The Office of Inspector General (OIG) recently released a month-long study report that revealed Medicare Advantage plans denied 12% of requests for admission to a skilled nursing facility (SNF). 95% of those denials were overturned on appeal, which supports that the care was medically necessary.

The OIG report confirmed what SNF Providers have known for years, that patient care is delayed or denied by the Medicare Advantage Organizations (MAOs). The OIG noted that denials of prior authorization requests for post-acute care after a hospital stay were a particular area of concern. The report highlights new analyses of denial and overturn rates of requests for admission to SNFs, which provide short- term skilled nursing and /or therapy to help patients recover after hospitalization.

There was a total of 19 MAOs in the study that collectively denied 12% of requests for admission to a SNF. The denials were appealed 18% of the time. Of the 18% of denials that were appealed, the MAO overturned 95% of them. The study noted that such a high turnover rate indicates that members were denied care for medically necessary services, which raises concerns about the denials that weren’t appealed.

Another area of concern is the contractors, such as naviHealth, who processed half of the claims during the month-long study. Of the claims they processed, they denied 14% of them. MAOs later overturned 97% of those denials, raising questions of training and MAO oversight.

If the patient was already a nursing home resident, the MAOs denied them skilled-level care 40% of the time, a much higher rate than requests from all other enrollees.

OIG’s Recommendations

The OIG recommended that the Centers for Medicare & Medicaid Services (CMS) regularly collect prior authorization data that includes service type and contractor information. The OIG also recommended that CMS:

  1. Take action to address any breakdowns in the initial reviews of SNF admission requests that are driving the extremely high overturn rate of SNF admission denials,
  2. Assess reasons for variation in SNF denial rates across MAOs and contractors and take action as appropriate, and
  3. Assess reasons for the differences in SNF denial rates between nursing homes and non-nursing home residents and take action as warranted.

CMS did not explicitly concur or non-concur with the OIG recommendations.

Skilled nursing providers should see reform coming soon. In the meantime, post-acute care operators are encouraged to advise members to appeal denials.

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