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OIG: Medicare Advantage Plans Are Stiffing Physicians on Reimbursement

New report shows a fair portion of prior authorization and physician reimbursement request denials actually met Medicare coverage rules.

Medicare Advantage plans are denying patients access to and physicians reimbursement for medically necessary services that meet Medicare coverage rules, according to a new U.S. Department of Health and Human Services Office of Inspector General (OIG) report. Of the prior authorization request denials reviewed, 13 percent met Medicare coverage rules, as did 18 percent of the physician reimbursement requests denied. Advanced imaging services, such as MRIs and stays in post-acute care facilities, were among the types of medical services wrongfully denied, according to the report. Cited reasons for the wrongful denials:

  • Use of clinical criteria not contained in Medicare coverage rules;
  • Requesting unnecessary documentation; and
  • Genuine error.

Medicare Advantage is a capitated payment model in which providers are paid a fixed amount per beneficiary, thereby creating a potential incentive for Medicare Advantage Organizations to deny access to services and payment in an attempt to increase profits.