HHS' Office of Inspector General raised concerns about the rate of prior authorization denials in Medicaid managed care and a lack of state oversight of these denials in an audit published July 17.
The OIG audited seven parent companies with the highest number of enrollees, accounting for 115 MCOs across 37 states.
On average, Medicaid managed care organizations denied around 1 in 8 prior authorization requests, according to the audit. Of the 115 MCOs the OIG audited, 12 had prior authorization denial rates greater than 25 percent.
The OIG interviewed 37 state Medicaid directors as part of the audit and found most states said they did not routinely review the prior authorization denials, and many did not monitor data related to prior authorization.
The OIG issued five recommendations to CMS to improve oversight in the audit:
- Require states to review a sample of MCO prior authorization denials regularly.
- Require states to collect data on MCO prior authorization decisions.
- Provide guidance to states on the use of data for oversight.
- Require states to provide external medical reviewers for denied prior authorizations.
- Work with states to identify MCOs with inappropriate prior authorization denials.
CMS concurred with the fifth recommendation and did not agree or disagree with the first four recommendations, according to the audit.
Read the full report here.