Testimony Before the  
United States Senate Committee on Homeland Security and Governmental  Affairs  
Permanent Subcommittee on Investigations  
 
 
 
 
Examining Health Care Denials and Delays  in Medicare Advantage   
 
Testimony of:  
Megan Tinker  
Chief of Staff  
Office of Inspector General  
Department of Health and Human Services  
 
 
 
 
 
May 17, 2023  
2:00 p.m.  
SD-562 Dirksen Senate Office Building   
Testimony of:  
Megan Tinker  
Chief of Staff  
Department of Health and Human Services, Office of Inspector General  
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Good morning, Chairman Blumenthal, Ranking Member  Johnson, and distinguished Members of 
the Subcommittee.   I  am Megan Tinker, Chief of Staff, at the Department of Health and Human 
Services (HHS),  Office of Inspector General (OIG).   Thank you for the opportunity to appear 
before you today to discuss  our work examining the potential barriers that seniors may face when 
accessing health care  under Medicare Advantage.  
In 2023, Medicare Advantage  plans currently cover  30 million peopleslightly more than half  
(50.4  percent) of all  Medicare  enrollees.1   For the  first time, Medicare Advantage has surpassed  
traditional Medicare  in enrollment.   One of OIGs  top priorities is ensuring that the Medicare  
Advantage  program works effectively  and  provides  quality health care  for enrollees and value 
for  taxpayers.   This priority includes ensuring that Medicare Advantage  enrollees have access to 
appropriate and medically necessary health care.   
Today, I will focus my testimony on  OIGs work examining  Medicare  Advantage plan practices 
that may impede access to health care  for seniors.   In summary, we have  identified the following 
concerns.  
Medicare  Advantage Organizations (MAOs)  sometimes delayed or denied enrollees access 
to medical services, even though the requested care was medically necessary and met 
Medicare  coverage rules.   In other words, these  Medicare Advantage  enrollees  were denied 
access to needed services that likely would have been approved if these  individuals  had been 
enrolled in original Medicare.  These denials likely prevented or delayed needed care for  
enrollees.  In addition, MAOs sometimes denied payments to health care providers for services 
that they had already delivered to patients, even though the requests met Medicare coverage  
rules,  MAOs own  billing rules,  and should have  been paid by the plan.  
In my testimony, I will provide further details and context on these findings and highlight the 
actions that OIG has recommended the Centers for Medicare &  Medicaid Services (CMS) take to 
better ensure that Medicare Advantage  enrollees  have timely access to all necessary health care  
services.   Additionally, I  will highlight the resource  challenges that OIG faces to provide  
comprehensive oversight of Medicare  Advantage  and other HHS programs.   
 
 
 
1  Kaiser  Family  Foundation,  Half  of  All Eligible Medicare Beneficiaries Are Now Enrolled  in  Private Medicare 
Advantage Plans,  May  2023.   Available at https://www.kff.org/policy-watch/half-of-all-eligible-medicare-
beneficiaries-are-now-enrolled-in-private-medicare-advantage-plans/.  
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MEDICARE ADVANTAGE DENIALS OF SERVICES  AND PAYMENTS  
In April  2022, OIG  published  a report examining  MAO denials  of requests for  prior  
authorization, which is preapproval for  a service or item before the enrollee  receives it,  and 
denials of payment requests from a provider  for a  service  already delivered to the  enrollee.2  
Why Focus Oversight on Medicare Advantage Denials  
Incentives.   A central concern about capitated payment models, including Medicare Advantage,  
is the  potential incentive  for insurers to deny access to  services for  enrollees  and deny payments 
to  providers to increase  profits.   MAOs are paid a fixed amount of money each month for each 
enrollee, regardless of the number or cost of services they pay for on behalf of that enrollee.   
Volume  of Denials.   Although MAOs approve  the vast majority of requests for  services and 
payment, they issue  millions of denials each year.  In 2018, MAOs denied 1.5  million prior 
authorization requests (5.0  percent of all prior authorization requests)  and  56.2 million payment 
requests overall (9.5 percent of all payment requests) in the Medicare Advantage program.  
Prior Evidence of Problems.   OIGs previous analysis of Medicare Advantage appeals 
outcomes  raised concerns about MAO denials.3   When enrollees  and providers appealed service  
and payment denials, MAOs overturned 75 percent of their own denials during  20142016.  
Independent reviewers at higher levels of the appeals process overturned additional denials in 
favor of enrollees  and providers.  At the  time the  report was issued, the  high rate  of overturned 
denials raised  concerns that some  enrollees  and providers were initially denied services and 
payments that should have been provided.  This is especially concerning because  enrollees  and 
providers appealed only 1  percent of denials.   In addition, OIG found that CMSs annual audits 
of MAOs from 2012  through 2016 commonly identified  problems related to  denials.  
How OIG Assessed Medicare Advantage Denials  
For our 2022  report, we selected a stratified random  sample of 250 denials of prior  authorization 
requests and  250 payment denials issued by  15 of the largest MAOs by enrollment during  
June  17,  2019.4   Health care  coding  experts reviewed case files for  all  cases, and physician 
reviewers  examined medical records for  a subset of cases  that warranted  medical necessity 
review.  From these  results, we estimated the rates at  which these  MAOs denied prior  
authorization and payment  requests that met Medicare  coverage  rules and MAO billing  rules.5   
We also examined the  reasons for  these denials in our sample.  
 
2  OIG,  Some Medicare Advantage Organization  Denials  of Prior  Authorization  Requests  Raise Concerns  About 
Beneficiary Access  to  Medically Necessary Care, (OEI-09-19-00260),  April 2022.  
3  OIG,  Medicare Advantage Appeal Outcomes and  Audit Findings  Raise Concerns  about Service  and  Payment 
Denials, (OEI-09-16-00410),  September  2018.   
4  These 15  MAOs accounted  for  nearly  80  percent of  Medicare Advantage enrollees.  
5  Our  sampling  method  enables  us  to  project these rates to  the  universe of  all denials  by  the 15  largest MAOs during  
this  time period.   However,  it does not enable us  to  estimate MAO-specific rates  or  to  project the reasons  for  denials  
from  our  sampled  cases to  the universe of  denials.  
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OIG Findings  Raise Concerns  About MAO Denials  of Services  
Among prior authorization requests that MAOs denied, 
13  percent were for requests that met Medicare coverage  
rules.   In other words, these services likely would have  
13%  
of  prior authorization   been approved in original Medicare.  This  rate  projects to 
1,631 prior authorization denials for requests that  met 
denials  were for services that 
Medicare coverage  rules for these  MAOs during the first 
met  Medicare coverage  rules   week of June 2019.6   Such  denials can have a  range of 
negative impacts, such as 
enrollees  not receiving  
needed care, delays in receiving  needed care, enrollees  receiving 
IMPACT:  Denials likely 
an alternative service that may be less effective for their needs, 
prevented  or  delayed 
enrollees  paying out-of-pocket for  care, and/or administrative  
burden for  enrollees  or their providers who choose to appeal the   needed  care  
denial.  
MAO use of internal  clinical criteria contributed to many of these denials in our sample.   
For many of the denials of prior authorization requests in our sample for services that met 
Medicare coverage  rules, MAOs denied the requests by applying MAO clinical criteria that are  
not required by Medicare.   MAOs must follow Medicare  coverage rules, which specify what 
items and services are  covered and under what circumstances.  However, at the time of our 
evaluation,  they were  also permitted to use additional clinical criteria that  were not developed by 
Medicare, as long as such criteria  were  no more  restrictive than original Medicares national 
and local coverage policies.7  
CMS guidance on the appropriate use of such criteria was  insufficient.   In several cases, we  
were  unable to determine whether the prior authorization denials  that met Medicare coverage  
rules would be considered appropriate  by CMS because  CMSs guidance regarding MAO use of 
internal clinical criteria  was  not sufficiently  detailed.   
CMS  has announced new requirements intended to protect MA enrollees from  
inappropriate  use of prior authorization, to take effect in 2024.   In our 2022 report, OIG  
recommended that CMS issue new guidance on the appropriate use of MAO clinical criteria in 
medical necessity reviews.   In April 2023, CMS issued a final  rule that cited OIGs report  in 
addressing  this recommendation. The final rule provisions, which take effect in 2024, confirm 
that MAOs  must comply with traditional Medicares benefit and coverage  conditions.  They 
clarify that MAOs may only use  internal criteria when traditional Medicares  coverage criteria  
are not fully established.  MAOs must ensure  that their internal  criteria are  publicly accessible  
and  provide clinical benefits that are highly likely to outweigh any clinical harms, including from 
 
6  For  an  annual context, if  these MAOs denied  the same number  of  prior  authorization  requests  in  each  week  of  
2019,  they  would  have denied  84,812  requests  for  services that met Medicare coverage rules  that year.  
7  CMS,  Medicare Managed  Care Manual, ch.  4,  sec.  10.16,  p.  28.   Available at https://www.cms.gov/Regulations-
and-Guidance/Guidance/Manuals/Downloads/mc86c04.pdf.  
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delayed or decreased access to items or services.  CMS  is also requiring MAOs to establish 
Utilization Management Committees to review policies annually and ensure consistency with 
traditional Medicares national and local coverage decisions and guidelines.8  
In addition, CMSs final rule  sets forth other prior authorization requirements intended to remove 
barriers to appropriate care for  MA enrollees, including adding continuity of care requirements 
and reducing disruptions  for  enrollees. For example, the  rule requires that approval of a prior  
authorization request for  a course of treatment must be valid for as long as medically reasonable 
and necessary to avoid disruptions in care  in accordance with applicable coverage  criteria, the 
patients medical history, and the treating providers recommendation.  The rule  also requires  
that plans provide a minimum 90-day transition period when an enrollee who is currently 
undergoing an active course of treatment switches to a new MA plan.9  
We  found  denials of services  that met Medicare coverage rules caused  by other MAO 
practices.   For example, MAOs requested copies of documentation already contained in the case  
file.   In other cases, some  prior authorization denials in our sample resulted from MAO requests  
for  unnecessary documentation.  The following example illustrates this issue:  
 
Denial  of  Admission  to  a  Skilled Nursing  Facility Illustrates a  Need for  CMS  To Direct  
Additional  Attention to Requests  for  Unnecessary Documentation  
An  MAO denied  a  request  for  a  skilled  nursing facility (SNF)  admission,  stating that  it  needed  to 
review  the enrollees most  recent  therapy records.   However,  our physician  panel  determined  that  
the  medical  records available to the MAO were sufficient  to  demonstrate  that  the enrollees 
deteriorating functional status  and  morbidities  warranted  admission  to a  SNF with  access to 
physical and  occupational therapy.   This  denial was reversed  upon  appeal.  
Requests  for unnecessary documentation  may prevent  or  delay Medicare  enrollees from receiving 
medically necessary care  and  can  burden  providers.  Even when  denials are reversed, avoidable 
delays  and  extra steps  create friction in  the program and  may create  an  administrative  burden  for  
enrollees, providers, and  MAOs.   CMS  should  update its audit  protocols for MAOs to better  identify 
these  denials.  For example, it  could  add  a question  for  auditors  examining denial cases to 
determine  whether  MAOs  requested  unnecessary information.  
 
 
8  42  CFR   422.137(d); see  also  88  FR  22120, 22122  (April 12,  2023).  
9  42  CFR   422.112(b)(8); see  also  88  FR  22120,  22206  (April 12,  2023).   
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OIG Findings  Raise Concerns  About MAO Denials  of Payments  
An estimated 18 percent of payment denials met Medicare  
coverage rules and MAO billing  rules and therefore  the 
18%   provider payments should not have been denied  by the 
of  payment  denials  
MAOs.  This projects to 28,949  payment denials that met 
Medicare coverage  rules and MAO billing rules for these  
were for claims that met  
MAOs during the first week 
Medicare coverage  rules  and   of June 2019.10   Denying 
MAO  billing rules   payment requests that meet 
IMPACT:  Denials prevented  or  
Medicare and MAO  rules 
delayed  payments to providers 
delays or prevents providers 
from receiving payment for services that they have  already  for services already delivered  
delivered to enrollees.  
Human errors during manual reviews contributed to these payment denials.   MAOs relied  
on their staff to manually review some  requests for payments before approving or denying them.  
These reviews were  susceptible to human error, such as a reviewers overlooking a document in 
the case  file or inaccurately interpreting CMS or MAO coverage  rules.   
System programming errors  also contributed to payment denials.   MAOs denied some 
payment requests because of inaccurate programming of claims processing systems.  System 
errors can cause greater harm because they could  generate  large  volumes of incorrect denials 
until the MAO notices and fixes the error.  
OIG Recommends  Additional  Ways for  CMS To Better Protect Enrollees  and 
Providers  From  Inappropriate Denials  
In addition to our recommendation that CMS issue new guidance on the appropriate use of MAO 
clinical criteria in medical necessity reviews, our report included two recommendations that 
remain open.   We  continue to  recommend that CMS:   
   incorporate the issues  identified in  our  evaluation  into its audits of MAOs,  and  
 
   direct MAOs to take additional steps to identify and address vulnerabilities that can  
lead to manual review errors and  system errors.  
CMS agreed with each of these recommendations  and indicated that it plans to implement them.  
In addition, two of OIGs recommendations remain open from our 2018 report on outcomes of 
Medicare Advantage appeals. These  recommendations are that CMS:  
 
10  For  an  annual context, if  these MAOs denied  the same number  of  payment requests  each  week  of  2019,  they  
would  have  denied  1.5  million  payment requests  that met Medicare coverage rules  and  MAO billing  rules that year.  
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   enhance its oversight of MAO contracts, including those with extremely high  
overturn rates and/or low appeal rates, and take corrective action as appropriate;  
and  
 
   provide  enrollees  with clear, easily accessible information about serious violations 
by MAOs.   
Although CMS agreed with these recommendations, it has not yet fully implemented  them.  
CMS implemented  our third recommendation from that 2018 report.   In 2019, CMS  revised its 
Civil Money Penalty calculation methodology to include a new aggravating factor for 
inappropriate delay  or denial of medical services, drugs, and/or appeal rights, and new 
aggravating factors for prior offensesall  changes that better hold MAOs accountable for 
ensuring appropriate access to  care.  
LOOKING FORWARD: KEEPING PACE WITH FRAUD, WASTE, AND  
ABUSE IN  HHS PROGRAMS  
HHS-OIGs oversight portfolio is vital, vast, and varied.  In fiscal year (FY) 2022, HHS-OIG  
was responsible for oversight of more than $2.4 trillion in HHS expenditures.  With a FY 2023 
enacted budget of $432.5 million, OIG has about 2 cents to oversee every $100 of HHS  
spending.   In particular, effective oversight of Medicare  and Medicaid is complex, challenging, 
and resource intensive  because of the intricacy and breadth of these programs.  That is especially 
true in Medicare Advantage, which  includes nearly 4,000 plans, 30 million enrollees, and more  
than $350 billion in annual expenditures.  
Despite  extensive reviews and enforcement, our limited resources do not  allow us to provide  
comprehensive oversight of Medicare and Medicaid.   Notwithstanding rigorous efforts by OIG 
and support from Congress, the Administration, and HHS for OIG work and resources, serious 
fraud, waste, and abuse continue to threaten HHS programs and the people they serve.  HHS-
OIG lacks a sufficient number of agents to work cases and auditors, data scientists, and analysts 
to detect trends, outliers, and program vulnerabilities.   OIG is turning down between 300 and 400 
viable criminal and civil health care fraud cases each year.  Each case means unaddressed 
potential fraud and missed opportunities for deterrence.  This includes the growing trend of  
fraudsters targeting Medicare  Advantage plans  as the program continues to expand.   
Every day we make tough choices on cases and issues to decline.  OIGs Regional Offices 
reviewed and evaluated more than 1,780 hotline complaints in FY 2021 and more than 3,562 
hotline complaints in FY 2022 that might have developed into viable cases, but we did not have  
resources to open additional cases.  In addition to the cases noted above, last year OIG turned 
down 648 cases from the major case  coordination effort we have  with CMS, a nearly 10-percent 
increase in cases declined from the prior year.  These uninvestigated cases represent real, 
potential unchecked fraud and the potential for patients to be put in harms way.  I do  not want to 
give the impression that we are not addressing serious fraud and abuse.  We are, and our  
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statistics and return on investment show it.   However, with current resources we cannot keep up 
with the level of threat to HHS, patients, and taxpayer dollars.  
The FY 2024 Presidents Budget requested resources for  OIG that, if enacted, would go a long 
way toward addressing this shortfall, particularly with respect to combating fraud, waste, and 
abuse in Medicare and Medicaid, for  which the Presidents Budget requests approximately  
$52.5  million in additional funding.  With additional resources, OIG would expand  its work 
examining critical issues in Medicare  Advantage, including additional work examining access to 
care  issues, increased  oversight of the billions in dollars in risk adjustment payments, and 
additional  targeted efforts to root out fraud that threatens the integrity of the  Medicare Advantage  
program.  
CONCLUSION   
As Medicare Advantage  enrollment continues to grow, MAOs play an increasingly  critical role  
in ensuring that Medicare  enrollees  have  appropriate access to needed care  and  that providers are  
reimbursed appropriately.   However, our evaluations raise concerns about how MAOs fulfill  
these  critical responsibilities  that affect enrollee  health and the value of taxpayer investments in 
the program.    
Denied service  requests that meet Medicare coverage  rules may prevent or delay enrollees  from 
receiving medically necessary care and  can burden providers.  Even when denials are  reversed, 
avoidable delays and extra  steps create friction in the program and may create an administrative  
burden for  enrollees, providers, and MAOs.  Further, enrollees  in Medicare  Advantage may not 
be aware that they may face  greater barriers to accessing certain  types of health care services in 
Medicare Advantage than in original Medicare.  
It is vital that CMS  continue to  take action to ensure that Medicare Advantage enrollees  have  
timely access to all necessary health care services.   We have recommended several ways for  
CMS to do this and will continue to push for progress.  OIG will also continue to be  vigilant in 
our oversight and enforcement  work to promote payment integrity, enrollee  access,  and quality 
of care in Medicare Advantage.  
We appreciate the attention that the Subcommittee  is bringing to these important issues and the 
opportunity to testify before you today.  I welcome your  questions.    
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