Medicare Advantage plans to undergo OIG review for inappropriate denials

The Office of Inspector General (OIG) plans to address concerns regarding capitated payment models by putting preauthorization denials under review.

In a recent update to its Work Plan, the OIG acknowledged that the capitated payment model used in Medicare Advantage might incentivize managed care plans to inappropriately deny preauthorization or payment for medically necessary services that are covered by Medicare. Medicare Advantage payments are based on the projected cost to care for a patient rather than payment per service provided. Managed care plans might attempt to keep costs down, and increase profits, by issuing denials.

The OIG plans to conduct medical record reviews to determine whether Medicare Advantage plans have denied payment for covered, medically necessary services. It will also attempt to determine what motivated inappropriate denials.