Recently, House Energy and Commerce Committee Ranking Member Frank Pallone and Senate Finance Committee Chair Ron Wyden sent letters to some of the largest Medicaid Managed Care Organizations (MCOs) to start a new investigation into reports of high rates of prior authorization denials for patients.
According to the report, MCOs denied an average of one out of every eight prior authorization requests for service (12.5%). This denial rate is more than double the 5.7% prior authorization denial rate in Medicare Advantage plans. While all states are required to offer hearings as an appeal option, the appeal process can be difficult for beneficiaries to navigate. Also, many state Medicaid agencies do not have a way for patients to submit denials to an external medical reviewer, independent of the plan.
Pallone and Wyden sent letters to Aetna, AmeriHealth Caritas, CareSource, Centene Corporation, Elevance, Molina Healthcare, and United Healthcare. The letters acknowledge that plans “may use prior authorization as a means to manage care,” but the Department of Health and Human Services Office of Inspector General (HHS OIG) report “raise[d] serious questions about whether plans are improperly using prior authorization to deny care.” The letter further noted that the “alarming trend” was represented across numerous parent companies, making it “clear that this is a system-wide problem in need of attention.”
The letter also notes that “Low-income children and families, seniors, and people with disabilities rely on these plans for access to critical health care services, and prior authorization denials prevent them from receiving these services, which can lead to worse health outcomes.”
Pallone and Wyden also recognize that the majority of Medicaid beneficiaries are enrolled in a comprehensive managed care plan operated by an MCO and states often pay MCOs a set amount per member, per month, to cover the expected costs of care for each enrolled beneficiary. They wondered whether that setup may be creating a financial incentive for MCOs to deny requests for care, and increase their own profits, saying, “it is critical that MCOs are not improperly denying access to care in an effort to maximize profits given that they are obligated by statute, regulation, and contracts with states to pay network providers for furnishing covered services to enrollees.”
The letters included several questions for the MCO providers, including questions regarding:
- Whether the company requires prior authorization for Early and Periodic Screening, Diagnostic and Treatment (EPSDT) services in any of its subsidiary health plans.
- Descriptions of all algorithms – including any machine learning or artificial intelligence algorithms – that the company uses in prior authorization decisions. The letter asks for this information to be broken down into approvals, partial denials, and full denials for the period of 2018 to 2022 and to include all information for any and all MCOs operated by the company within that time frame.
- Information on the rate of appeals by level and the outcome for Medicaid MCOs and for its Medicare Advantage products.