'Bane of My Existence:' The Burden of Medicare Advantage Denials

Megan Brooks

May 10, 2022

Patients with cancer enrolled in Medicare Advantage Organizations (MAOs) may be denied needed care, leading to delays in treatment and administrative headaches for oncology practices, a recent analysis suggests.

The report from the Office of Inspector General (OIG) of the Department of Health & Human Services found that 13% of prior authorization denials were for service requests, which included cancer care, that met Medicare coverage rules and 18% of payment denials were for claims that met Medicare coverage and MAO billing rules, delaying or halting payments for services that clinicians had provided.

MAO denials are the "bane of my existence," said Michael Buckstein, MD, PhD, a radiation oncologist at Mount Sinai Hospital in New York City.

"Working at a large hospital in a metropolitan city, we spend enormous and increasing amounts of time on prior approvals and we get denials quite frequently, which certainly can lead to delays in treatment," said Buckstein who reviewed the OIG report for Medscape Medical News.

According to Buckstein, once a claim is denied, staff must spend time filing and scheduling an appeal, and if the appeal is denied in a physician peer-to-peer review, staff could face secondary and tertiary appeals. "We have been living with this frustration for a long time," Buckstein said.

Widespread and Persistent Problems

Medicare Advantage plans, which are approved by the Centers for Medicare & Medicaid Services (CMS) but run by private companies, continue to grow in popularity.

In 2021, 42% or 26.4 million Medicare beneficiaries were enrolled in a Medicare Advantage plan, and by 2030, about 51% of all Medicare beneficiaries will be enrolled, according to estimates from the Kaiser Family Foundation.

"Although MAOs approve the vast majority of prior authorization requests and provider payment requests, MAOs also deny millions of requests each year," the OIG writes. "CMS's annual audits of MAOs have highlighted widespread and persistent problems related to inappropriate denials of services and payment."

In the current report, the OIG reviewed case files for 247 denials of prior authorization requests and 183 payment denials issued by 15 of the largest MAOs during 1 week in June 2019. 

The authors found that 13% of prior authorization denials occurred for service requests that met Medicare coverage rules, meaning these services would likely have been approved had the patient been enrolled in traditional Medicare.

The most prominent service types among these denials included imaging services, stays in post-acute facilities, and injections.

In one case, for example, the MAO stated that a beneficiary would need to wait at least 1 year for a follow-up MRI because the size of the patient's adrenal lesion (< 2 cm) was too small to warrant follow-up before 1 year. However, this restriction is not included in Medicare coverage rules. And an OIG physician panel found that the documentation in the original request demonstrated that the MRI was medically necessary to determine whether the lesion seen on an earlier CT scan was malignant.

Upon appeal, the MAO reversed its original denial.

Among the payment requests that MAOs denied, almost one in five were for claims that met Medicare coverage and billing rules, which delayed or prevented payments for services already delivered. Most payment denials were caused by human error during manual claims-processing reviews and system processing errors, the OIG report found.

In one case, for example, a MAO denied payment for radiation treatment for a patient with a tumor on the pancreas, incorrectly claiming that no prior authorization had been submitted for the service. However, the physician subsequently provided a screenshot demonstrating that the MAO had granted prior authorization for the billed claim, and the MAO reversed the denial.

Most of these prior authorization denial reversals occurred because of an appeal filed by the beneficiary or their provider, which can take weeks.

In one case, a MAO denied a request for a CT scan of the chest and pelvis for a beneficiary with endometrial cancer. It took 5 weeks for the provider to get the denial reversed. The OIG panel determined that the original request included sufficient documentation to demonstrate the CT was needed to assess the stage of the cancer and determine the appropriate course of treatment.

These denials and reversals not only waste time but may also cause harm. In a 2021 American Medical Association survey, 34% of physicians reported that prior authorization led to a serious adverse event for a patient in their care, including hospitalization, medical intervention to prevent permanent impairment, and even disability or death.

Almost 90% of the physicians surveyed described the burden associated with prior authorizations as 'high' or 'extremely high.' More specifically, physicians and their staff spend nearly two days a week on prior authorizations and 40% of physicians have staff who work exclusively on prior authorizations.

"It's just not the way medicine should be practiced, especially for cancer patients who are very vulnerable and want rapid care," Buckstein said.

Time for Action

Weighing in on the OIG report, Robert E. Wailes, MD, president of the California Medical Association, noted that "it has become common practice for health insurance companies to create obstacles for patients in hopes of not having to pay for essential healthcare."

The reason for these obstacles is simple, he said: "Fewer procedures performed translates to larger insurance company profits."

America's Health Insurance Plans (AHIP) defended prior authorization, saying it is "an important patient safety, cost-saving, and waste-prevention tool."

The group also called out the OIG review for its "extraordinarily small" sample of 247 prior authorization requests over 1 week. 

"Drawing far-reaching conclusions based on a very small sample of data and misleading headlines is not a productive way to improve our healthcare system for patients," the AHIP statement reads.

But, according to Anna Schwamlein Howard, who works on policy development at the American Cancer Society Cancer Action Network, the recent OIG report is in-line with previous OIG reports.

And, Howard emphasized, the current report and others like it "highlight the need for CMS to utilize its audit authority and ensure that beneficiaries have access to medically necessary treatments, particularly cancer treatments."

Along those lines, the OIG report recommends CMS issues new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews, update its audit protocols to address issues identified in the report, and direct MAOs to take additional steps to identify and address vulnerabilities that can lead to manual review and system errors.

In a statement, CMS said it is committed to oversight and enforcement of the requirements of the Medicare Advantage program and agreed with the OIG recommendations.

"Lawmakers must act now to place patient needs before corporate profits and simplify by streamlining prior authorization processes," Wailes said.

The ACS recently released a paper on this topic entitled, "The Medicare Appeals Process: Reforms Needed to Ensure Beneficiary Access." 

Follow Medscape on Facebook, Twitter, Instagram, and YouTube.


Comments on Medscape are moderated and should be professional in tone and on topic. You must declare any conflicts of interest related to your comments and responses. Please see our Commenting Guide for further information. We reserve the right to remove posts at our sole discretion.