Hospital Group Says Payers are Inappropriately Denying Care and Payments

The American Hospital Association has sent a letter to the U.S. Department of Justice asking for the establishment of a task force to investigate commercial health insurance companies in the Medicare Advantage program that it alleges are routinely denying patients access to service and denying payments to health care providers.

AHA points to the HHS report that found a random sample of denials from one week in 2019 with a denial rate 13% higher for prior authorizations and 18% of payment denials for services that met Medicare criteria and should not have been denied as a basis for additional investigations.

Medicare Advantage is designed to cover the same services as original Medicare, and by law, Medicare Advantage Organizations may not impose additional clinical criteria that are more restrictive than original Medicare’s national and local coverage policies.

“In a program the size of Medicare Advantage — with 26.4 million beneficiaries, or 42% of the total Medicare population in 2021 — improper denials at this rate is unacceptable,” the letter reads in part. “Yet, as the report explained, because the government pays MAOs a roughly $1,000 per-beneficiary capitation rate, they have every incentive to deny services to patients or payments to providers in order to boost their own profits.”

The AHA also points to the several disturbing examples of patient suffering due to payer denials in the HHS report as reason enough to start a larger investigation.

“These harmful denials all occurred in a single week. Imagine what else the Justice Department might find if it conducted a more far-reaching investigation?” the letter states. “It is time for the Department of Justice to exercise its False Claims Act authority to both punish those MAOs that have denied Medicare beneficiaries and their providers their rightful coverage and to deter future misdeeds.”

The AHA says the problem is so entrenched in the system that only the fear of civil and criminal penalties can prevent fraud and protect patients. The letter, addressed to Brian M. Boynton, acting assistant attorney general, attempt to hold him accountable to remarks he made in 2021, when he said one of his priorities would be “schemes that take advantage of elderly patients by providing them poor or unnecessary health care – or too often no care at all.”

“Seniors are being regularly refused vital medical services, and the Department is well-equipped to use its sophisticated anti-fraud tools to go after this persistent misconduct by certain MAOs,” the letter reads. “As the HHS-OIG report makes crystal clear, a more sustained Justice Department commitment is needed to fully tackle this problem. And it is time for the Civil Division to focus more directly on the commercial insurers who commit this fraud.”

The AHA represents almost 5,000 hospitals and health systems, with more than 270,000 affiliated physicians.

This article was originally published on Medical Economics®.