With denials on the rise, some long-term care providers are questioning the worth of admitting residents covered by managed care plans because they doubt they’ll be reimbursed for their services.
“The reality is, when LTC providers admit managed care beneficiaries, they run the risk of not receiving reimbursement for care already provided,” Maureen McCarthy, founder, president and CEO of post-acute care advisory firm Celtic Consulting, wrote in a recent blog post.
A federal report released in late April found that Medicare Advantage organizations have often improperly denied or delayed services to beneficiaries to increase profits — even though payment requests met Medicare coverage rules. The investigation also found 13% of prior authorization requests that MA plans denied met Medicare coverage rules.
The findings spurred an immediate call for change from stakeholders and providers who have struggled to admit some residents due the issue in recent years.
McCarthy argued that the denial and appeal system is “convenient” for managed care insurers since they act as both “judge and jury” since providers are required to appeal denied services directly with the insurer. She added that there’s no option for the cases to be reviewed by an independent party after the appeals process is exhausted.
“With the recent uptick in enrolled beneficiaries, managed care insurers seem to have gained an upper hand, forcing providers to play by their rules,” she wrote, adding that it leaves providers to question the worth of admitting a managed care beneficiary.
Some providers have expanded their compliance and billing teams to appeal MA denials, adding to their operational costs for payments that are typically far below Fee for Service Medicare payments.
Research has already found that admissions discrimination among less profitable residents is “widespread” in nursing homes. Investigators have recommended that facilities admit residents on a first-come, first served basis and backed policy solutions like increased Medicaid reimbursement rates and expanding the capacity of high-quality facilities to help address the issue.
As of now, providers don’t have many “clear-cut answers,” McCarthy said. She encouraged providers to assess their contracts with insurers and their risk tolerance until “managed care insurers face further regulations.”