MA Plan Denials. Now What?

There are steps providers should take for holding managed care plans accountable.

Considerable effort is regularly devoted by healthcare providers to overcome coverage denials through the application of the governing rules, such as they can be leveraged. Following the rules is tough in a world where money talks, bringing us to the topic of Medicare Advantage (MA) plans. Medical necessity determinations are becoming more stringent. For those providers with busy EDs, the risk of non-payment for providing post-stabilization care is increasing.

First, we’ll focus on medical necessity.

The two largest nationally recognized standards, MCG and InterQual, were built with payers’ interests front and center – not for assisting hospitals in the efficient provision of individualized healthcare – and often not improperly applied by payer UM departments. If the nationally recognized standard fails, the insurer has internal standards that are binding without formal written notice.

Maybe it’s time to let the old ways live. (There’s a movie line for everything.) Promote physician documentation that lets the world know why a patient needs to be under professional care versus wrapped in their blanket chugging Nyquil while watching The View. In appeal responses, I now tend to bypass the insurer’s basis completely and focus on the patient’s actual condition. This approach carries far more weight if an appeal goes to a fair hearing, to Medicare, or to a state agency.

The most annoying type of technical denial is for alleged failure of timely notification and/or providing post-stabilization services without getting permission from a payer’s medical director, even when in-network. Payers increasingly want to bend admitting doctors to the will of their medical directors, lacking medical staff privileges, to avoid “unnecessary admissions,” or to divert an ED patient to an alternate level of care.

As payers expand geographic membership without expanding the provider network (deliberately left small to improve return on equity), the problem becomes more common for out-of-network hospitals.

As to the first issue, lines must be drawn, diplomatically, with the payer medical directors. Arguably, MA plan medical directors must have admitting privileges if they seek to make treatment decisions. Be prepared with specific examples of suboptimal outcomes that occur as a result of their involvement.

Support your physicians in their medical decision-making. Don’t neglect the legal liability component. If a patient suffers harm as the result of a payer directive, who are exposed to legal liability? You get three guesses; the first two don’t count.

For non-network providers, there are special Medicare rules governing MA behavior: § 422.214 Special rules for services furnished by noncontract providers, and the Medicare Managed Care Manual, Chapter 4, Benefits and Beneficiary Protections [63 FR 35085, June 26, 1998, as amended at 65 FR 40325, June 29, 2000; 70 FR 4724, Jan. 28, 2005; 70 FR 47490, Aug. 12, 2005; 76 FR 21564, Apr. 15, 2011].

To summarize, each party has well-defined responsibilities within tight timelines. The clear intent is to avoid an out-of-network hospital providing first-day hospital care without compensation and to protect patients from surprise bills. 

An out-of-network provider must notify the payer immediately upon the decision to admit. The payer has limited time to arrange repatriation. These include peer-to-peer consultation and arrangements made to execute the transfer, should the doctors agree that transfer is safe. There is only one defense: recordkeeping. Document all communication. 

If all timeliness requirements are met, yet the transfer delayed, the payer still may have to compensate the hospital for care provided, if traditional Medicare would pay. Yes, payers will try to dodge this as well, with a flourish. Fortunately, with a little recordkeeping, it’s a denial easily overcome. 

Each party has the right to hold the other accountable. So hold yourself and the payer accountable, and you can overcome technical denials.   

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