Health Plan Weekly

Medicaid managed care beneficiaries face “high rates of prior authorization denials” and “limited state oversight” of prior authorization, according to a notable new report from the HHS Office of Inspector General (OIG). Medicaid experts who reviewed the report say it demonstrates that Medicaid members and safety net providers may not be able to appeal denials for administrative reasons, and they add that states must do more to facilitate appeals to and prevent inappropriate denials by contracted plans. 

The OIG found, in a review of 2019 claims data from seven multistate carriers, that the studied MCOs “fully or partially denied approximately 2.2 million requests for the prior authorization of services,” amounting to one out of every eight requests, or 12.5% of all prior authorization requests. That rate was more than double the Medicare Advantage prior authorization denial rate of 5.7% in 2019, according to the OIG report published July 17. 

The federal government on July 25 issued proposals to strengthen the Mental Health Parity and Addiction Equity Act (MHPAEA) and ensure that health plans are complying with the mandate of providing fair and equal access to mental health and substance use disorder treatment. JoAnn Volk, the founder and co-director of Georgetown University’s Center on Health Insurance Reforms, says HHS and the Labor and Treasury departments are particularly interested in addressing health plans’ reporting and comparative analyses of nonquantitative treatment limitations (NQTLs). 

The MHPAEA was enacted in October 2008 and built upon the Mental Health Parity Act of 1996, which prohibited large group health plans from having different annual and lifetime limits for mental health and medical/surgical benefits. However, the agencies did not publish final regulations implementing the MHPAEA until November 2013.  

As health insurers decide how to price their Affordable Care Act exchange plans for the 2024 plan year, inflation, COVID-related costs and Medicaid redeterminations are some of the major factors influencing their calculations, according to a new issue brief from the American Academy of Actuaries. Industry experts say that overall, gross premiums are likely to go up — but because few consumers will feel the impact on their net premiums thanks to expanded subsidies, insurers and regulators may not be driven to aggressively keep rates in check. 

“I think the early read right now is the rate increases are going to be higher than last year,” says Fritz Busch, a member of the American Academy of Actuaries who contributed to the report. In 2023, the average benchmark ACA exchange premium rose by 3.4%. “It’s going to vary by state, but you’re already seeing some [rate requests] well into the double digits — and some single as well — but I think, on average, it’s going to be higher.” 

Two health care sector heavyweights— AHIP, the insurance trade group, and the American Medical Association (AMA), a physician group — are teaming up on an effort to boost value-based care by increasing data sharing. A health care industry insider says that the tentative partnership between two longtime adversaries is just the latest indication that, due to plan sponsor pressure on carriers and providers, value-based care could become the industry standard in independent physician practices and primary care. 

AHIP, AMA and an additional partner, the National Association of Accountable Care Organizations (NAACOS), on July 25 rolled out a “playbook” for providers and insurers seeking to adopt value-based reimbursement or become partners in an accountable care organization (ACO). The document, which the three groups say is just the first of several such releases, focuses on how providers and plans can effectively share both individual medical and population data. 

Medicaid managed care organizations denied one out of every eight prior authorization requests in 2019, according to a recent report by the HHS Office of Inspector General. Among the 115 MCOs reviewed, 12 MCOs that covered about 2.7 million enrollees had denial rates higher than 25%.

The report studied seven MCO parent companies with the greatest number of Medicaid enrollees across 37 states. Molina Healthcare, Inc. had the highest overall prior authorization denial rate at 17.7%, with seven of its 12 MCOs seeing denial rates greater than 25%.