08/14/2023

OIG report finds high prior authorization denial rates in Medicaid Managed Care plans

A recent Office of Inspector General (OIG) report found that Medicaid Managed Care Organizations (MCO) deny one out of every eight requests for prior authorization of services, with some denial rates exceeding 25%.

Why It Matters: With calls for prior authorization reform for Medicare Advantage plans growing louder, this report brings to light similar issues that Medicaid enrollees face. ASTRO will continue to advocate for appropriate access to care for all patients.

Go Deeper: According to the report, many States have limited MCO plan oversite and do not routinely review prior authorization denials, which allows inappropriate denials to go undetected. The OIG is recommending that CMS:

• Require States to review the appropriateness of MCO prior authorizations denials regularly.
• Require States to collect data on MCO prior authorization decisions.
• Issue guidance to States on the use of MCO prior authorization data for oversight.
• Require States to implement automatic external medical reviews of upheld MCO prior authorization denials.
• Work with States to identify and address MCOs that may be issuing inappropriate prior authorization denials.

To conduct this review, the OIG identified seven MCOs with the largest number of patient enrollees across the country. According to the report, in 2019, the seven MCOs identified operated 115 plans across 37 States with a total of 29.8 million enrollees. The OIG collected data from these MCOs about prior authorization denials and related appeals and surveyed State Medicaid agency officials to examine aspects of State oversight.