Private health insurance companies that Medicaid pays have turned down millions of applications for care for low-income Americans with little oversight from federal and state authorities, according to a new report by US investigators published Wednesday.
Medicaid, the federal health insurance program for the poor that covers approx 87 million Persons, contracts with companies to reimburse hospitals and doctors for treatment and administration of an individual’s medical care. About three-quarters of people enrolled in Medicaid receive health services through private companies, which are typically paid a flat amount per patient rather than per procedure or visit.
the a report by the Office of the Inspector General of the US Department of Health and Human Services detailing the number of times private insurance plans refused to consent to treatment and how states handled the denials.
Doctors and hospitals have increasingly complained about what they see as endless paperwork and unwarranted denial of care by insurance companies when they fail to authorize costly procedures or medications. Companies that require prior authorization for certain types of medical services say the tools are intended to curb unnecessary or unproven treatments, but doctors Claim It often interferes with making sure patients get the services they need.
Investigators have also raised concerns about a payment structure that provides lump sums to each patient. They were concerned that it would encourage some insurers to maximize their profits by denying medical care and access to services to the poor.
The report emphasized the critical role that state and federal officials must play in ensuring that deportations are justified. “People of color and low-income people are at increased risk of receiving lower-quality health care and experiencing poor health outcomes, making ensuring access to care especially critical for Medicaid residents,” the investigators said.
The report found that for-profit insurers including Aetna, Elibility Health, Molina Healthcare and UnitedHealthcare operate some Medicaid plans that denied Medicare under advance authorization for services applications at rates of more than 25% in 2019. About 2.7 million people were enrolled in those plans at the time. Another 8.4 million are enrolled in plans with above-average denial rates of 15 to 25 percent.
Molina, based in Long Beach, California, operates seven plans with denial rates of more than 25 percent, according to the report. Its plan in Illinois rejected 41 percent of the applications.
Christine Grow, a spokeswoman for AHIP, (formerly American Health Insurance Plans), an industry trade group, said in a statement that insurers are “held accountable through intense oversight” by the federal and state governments.
The companies mentioned in the inspector general’s report did not immediately respond to requests for comment.
Doctors agree that Medicaid patients shouldn’t wait for the insurance company to approve care, let alone reverse its decision. “You don’t always have the opportunity to see a patient, send an advance authorization request and schedule them again,” said Dr. Matthew Stinson, who works at the Jordan Valley Community Health Center in Springfield, Missouri, which sees a large number of Medicaid patients. “It’s an access problem.”
He said some of the clinic’s patients will skip care. When an insurance company refuses to perform an ultrasound for a pregnant woman, the center may decide to do the test anyway because she may not return. “We don’t necessarily get paid for that ultrasound,” Dr. Stinson said.
Concern about inappropriate denials is not limited to Medicaid. Last year, the same investigators examined denials among private Medicare Advantage plans and found that some of the care that was denied may, in fact, be medically necessary. While the current report did not look at whether Medicaid denials were valid, investigators confirmed that insurance companies were more aggressive in refusing to authorize care under Medicaid, the federal program for seniors and the disabled.
They said the companies denied one in eight applications in 2019, nearly double the rate under Medicare Advantage. Unlike Medicare, if an insurance company denies authorization for treatment, patients are not automatically provided with an outside medical opinion as part of their appeal. They are entitled to a state hearing.
“These differences in oversight and access to outpatient medical reviews between the two programs raise concerns about health equality and access to care for those enrolled in Medicare managed care,” the investigators said.
Patients also complain that it is difficult to obtain care under these plans. Bree Moss, 34, of Dubuque, Iowa, has been diagnosed with diabetes since she was 12, but has struggled to get her Medicaid plan to agree to a new doctor-recommended insulin pump to help control her blood sugar.
“It could be a game-changer for me,” Ms. Moss said, adding that her insurance company wouldn’t cover it initially. Working with People Action, a national advocacy network, and sister organization, Iowa Citizens for Community Improvement, where she is a member, Ms. Moss eventually won an appeal to cover the device.
Investigators also found that state oversight of coverage denials was lax. Many states do not routinely screen insurance company denials or collect information about how often a plan denies prior authorization requests. They don’t make sure that people can get a second medical opinion if they want to appeal. According to the report, the lack of a review makes it difficult for federal and state officials to know whether insurance companies are “fulfilling their obligations to ensure medically necessary health care coverage.”
“In the absence of federal requirements, we see that these three tools are used inconsistently,” said Rosemary Bartholomew, who helped lead the team that produced the report.
States are directly responsible for overseeing insurance providers for Medicaid coverage. But investigators have urged the federal Centers for Medicare and Medicaid Services to request more oversight.
In the report, federal officials did not say whether they agreed with the investigators’ recommendations, and CMS said it plans to review the report’s findings to determine any next steps.
The refusal rates recorded by the investigators varied widely by insurance company and by state. Investigators looked at 115 managed care institutions in 37 states run by the seven multi-state insurers with the highest Medicaid enrollment, representing about 30 million people in 2019. They asked for information about denials from insurers and surveyed states about their oversight role.
The for-profit insurer, formerly Anthem, had plans with denial rates ranging from 6 to 34 percent, while United Healthcare had plans ranging from 7 to 27 percent.
While refusing any individual prior authorization may be appropriate, the investigators said, it is unclear why some health care organizations’ or managed care organizations had pre-authorization refusal rates that were significantly higher than their peers.