A new report released by Crowe, LLP found that Medicare Advantage plans are much more likely than other payers to deny payment for inpatient claims. The report, entitled “Who’s picking up the check,” analyzed data from more than 1,700 hospitals. It found that Medicare Advantage plans denied 5.8% of inpatient admissions in 2022 compared to a denial rate of 3.7% of inpatient denials from all other payers. The report found that traditional Medicare was one of the most straightforward payers, but that Medicare Advantage plans “have adopted more restrictive level-of-care criteria” in determining coverage for inpatient admissions. Across all payers, denials of inpatient admissions increased 18.5% in 2022 over 2021.
In a press release, Crowe stated: “Healthcare systems have found themselves in precarious financial standing due to a dramatic increase in the number of inpatient claims being denied by health insurers based on the lack of medical necessity….”
The study also pointed out why inpatient denials matter to hospitals and patients alike:
So why does it matter whether a patient was in an observation or inpatient status?
- The status can affect the eventual out-of-pocket costs for the patient related to the services provided.
- The administrative burden placed on providers to defend the level of care given adds to the overall cost of healthcare.
- The financial burden of lost revenue associated with these battles makes it harder for healthcare providers to invest in their true mission of caring for their communities.
The attorneys at Whatley Kallas, LLP have likewise found that Medicare Advantage plans inappropriately override physicians’ judgment to inappropriately deny inpatient admissions.