A key Medicaid advisory body appears ready to recommend new appeal opportunities for millions of Managed Medicaid beneficiaries and to add more oversight to better ensure plans cover medically necessary care.

The Medicaid and CHIP Payment and Access Commission on Thursday considered seven draft recommendations that would bring transparency to the fast-growing Medicaid managed care program, which is jointly funded by states and the federal government. Medicaid is far and away the top funder of nursing home care in the US.

The series of changes is designed to give both patients and officials more visibility into the frequency of care and to improve how appeals are conducted. States have largely been left to police the insurers they contract with to run state-level plans, which typically cover long-term care and, increasingly home- and community-based care. Only 14 states publicly report denials, and available appeals processes can be hard for consumers to understand, MACPAC staff reported. 

Similar concerns have been raised about Medicare Advantage plans, particularly when it comes to plans denying seniors access to post-acute care. The Centers for Medicare & Medicaid Services has been ratcheting up its own oversight in the last two years. MACPAC’s potential recommendations would begin to bring similar, expanded appeals right to Medicaid beneficiaries and build in more audit power supported by the federal government. 

More than 66 million Americans were enrolled in Medicaid managed care plans at the end of 2021. The estimates for 2022 were closer to 75 million.

The draft recommendations call for:

  1. Congress to establish an independent, external medical review process for beneficiaries who have exhausted the internal managed care organization appeals process.
  2. CMS to issue guidance to improve the clarity and content of denial notices
  3. CMS to require managed care organizations to provide beneficiaries with the option of receiving an electronic denial notice, in addition to a mailed notice.
  4. CMS to extend the timeline for requesting continuation of benefits and promote better awareness of beneficiary rights to continue receiving services while an appeal is pending
  5. CMs to update regulations to require states to collect data on denials, beneficiary use of continuation of benefits, and appeal outcomes, and use that data to improve program performance
  6. Congress to require states conduct routine clinical appropriateness audits of managed care denials and use the findings to ensure access to medically necessary care. 
  7. CMS to publicly post all state managed care program annual reports in a timely format that enables analysis and to require states to include denials and appeals data on their quality rating system websites for consumers to consult when shopping for plans.

MACPAC members were generally supportive of the recommendation, which they expected to vote on Friday morning.

Not unanimous approval

But some commissioners differed over whether requiring the whole slate of changes at once might add too much confusion for consumers and too much cost for plans, states or the federal government. Recommendations 1 and 6 each carried a possible price tag of zero to $500 million over 10 years, though MACPAC staff clarified that that was a wide cost category defined by the Congressional Budget Office.

Commissioner Angelo P. Giardino, MD, PhD, embraced recommendations 5 through 7, saying their attempt to build transparency and create a “feedback loop” would make the Medicaid program better. He also supported 2 through 4 as important consumer protections. 

But he said policymakers don’t have enough insight yet into how often denials are being issued or overturned. One audit by the Office of the Inspector General put the overturn rate at 46%, but few consumers have been shown to even request appeals. Asking Congress to fund external reviews before knowing how necessary they are “may or may not be the right thing” because of the cost, he argued.

“A half a billion is a lot of money. It’s not a rounding error. It’s not pencil dust,” Giardino said. “We have to be careful about our relevance with these recommendations.”

He suggested the commission come back to the external review issue after reviewing data collected if Congress and CMS act on the rest of the draft recommendations.

Other commissioners felt there was no conflict in recommending both an external review, which would be patient-driven, and more audits, which would be government-led reviews of sample data to ensure full access to care.

“The individuals who are being served in Medicaid deserve that extra protection of an external review by a medical professional,” said Commissioner Rhonda M. Medows, MD. “A lot of times we get paralyzed with all the analysis. We wait too long to have perfect data, and I think there’s enough information already present.”

The commission will vote on each recommendation individually when its meeting reconvenes in Washington, DC, Friday.