Medicaid Advisers Back New Protections for Patients Denied Care

Congress’s Medicaid advisers on Friday endorsed a series of steps policymakers could take to overhaul the appeal process for beneficiaries denied access to care by a managed care organization.

The proposals from the Medicaid and Chip Payment and Access Commission include allowing impartial third-party doctors to review claims in the event a claims appeal is denied by a managed care organization (MCO).

The move to protect Medicaid beneficiaries’ access to coverage comes after a July 2023 report from the Department of Health and Human Services Office of Inspector General found many MCOs had high rates of prior authorization denials, something the watchdogs said could have been mitigated with additional safeguards to protect patients, like external medical reviews.

The report found 115 managed care organizations in 37 states denied about one in eight requests for prior authorization. Twelve MCOs surveyed had denial rates above 25%.

The Congressional Budget Office estimates that implementing external medical reviews of MCO denials could cost the Medicaid program up to $500 million over the next 10 years.

Other recommendations from the commission include asking the Centers for Medicare & Medicaid Services to issue guidance advising MCOs to craft denial forms that can be received electronically or through the mail, are written in clear language, and contain information notifying patients of their right to continue receiving services while an appeal is pending.

To ensure the positive outcomes are being met, the commission also advised that states conduct a routine audit of denials and post all data relating to denials, continuation of benefits, and appeals outcomes online.

About 57 million Medicaid beneficiaries were covered by managed care organizations in 2020, with 44 million receiving coverage under the “Big Five” managed care companies—Molina Healthcare Inc., Centene Corp., Elevance Health Inc. (formerly Anthem), UnitedHealth Group Inc., and CVS Health Corp./Aetna, according to the Georgetown University Center for Children and Families.

Following Friday’s vote, the recommendations will be added to the commission’s 2024 Report to Congress, which will be released in March.