18% of Claim Payment Denials by Medicare Advantage Plans Met Medicare Coverage Rules

A recent report by the U.S. Department of Health and Human Services Office of Inspector General determined that a significant number of denials actually met Medicare coverage rules. 13% of the sample denials of prior authorization requests and 18% of the sample of claim payment denials were determined to be covered by Original Medicare. Since Medicare Advantage plans are required to offer benefits that are equal to or better than Original Medicare, the report strongly recommends additional safe guards of beneficiaries’ access to necessary services be put in place.

Does That Mean Medicare Advantage Plans Are Bad?

Most of the major news outlets carried headlines about this report designed to catch your attention. You can fact check the articles for yourself by clicking the link above to the actual report. But just reading facts won’t necessarily help you figure out how to weigh this news when you’re deciding what Medicare plans to choose.

To help sort out useful from unhelpful facts, let’s start by putting the results into perspective. In reality, the vast majority of requests for prior authorizations and claim payments are approved [SEE page 2 sidebar in the report]. On the other hand, if your request is among those delayed or denied, there’s a pretty good chance that, according to the coverage rules of Original Medicare, you were denied services you deserved. Knowing that these denials may prevent or delay medically necessary care is definitely important when you’re deciding which Medicare insurance to pick. However, it doesn’t mean that Advantage plans are bad.

With Your Eyes Open

Just like anything else you might consider buying, Medicare Advantage plans have strengths and weaknesses. Knowing what you’re facing can help you make use of the strengths and manage the weakness. No matter how much celebrity endorsement is promoted in advertising, Advantage plans do not do it all. Although no additional premium is paid for most HMO and PPO plans, copays and coinsurance must be paid when you use the plan.

And, as the Inspector General’s report stresses, when you enroll in one of these plans, the private insurance Medicare Advantage Organizations (MAOs) take over the role of deciding what to approve and what to deny. They also have reason to push members toward the least expensive treatments and services. The motivation comes from the fixed monthly payments Medicare makes to the MAOs for each member in their Advantage plans. The MAOs get to keep more of those payments in their pockets if they spend less on their members’ health care. It’s not surprising that sometimes coverage decisions get clouded.

Next Steps:

If you are considering a Medicare Advantage plan for yourself or someone you care for, download our List of Denials. Learning the types of errors made during health service requests may strengthen your appeal of a denied service. But keep in mind, the vast majority of requests are APPROVED.

If your wondering which Medicare option fits you the best, make an appointment to talk with one of our experienced Medicare agents. You’ll get straight, balanced answers to help weed out choices that don’t make sense for your situation.