U.S. Sen. Ron Wyden (D-OR) and U.S. Rep. Frank Pallone, Jr. (D-NJ) announced Tuesday they were launching an investigation into where Medicaid Managed Care Organizations (MCOs) are improperly using prior authorization to deny care to patients.
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In a series of letters to the largest MCOs across the country, Wyden, Senate Finance Committee Chair, and Pallone, House Energy and Commerce Committee Ranking Member, asked for answers after a report from the U.S. Department of Health and Human Services (HHS) found that numerous MCOs had high rates of denial for health services. Over 70 million Americans are enrolled in Medicaid MCOs.
“While plans may use prior authorization as a means to manage care, this report raises serious questions about whether plans are improperly using prior authorization to deny care,” the Congressmen wrote. “This alarming trend cuts across a range of parent companies and makes clear that this is a system-wide problem in need of attention. Building on this report, we are writing to request additional information regarding your use of prior authorization in Medicaid managed care.”
In the report, the HHS Inspector General found that MCOs denied 12.5 percent of prior authorization requests – more than double the rate in Medicaid Advantage denials. Over 75 percent of Medicaid beneficiaries are enrolled in plans operated by an MCO. States pay MCOs per member per month to cover the expected costs of care for each enrolled beneficiary. The Congressmen said they were concerned this payment method may be creating a financial incentive for MCOs to increase profits by denying requests for care.
“These findings raise serious concerns that Medicaid MCOs are systematically and improperly denying necessary care which they are required by law to provide,” the Congressmen wrote. “Low-income children and families, seniors, and people with disabilities rely on these plans for access to critical health care services, and prior authorization denials prevent them from receiving these services, which can lead to worse health outcomes.”