The Office of Inspector General (OIG) is urging the feds and states to take on greater oversight of prior authorization denials in Medicaid managed care.
An OIG report released this week analyzed prior auth patterns across seven managed care companies with the largest number of people enrolled in comprehensive, risk-based plans across all states. These companies represented 29.8 million members in 2019 across 115 managed care organizations in 37 states.
OIG also conducted interviews with Medicaid officials across those 37 states, according to the report.
The analysis found that the included MCOs denied 1 in 8 prior authorization requests. Among the 115 MCOs in the study, 12 had a denial rate of more than 25%, according to the report.
However, these high denial rates were identified alongside a lack of state oversight into prior authorization behavior. Most state agencies said they "did not routinely review the appropriateness" of denials, and many did not gather data on prior authorization decisions.
"The absence of robust mechanisms for oversight of MCO decisions on prior authorization requests presents a limitation that can allow inappropriate denials to go undetected in Medicaid managed care," OIG said in the report.
While patients and providers do have the opportunity to appeal prior authorization denials, the analysis "identified several factors" that may make it hard to do so in Medicaid managed care. Most state agencies said they do not have a protocol that would allow patients and providers to submit appeals to an external review independent of the managed care plan.
State agencies are required to offer hearings as an appeal option, but these administrative reviews are likely to be burdensome to Medicaid patients, according to the report.
"We found that Medicaid enrollees appealed only a small portion of prior authorization denials to either their MCOs or to State fair hearings," OIG said.
OIG compared these protocols in Medicaid, which is largely administered by individual states, to Medicare Advantage, which is monitored more so by the Centers for Medicare & Medicaid Services (CMS). CMS has more "robust" oversight into prior auth in MA, and MA members have automatic access to external medical reviews of denials, according to OIG.
"These differences in oversight and access to external medical reviews between the two programs raise concerns about health equity and access to care for Medicaid managed care enrollees," OIG said.
The agency recommended that CMS require states to review the appropriateness of prior authorization denials in Medicaid managed care as well as mandate that they gather and monitor key prior auth data. CMS should also develop and release guidance to states about prior authorization oversight.
In addition, CMS should require states to implement automatic external medical reviews like those in MA and work with states to identify the companies that are issuing the most prior authorization denials.
CMS "did not indicate whether it concurred with the first four recommendations," OIG said, but did agree with the final one.