Pharmacy benefit managers weren't the only ones on the hot seat in Congress this week.
The Senate's Permanent Subcommittee on Investigations put Medicare Advantage (MA) plans on notice Wednesday, demanding answers for claims denials. Chairman Richard Blumenthal, D-Connecticut, said in an opening statement during the hearing that the committee sent letters to the three largest MA plans—UnitedHealthcare, Humana and Aetna—seeking documentation on how they make decisions around claims denials.
Blumenthal said these coverage denials have become commonplace for many MA enrollees.
"These denials have become so routine that some patients can predict the day on which they will come," he said.
He added that "there is growing evidence" pointing to MA plans using artificial intelligence and data algorithms in making denials, rather than relying on feedback from physicians or other clinical experts. A recent investigation from Stat found that these tools are taking on an increasing role in coverage decisions, though there is limited oversight and transparency
Blumenthal said the Department of Health and Human Services Office of Inspector General (OIG) has also identified a "large number of cases" where MA insurers refused to authorize services that met coverage requirements under Medicare. For example, a cancer patient seeking a routine scan to determine whether the disease had spread was held up by their insurer for a month, and another payer refused to cover a walker for a patient as they had already received a cane.
"In each of these cases, the insurer's decision overlooked the treating physician's assessment of what their patient needed," Blumenthal said.
There were no insurers represented on the hearing panel, and the senators instead heard from multiple policy experts, OIG and the widow of a patient who was harmed by care denials and delays. Megan Tinker, chief of staff at OIG, said in her submitted statement that in 2018, MA plans denied 1.5 million prior authorization requests, about 5% of the total. In addition, they rejected 56.2 million payment requests, or 9.5%.
Tinker said that between 2014 and 2016, MA plans overturned their own coverage denials 75% of the time when a member or provider appealed the decision. OIG also found that 13% of coverage denials were for services that met Medicare's coverage rules.
Tinker noted in her opening remarks that the program has grown rapidly over the past several years, and enrollment in MA now accounts for more than 50% of total Medicare enrollment.
"Fast growth has increased vulnerabilities and the need for robust program integrity measures," she said. "OIG work has demonstrated that the risk of waste, fraud and abuse in managed care are significant."
Jean Fuglesten Biniek, Ph.D., associate director of the Program on Medicare Policy at KFF, noted in her submitted remarks that the way payments work in MA may create financial incentives for insurers to deny care. It costs MA plans 83% of what it costs traditional Medicare to cover key services, while they are paid 106% of what the Centers for Medicare & Medicaid Services pays in fee-for-service Medicare, according to data from the Medicare Payment and Advisory Commission.
This means plans retain $2,300 above the cost of paying for a member's care, she said.
She added that there are also significant gaps in the data around prior authorization in MA; for example, there is no information about what services are denied or whether there are certain beneficiaries who are denied care more often. There is also a dearth of detail on how long it takes MA plans to respond to these requests.
"As a result, policymakers don't have the information they need to conduct oversight," she said.