As Denials Climb, MACPAC Approves Recommendations for Managed Care Oversight 

McKnight’s Home Care | By Adam Healy

The Medicaid and CHIP Payment Advisory Commission on Friday approved seven recommendations to enhance congressional oversight of Medicaid managed care organizations as recent reports reveal startlingly high rates of prior authorization denials.

MACPAC’s recommendations aim to improve the prior authorization and appeals process by requiring MCOs to report relevant data to the Centers for Medicare & Medicaid Services. CMS would be required to release public reports on the data, as well as update regulations and create additional guidelines for MCOs’ use of prior authorization.

A recent investigation by the Office of the Inspector General found that 12.5% of prior authorization requests were denied by Medicaid MCOs, and about 2.7 million Medicaid beneficiaries were enrolled in MCOs with denial rates greater than 25%.

Thousands of prior authorization requests for elderly, chronically ill or disabled patients requiring home care were denied by MCOs, according to the report. 

“Few denials are appealed and little is known about the beneficiary experience,” Lesley Baseman, senior policy analyst at MACPAC, said during the Thursday meeting. “The appeals process is also challenging and burdensome for beneficiaries. Denial notices can be late in the mail and the content is often unclear, and beneficiaries encounter multiple barriers in accessing continuation of benefits.”

Part of the challenge, OIG’s investigation found, was that few guidelines for MCOs’ prior authorizations requests are currently in place.

States are not federally required to collect data on denials, continuation of benefits, or appeals outcomes, according to Baseman. Federal rules do not require states to assess clinical appropriateness of denials, she said, and they do not require that states publicly report information on denials and appeal outcomes.

OIG’s report also found that many MCOs employed staff who were not qualified to approve or deny requests, and most states lack safeguards to identify improper prior authorization denials.