The Justice Department needs to create a task force to study potential False Claims Act violations conducted by Medicare Advantage plans, according to the American Hospital Association.
The American Hospital Association (AHA) wants the federal government to launch a series of probes into commercial payers that routinely deny access to care and services.
The hospital group wrote (PDF) to the Department of Justice (DOJ) last week pressing for False Claims Act investigations after a recent report from a federal watchdog found some Medicare Advantage (MA) plans have used prior authorization to deny care in violation of Medicare coverage rules. The agency also pressed (PDF) the Centers for Medicare & Medicaid Services (CMS) to weigh in.
“This problem has grown so large—and has lasted for so long—that only the prospect of civil and criminal penalties can adequately prevent the widespread fraud certain [Medicare Advantage organizations] are perpetrating against sick and elderly patients across the country,” the letter said.
AHA was referring to a report from Department of Health and Human Services’ (HHS') Office of Inspector General (OIG) last month. OIG looked at a random sample of 250 prior authorization denials made by 15 major insurers back in 2019. It found that only 13% of the denials followed Medicare coverage requirements and so did only 18% of the payment denials.
OIG wanted CMS to deliver guidance on appropriate clinical criteria and to update audit protocols to flag errors.
The report is the latest in a long-standing feud between payers and providers over prior authorization, which requires providers to get permission from insurers to administer certain care or products.
The American Medical Association has charged that prior authorization has created major hurdles for physicians to deliver care and that there needs to be a streamlined and standardized process.
Insurers, on the other hand, have claimed that prior authorization is a necessary cost management tool, especially for curbing unnecessary treatments.
AHA said that the DOJ’s Civil Division needs to focus more “directly on commercial insurers who commit this fraud.” It called for a specific task force to probe the issue.
“The fraud uncovered by HHS-OIG fall squarely within your priorities: seniors are being regularly refused vital medical services, and the department is well-equipped to use its sophisticated anti-fraud tools to go after this persistent misconduct by certain [Medicare Advantage organizations],” the letter said.
The DOJ did not immediately return a request for comment on whether it aims to take up AHA’s request.
AHA sent a similar letter last week to CMS calling for action on improving the prior authorization process.
“The actual process of complying with [Medicare Advantage] plan processes is in dire need of reform,” the letter said.
AHA noted that physicians face a burdensome process in order to fulfill prior authorization requests, including submitting proper paperwork documenting the patient’s need and helping with appeals if the request is denied.
AHA called on the agency to work with Congress to pass legislation such as the Improving Seniors’ Timely Access to Care Act that would require the adoption of electronic prior authorization amid other reforms. Sponsors of the legislation in the House recently announced the legislation has enough co-sponsors to be fast-tracked through the chamber and quickly move over to the Senate.