October 17, 2018
The Office of the Inspector General (OIG) recently released a report regarding Medicare Advantage Organizations’ (MAOs) appeal overturn rates and repeated poor MAO performance in the denials area. The Centers for Medicare and Medicaid Services (CMS) agreed with the OIG’s recommendations to increase oversight of MAOs with high overturn rates or low appeal rates, to focus on long-standing issues found during CMS Program audits, and to increase transparency into these issues for beneficiaries making plan choices.
The ability of a Medicare Advantage member to appeal a MAO’s initial decision to deny provision or payment for a service or supply has been one of the most heavily scrutinized aspects of MAO operations. These appeal protocols are complex, require extensive case documentation and solid workflow systems, and for many plans, sizable amounts of human resources.
Additional complicating factors to the Medicare Appeals process include the fact that many MAOs delegate or extend their discretionary authority to third parties to make initial decisions about whether to provide or pay for a service. Once the request for an appeal enters the MAO it must be triaged, logged, tracked, researched, and responded to in accordance with CMS requirements.
While it should not be surprising that Medicare appeals have been a fertile source of repeated and long-standing CMS Program Audit findings, the OIG’s report offers data-driven insight into key areas of concern.
WHAT OIG DID
The OIG utilized data that MAOs submit to CMS related to key performance measures at each decision or control point in the process (e.g., the number of appeals received, the number of appeals overturned and upheld). CMS requires independent validation of these measures and utilizes this data to gauge plan performance and answer questions and perform analyses for other government agencies.
The OIG then gauged MAO performance by reviewing CMS’ annual Program Audit reports and CMS STARs bonus payment measures for plans with poor performance.
WHAT OIG FOUND
OIG examined 581 MAO contracts over the period of 2014-2016. During that period, MAOs processed 863,217 appeals for pre-service and payment denials. Although beneficiaries utilized the appeal process infrequently (1%), when they did, MAOs overturned 75% of those cases, with higher-level external entities overturning between 10% and 27%, depending on the entity, e.g., Independent Review Entity (IRE), Quality Improvement Organization (QIO), and Medicare Appeals Counsel (MAC).
OIG mentioned the fact that during 2015, CMS cited 56% of the audited contracts for inappropriate denials and 45% of the audited contracts for sending incomplete or confusing denial letters to beneficiaries. 
The examination of STAR’s quality bonus information revealed that these issues had little bearing on STAR ratings and in 2019 will not have any impact due to a methodological change.
These findings raise key concerns as to whether MAOs are denying services or payment for services that should not be and whether CMS oversight mechanisms are driving necessary change for repeated issues.
Ankura conducts mock CMS Program Audits, CMS Independent Validation Audits, Medicare Appeals process reviews, and data analytics and performance metrics dashboarding. We often find that MAOs do not take full advantage of their own data to fine-tune their level of oversight at process control points and processor levels. Three things that can be done in this area include:
1. TAKE CONTROL OF YOUR OWN DATA
CMS-required reports, Universe reports, higher-level appeal entity reports (e.g. IRE reports), and your own internal databases hold the answers to common operational issues. The key for compliance and operations leaders is in making full use of all underlying transactional data, which is often stored in disparate and difficult-to-use systems, such as a claims, workflow, or care-management system. Often the data related to the original decision and the underlying clinical rationale rest with an outside entity. MAOs should work with informatics departments and outside entities to assist them in developing a repository of readily usable data with necessary data elements.
2. UTILIZE DATA ANALYTICS TO MINE AND AUTOMATE MANUAL PROCESSES
Make use of large-scale data analytics of underlying data tables by obtaining the back-end or underlying data tables, which can contain a wealth of information at the processor level. These data sets can be turned into ongoing management reports and dashboards that depict controls and timeliness and accuracy rates at each process point.
Plans can also use underlying transactional data to understand key trends in processing of denial letter rationale that is often problematic due to the high degree of manual intervention and variability in use of template denial reasons. Data analysis of text fields can be utilized to understand core denial reasons, map them to clinical policies, and reduce the degree of variability by processor.
3. REFINE OPERATIONAL CONTROLS
Proper attention to items one and two should allow the MAO to be able to have the necessary management tools to refine its operational controls and use Key Performance Indicator Reports that are calibrated by each step in the process to pinpoint exactly where errors or process variability is occurring and reduce those errors. The use of a visual dashboard tool for Medicare appeals can help bring these statistical measures to life and ensure that audit outcomes are met.
CMS’ concurrence with the OIG Medicare Appeals report findings signals that increased oversight, including a potential for CMS to require MAOs to hire independent consultants to assist plans with long-standing operational issues, is on the horizon. Ankura has served in this role for many of the nation’s largest MAOs and can help your organization by performing mock CMS audits, independent validations, end-to-end process reviews, data analytics, and implementing key metrics dashboards. Contact us for more information on how we can help your organization.
 Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials, Office of the Inspector General OEI-09-16-00410, September 2018.
 Id at p. 5.
 Medicare Part C Plan Reporting Requirements Technical Specifications Document, Contract Year 2017, Jan. 1, 2017.
 Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials, Office of the Inspector General OEI-09-16-00410, September 2018, at p. 11.