well-being and contribute to feelings of uncertainty and stress about their recovery and prognosis.”

The OIG made several recommendations to CMS to address these starling findings, but will anything change? Only time will tell.

And the third OIG report was the first hospital review we have seen in a while and Lehigh Valley Hospital in Pennsylvania was the lucky recipient. And as usual, the OIG zeroed in on short inpatient admissions, finding an error rate of 42%. And I always hope that the OIG will give us worthwhile information on the denied cases so we can better understand their interpretation of the two midnight rule but once again I was disappointed. They gave details of one denied admission which was a patient admitted for left hip and lower back pain with impaired ambulation. The enrollee was treated and evaluated by a physician, then was discharged after assessment by an occupational therapist. While we have no other case details, that seems like a pretty weak inpatient admission.

But the cases that Lehigh Valley presented in their rebuttal letter as admissions that should have been approved seemed to meet the case-by-case exception. For me, it once again calls into question the ability of the OIG contractor to properly interpret the rule and apply that exception. And because of that, I will continue to advocate for an explicit statement from the physician that the patient’s high risk or high severity or complexity warrants inpatient admission rather than simply listing the risk or severity factors.

As I discussed last week, we shouldn’t have to alter our behaviors to meet the inappropriate actions of others, but it may just be a reality of our system to have to do so.