AHA Asks for Investigation Into MA Organizations Over Prior Authorization Requests and Subsequent Denials

The American Hospital Association has asked the Department of Justice (DOJ) and Centers for Medicare & Medicaid Services (CMS) to look into commercial payers that routinely deny access to care and services. The group based their request on a recent report from the Department of Health and Human Services Office of Inspector General (HHS OIG) that found some Medicare Advantage (MA) plans have used prior authorization to deny care, in violation of Medicare rules.

Medicare Advantage Organizations (MAOs) are not permitted to impose additional clinical criteria that are “more restrictive than original Medicare’s national and local coverage policies.” However, in spite of that requirement, HHS OIG found that some of the largest MAOs in the country have been violating that at high rates. The report estimates that 13% of prior authorization denials and 18% of payment denials actually met Medicare coverage rules and should have been granted.

At the end of the report, HHS OIG made several recommendations to remedy the problem of improper denials, including issuing new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews, updating audit protocols to address issues found in the report, and directing MAOs to take steps to identify and address vulnerabilities that might lead to manual review errors and system errors. AHA notes that while it supports those “sensible” recommendations, “they are not enough” and also notes that HHS OIG identified similar problems with improper MAO denials in a September 2018 report and as of March 2022, CMS had not yet acted on all of the recommendations included in that report. CMS did concur with all three of HHS OIG’s recommendations in the May 2022 report.

The Department of Justice

In the letter to the DOJ, AHA “urges” the establishment of a task force to conduct False Claims Act investigations into commercial health insurance companies that are found to routinely deny patient access to services, and deny payments to health care providers.

AHA notes that, seemingly in part due to the lack of action on CMS’ behalf in response to the September 2018 report, “it is time for the Department of Justice 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.”

AHA goes on to note that “the problem has grown so large – and has lasted for so long – that only the prospect of civil and criminal penalties can adequately prevent the widespread fraud certain MAOs are perpetrating against sick and elderly patients across the country.”

AHA reminded Brian M. Boynton, the Acting Assistant Attorney General, Civil Division at DOJ – to whom the letter was addressed – that he had previously given remarks at the Federal Bar Association’s Annual Conference in early 2021, in which he highlighted some of the Civil Division’s False Claims Act priorities, including “schemes that take advantage of elderly patients by providing them poor or unnecessary health care – or too often no care at all.”

The DOJ has not yet commented on whether it will take up AHA’s request.

Centers for Medicare and Medicaid Services

In the letter to Chiquita Brooks-LaSure, CMS Administrator, AHA “urges CMS to take swift action to hold Medicare Advantage (MA) plans accountable for inappropriately and illegally restricting beneficiary access to medically necessary care.”

AHA notes that the disparities between traditional Medicare and the MA program also results in a “critical equity issue” as a little more than half of Medicare beneficiaries are not subject to the types of restrictions on access to care faced by beneficiaries enrolled in the MA program.  AHA believes that “those enrolled in MA plans should not be unfairly subjected to more restrictive rules and requirements, which are unlawful and contrary to the intent of the MA program.”

Through the CMS letter, AHA points to specific issues and concerns regarding “egregious MA plan policies” and provides specific recommendations that the association believes would hold MA plans accountable for complying with the law and protecting beneficiaries from harm. AHA finally requested an opportunity to meet with Administrator Brooks-LaSure to discuss challenges that hospitals and health care systems face in caring for patients enrolled in the MA program.