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Coverage Denials: Government And Private Insurer Policies For Medical Necessity In Medicare.

ABSTRACT: Little is publicly known about coverage denials for medical services that do not meet medical necessity criteria. We characterized the extent of these denials and their key features, using Medicare Advantage claims for a large insurer from the period 2014-19. In this setting, claims could be denied because of traditional Medicare's coverage rules or additional Medicare Advantage private insurer rules. We observed $416 million in denied spending, with 0.81 denials and $60 of denied spending per beneficiary annually. We found that 1.40 percent of services were denied and 0.68 percent of total spending was denied, with rates rising over time. Traditional Medicare's coverage rules accounted for 85 percent of denied services and 64 percent of denied spending; the remaining denials were due to additional Medicare Advantage insurer rules. Denial rates varied greatly across service type and provider type, with the most denials being for laboratory services and hospital outpatient providers. Traditional Medicare and Medicare Advantage insurer coverage policies each addressed different sources of medical spending; together they contributed to the denial of a modest but nontrivial portion of payments.

SUBMITTER: Schwartz AL

PROVIDER: S-EPMC9465897 | biostudies-literature | 2022 Jan

REPOSITORIES: biostudies-literature

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Coverage Denials: Government And Private Insurer Policies For Medical Necessity In Medicare.

Schwartz Aaron L AL Chen Yujun Y Jagmin Chris L CL Verbrugge Dorothea J DJ Brennan Troyen A TA Groeneveld Peter W PW Newhouse Joseph P JP

Health affairs (Project Hope) 20220101 1

Little is publicly known about coverage denials for medical services that do not meet medical necessity criteria. We characterized the extent of these denials and their key features, using Medicare Advantage claims for a large insurer from the period 2014-19. In this setting, claims could be denied because of traditional Medicare's coverage rules or additional Medicare Advantage private insurer rules. We observed $416 million in denied spending, with 0.81 denials and $60 of denied spending per b ...[more]

PMID: 34982629

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Project description:ImportanceHealth insurers use prior authorization to evaluate the medical necessity of planned medical services. Data challenges have precluded measuring the frequency with which medical services can require prior authorization, the spending on these services, the types of services and clinician specialties affected, and differences in the scope of prior authorization policies between government-administered and privately administered insurance.ObjectivesTo measure the extent of prior authorization requirements for medical services and to describe the services and clinician specialties affected by them using novel data on private insurer coverage policies.Design setting and participantsFee-for-service Medicare claims from 2017 were analyzed for beneficiaries in Medicare Part B, which lacks prior authorization. We measured the use of services that would have been subject to prior authorization according to the coverage rules of a large Medicare Advantage insurer and calculated the associated spending. We report the rates of these services for 14 clinical categories and 27 clinician specialties.Main outcomes and measuresAnnual count per beneficiary and associated spending for 1151 services requiring prior authorization by the Medicare Advantage insurer; likelihood of providing 1 or more such service per year, by clinician specialty.ResultsOf 6 497 534 beneficiaries (mean [SD] age, 72.1 [12.1] years), 41% received at least 1 service per year that would have been subject to prior authorization under Medicare Advantage prior authorization requirements. The mean (SD) number of services per beneficiary per year was 2.2 (8.9) (95% CI, 2.17-2.18), corresponding to a mean (SD) of $1661 ($8900) in spending per beneficiary per year (95% CI, $1654-$1668), or 25% of total annual Part B spending. Part B drugs constituted 58% of the associated spending, mostly accounted for by hematology or oncology drugs. Radiology was the largest source of nondrug spending (16%), followed by musculoskeletal services (9%). Physician specialties varied widely in rates of services that required prior authorization, with highest rates among radiation oncologists (97%), cardiologists (93%), and radiologists (91%) and lowest rates among pathologists (2%) and psychiatrists (4%).Conclusions and relevanceIn this cross-sectional study, a large portion of fee-for-service Medicare Part B spending would have been subject to prior authorization under private insurance coverage policies. Prior authorization requirements for Part B drugs have been an important source of difference in coverage policy between government-administered and privately administered Medicare.

Project description:BackgroundCirculating tumor DNA (ctDNA) is used to select initial targeted therapy, identify mechanisms of therapeutic resistance, and measure minimal residual disease (MRD) after treatment. Our objective was to review private and Medicare coverage policies for ctDNA testing.MethodsPolicy Reporter was used to identify coverage policies (as of February 2022) from private payers and Medicare Local Coverage Determinations (LCDs) for ctDNA tests. We abstracted data regarding policy existence, ctDNA test coverage, cancer types covered, and clinical indications. Descriptive analyses were performed by payer, clinical indication, and cancer type.ResultsA total of 71 of 1,066 total policies met study inclusion criteria, of which 57 were private policies and 14 were Medicare LCDs; 70% of private policies and 100% of Medicare LCDs covered at least one indication. Among 57 private policies, 89% specified a policy for at least 1 clinical indication, with coverage for ctDNA for initial treatment selection most common (69%). Of 40 policies addressing progression, coverage was provided 28% of the time, and of 20 policies addressing MRD, coverage was provided 65% of the time. Non-small cell lung cancer (NSCLC) was the cancer type most frequently covered for initial treatment (47%) and progression (60%). Among policies with ctDNA coverage, coverage was restricted to patients without available tissue or in whom biopsy was contraindicated in 91% of policies. MRD was commonly covered for hematologic malignancies (30%) and NSCLC (25%). Of the 14 Medicare LCD policies, 64% provided coverage for initial treatment selection and progression, and 36% for MRD.ConclusionsSome private payers and Medicare LCDs provide coverage for ctDNA testing. Private payers frequently cover testing for initial treatment, especially for NSCLC, when tissue is insufficient or biopsy is contraindicated. Coverage remains variable across payers, clinical indications, and cancer types despite inclusion in clinical guidelines, which could impact delivery of effective cancer care.

Project description:ImportanceAs private equity (PE) acquisitions of short-term acute care hospitals (ACHs) continue, their impact on the care of medically vulnerable older adults remains largely unexplored.ObjectiveTo investigate the association between PE acquisition of ACHs and access to care, patient outcomes, and spending among Medicare beneficiaries hospitalized with acute medical conditions.Design, setting, and participantsThis cross-sectional study used a generalized difference-in-differences approach to compare 21 091 222 patients admitted to PE-acquired vs non-PE-acquired short-term ACHs between January 1, 2001, and December 31, 2018, at least 3 years before to 3 years after PE acquisition. The analysis was conducted between December 28, 2020, and February 1, 2022. Differences were estimated using both facility and hospital service area fixed effects. To assess the robustness of findings, regressions were reestimated after including fixed effects of patient county of origin to account for geographic differences in underlying health risks. Two subset analyses were also conducted: (1) an analysis including only hospitals in hospital referral regions with at least 1 PE acquisition and (2) an analysis stratified by participation in the Hospital Corporation of America 2006 acquisition. The study included Medicare beneficiaries 66 years and older who were hospitalized with 1 of 5 acute medical conditions: acute myocardial infarction (AMI), acute stroke, chronic obstructive pulmonary disease exacerbation, congestive heart failure exacerbation, and pneumonia.ExposuresAcquisition of hospitals by PE firms.Main outcomes and measuresComorbidity burden (measured by Elixhauser comorbidity score), hospital length of stay, in-hospital mortality, 30-day mortality, 30-day readmission, and 30-day episode payments.ResultsAmong 21 091 222 total Medicare beneficiaries admitted to ACHs between 2001 and 2018, 20 431 486 patients received care at non-PE-acquired hospitals, and 659 736 received care at PE-acquired hospitals. Across all admissions, the mean (SD) age was 79.45 (7.95) years; 11 727 439 patients (55.6%) were male, and 4 550 012 patients (21.6%) had dual insurance; 2 996 560 (14.2%) patients were members of racial or ethnic minority groups, including 2 085 128 [9.9%] Black and 371 648 [1.8%] Hispanic; 18 094 662 patients (85.8%) were White. Overall, 3 083 760 patients (14.6%) were hospitalized with AMI, 2 835 777 (13.4%) with acute stroke, 3 674 477 (17.4%) with chronic obstructive pulmonary disease exacerbation, 5 868 034 (27.8%) with congestive heart failure exacerbation, and 5 629 174 (26.7%) with pneumonia. Comorbidity burden decreased slightly among patients admitted with acute stroke (difference, -0.04 SDs; 95% CI, -0.004 to -0.07 SDs) at acquired hospitals compared with nonacquired hospitals but was unchanged across the other 4 conditions. Among patients with AMI, a greater decrease in in-hospital mortality was observed in PE-acquired hospitals compared with non-PE-acquired hospitals (difference, -1.14 percentage points, 95% CI, -1.86 to -0.42 percentage points). In addition, a greater decrease in 30-day mortality (difference, -1.41 percentage points; 95% CI, -2.26 to -0.56 percentage points) was found at acquired vs nonacquired hospitals. However, 30-day spending and readmission rates remained unchanged across all conditions. The extent and directionality of estimates were preserved across all robustness assessments and subset analyses.Conclusions and relevanceIn this cross-sectional study using a difference-in-differences approach, PE acquisition had no substantial association with the patient-level outcomes examined, although it was associated with a moderate improvement in mortality among Medicare beneficiaries hospitalized with AMI.

Dataset Information

Coverage Denials: Government And Private Insurer Policies For Medical Necessity In Medicare.

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Coverage Denials: Government And Private Insurer Policies For Medical Necessity In Medicare.

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