The United States Senate Permanent Subcommittee on Investigations recently released a report focused on Medicare Advantage Insurers’ denials of patients to access post-acute care. The report criticizes the three largest Medicare Advantage (MA) insurers in the United States – UnitedHealthcare, Humana, and CVS – for allegedly limiting patients’ access to post-acute care, in an attempt to maximize their own profits.
According to the report, the three insurers used algorithms to increase claims denials for MA beneficiaries from 2019 to 2022, most often denying coverage to patients in nursing homes, inpatient rehabilitation hospitals, and long-term hospitals. Prior authorization comes under fire in the report, with the report alleging that the MA insurers “are intentionally using prior authorization to boost profits by targeting costly yet critical stays in post-acute care facilities.”
The report found that during the relevant time frame, the three insurers denied prior authorization requests for post-acute care “at far higher rates than they did for other types of care, resulting in diminished access to post-acute care for Medicare Advantage beneficiaries.” During that time frame, UnitedHealth’s post-acute service denial rate increased from 10.9% in 2020 to 16.3% in 2021 to 22.7% in 2022. The insurer’s skilled nursing home denial rate increased by nine times during that same time. The report states that these increases coincide with the use of nH Predict, an algorithmic tool that UnitedHealth used to allegedly manage their claim denials.
Interestingly, nH Predict is the focus of a 2023 lawsuit that alleged UnitedHealth wrongly relied on the algorithm to resolve MA claims, despite knowledge that the software was full of errors. UnitedHealth has said the lawsuit has no merit.
CVS started a “Post-Acute Analytics” project in 2021, using artificial intelligence to reduce the money spent on skilled nursing facilities. The report states that the project was a financial success, with CVS expecting $4 million in annual savings, but within seven months of starting the program, projected a $77.3 million savings over the next three years.
Humana’s denial rate for long-term acute-care hospitals also increased between 2020 and 2022, by 54%, after training sessions about prior authorization requests for post-acute services. The trainings allegedly included tips on how to justify denials when speaking to health care providers.
The report concludes by recommending the CMS should collect prior authorization information broken down by service category, which would allow regulators to see whether certain kinds of care are being singled out for denials. The Senate subcommittee then recommended that the Centers for Medicare and Medicaid Services (CMS) perform a targeted audit of the insurers’ prior authorization data. The report notes that while CMS has performed annual audits of MA insurers, the audits have found “widespread and persistent problems related to inappropriate denials of services,” but have “failed to curb the issues documented in this report.” Therefore, once CMS is able to collect prior authorization data by services category, it will be able to determine whether an insurer saw a significant increase in denial rates for particular service categories, which may “signal that insurers are failing to comply with coverage requirements and should prompt additional scrutiny from CMS’s Division of Audit Operations.”
The subcommittee further recommended regulators to consider expanding regulations that govern predictive technologies, to ensure workers are not bound by AI recommendations when making their final claims decisions.