Medicare Advantage Plan contracts are “take-it-or-leave-it” agreements
Many questions are swirling about regarding Medicare Advantage Plan (MAP) denials asking what to do about the increasing number and given reasons. I’ve heard or read some amazing stories where payers have gone to astounding lengths to deny claims. Answers are also swirling about based on understandings of Medicare rules, contract law, or traditional views of medical necessity. Your mother told you that life wasn’t fair; get over it. Mom was right.
Denials can be divided into technical denials and necessity denials. Technical denials have even extended to EMTALA transfers where the receiving hospital, in network or out, was denied coverage on technical grounds. Sound illegal? Not necessarily.
As has been pointed out in RACmonitor by legal experts, most issues with MAPs are rooted in the contract between provider and payer. Conventionally, one party cannot act arbitrarily or capriciously in a way affecting the contract terms. But MAP contracts are “take-it-or-leave-it” agreements. So when the MAP, for example, modifies MCG or InterQual with internal standards without notice, one would reasonably believe a breach of contract occurred. I brought this specific example to our contracts’ manager. Turns out there is a clause in every one of these contracts that allows the MAP to do whatever it wants. MAPs can manufacture their own Inpatient-Only lists, ignore the two-midnight rule, and define medical necessity in extreme ways. As arbiter the Centers for Medicare & Medicaid Services (CMS) support this behavior by inaction.
A fun fact about medical necessity: MCG and InterQual are specifically designed for payers, being sold as “clinical decision-making tools”, using criteria foreign to the vast majority of physicians. Just so you know.
If a denial claim is to be based on MCG or InterQual, verify that the correct condition-based subset was used by the payer. The basis may be the chief complaint or initial diagnosis given with admission notification, not on clinical documentation, usually within hours of admission. Directly address this on appeal. Hammer home the fact admission was the superior choice over outpatient care to avoid readmission or adverse outcome that will end up costing the payer more.
One-day inpatient stays are always a target no matter the resources expended, CMS coverage determinations, Medicare rules, MCG or InterQual. Observation is usually offered instead. To take or decline is a business decision. Money now is generally better than money later; the difference in reimbursements may be so narrow as to make taking the offer the better choice.
Technical denials typically involve an alleged flaw in notification; either late or absent notice. If the provider is not contracted a denial will be for post-stabilization care (admission) without authorization. The lack of notice can fall on receiving hospitals after an EMTALA transfer for both scenarios.
The law can be on your side. If a denial is for post-stabilization care without authorization CMS, and some states, impose strict timelines for provider and payer alike. Once a decision is made to admit (or transfer to another acute hospital), stop. Call the payer immediately for direction. The payer must either respond and assist in transfer in-network or authorize admission quickly. Failure to respond is de facto authorization, although one certain to go through the appeal process to resolve.
The best offense is a good defense. Keep records. Stay within the lines. Our hospital has been successful time and again through good documentation during the notification process and during the stay. Every contact with the payer UM department during the stay represents an opportunity for repatriation into network forgone. Good record keeping by a case manager or UM nurse has led to winning appeals.
More aggressive defense of medical necessity by providers can overcome more aggressive definitions by payers when those definitions cross certain lines a reasonable average person recognizes as improper when an appeal extends outside the payer’s internal appeals process.