The Department of Health and Human Services’ Office of Inspector General is investigating whether Medicare Advantage plans are improperly denying necessary post-acute care by using prior authorization.
The Office of Inspector General (OIG) within the Department of Health and Human Services issued a statement declaring an investigative effort into Medicare Advantage Organizations (MAO) past rejections of post-acute care authorization following qualified hospital stays. The investigation is due to work done by the OIG, which revealed instances where MAOs rejected requests for prior authorization of post-acute care following an eligible hospital stay, despite complying with Medicare coverage regulations. The OIG aims to release its findings in 2026.
In their statement, the OIG said that “Medicare Advantage plans must cover at least the same services as original Medicare, but Medicare Advantage Organizations (MAOs) may impose additional administrative requirements, such as requiring prior authorization before certain services can be provided.” To determine the extent of these rejections, the OIG said they will “examine selected MAOs' processes for reviewing prior authorization requests for post-acute care in long-term acute care hospitals, inpatient rehabilitation facilities, and skilled nursing facilities. We will also review the extent to which the selected MAOs denied requests for post-acute care and examine the care settings to which patients were discharged from the hospital.”
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Medicare Advantage plans, also known as Medicare Part C, are health insurance plans offered by private companies that contract with Medicare to provide Part A (hospital insurance) and Part B (medical insurance) benefits. These plans often include additional benefits such as prescription drug coverage, dental, vision, and wellness programs. Unlike traditional Medicare, Medicare Advantage plans may have network restrictions, requiring members to use healthcare providers within the plan's network. They also typically require prior authorization for certain services to manage costs and ensure appropriate care.
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The investigation into Medicare Advantage Organizations' (MAOs) use of prior authorization for post-acute care may address concerns about potential barriers to necessary medical services for patients. This inquiry matters as it seeks to ensure that MAOs are not improperly denying care that Medicare beneficiaries are entitled to, thus safeguarding patient health and compliance with Medicare standards.
The investigation could reveal how frequently and why MAOs deny prior authorization requests, the impact of these denials on patient outcomes, and whether there are inconsistencies in how different MAOs handle these requests. Additionally, it may uncover if patients are being directed to less appropriate care settings due to these denials, highlighting the need for policy reforms to protect patient access to essential post-acute care services.
Prior authorization is a process used by health insurance companies to determine coverage for certain services, ensuring they are medically necessary and appropriate based on established criteria. It helps manage healthcare costs by reducing unnecessary treatments, but can also delay patient care and impose administrative burdens.
Prior authorization denials can delay or prevent beneficiaries from receiving necessary post-acute care, potentially leading to worsened health outcomes, prolonged recovery times, and increased hospital readmissions.
Depending on the findings, the investigation could lead to policy changes and regulatory reforms aimed at improving the prior authorization process, ensuring it is used appropriately, and does not hinder patient access to necessary care.