Protecting Beneficiary Rights in the the Managed Care Environment

Bruce G. Baron, Esquire (

 The USDHHS Office of Inspector General (OIG) is expected to issue its Work Plan Report (OEI-09-19-00350) next year (2021) on the results of its review of Medicaid Managed Care Organization (MCO) Plans’ denied services and payments that were overturned on appeal to help monitor for improper denials of access to covered services that benefit the MCO’s bottom lines. 

In September 2018, the OIG issued a critical report of Medicare Advantage MCO Plans (OEI-09-16-00410) that cited 45% of the Plans for providing incomplete or incorrect information to beneficiaries thereby inhibiting their exercise of appeal rights (only 1% of access to coverage decisions were appealed in the period reviewed), while 75% of denials that were appealed were overturned in the appeal process.  The 2018 Report recommended that CMS: (1) enhance its oversight of MCO contracts including those with extremely high overturn rates and/or low appeal rates and take corrective action as appropriate; (2) address persistent problems related to inappropriate denials and insufficient denial letters in Medicare Advantage; and, (3) provide beneficiaries with clear, easily accessible information about serious violations by MCOs.

Federal Managed Care regulations (42 CFR §§ 438.228(a), 438.400-438.424) require Medicaid Managed Plans to provide “timely and adequate notice of adverse benefit determinations” (42 CFR § 438.404), including the right: (a) to obtain reasonable access to and copies of all documents relevant to the determination at no cost to the beneficiary ; (b) to get information on the procedures required to perfect and to expedited, as needed, the appeal; and, (c) to get information on how to continue benefits pending the resolution of the appeal. 

The Medicaid Managed Care Plans must also provide information about the appeals process to all participating providers (42 CFR § 438.414); and, nursing homes must also provide residents with information regarding Medicaid coverage and related State and local advocacy organizations (42 CFR §§ 483.10(g)(4)(ii-iii)).  Nursing homes that are subject to the Conditions of Participation and any related State licensure regulations (e.g., 28 Pa. Code §   201.2, incorporating the 1998 version of resident rights rules) should update and monitor the application of their policies and procedures to assure residents’ rights related to Medicaid coverage under their Medicaid Managed Care Plans given the OIG’s concerns to prevent inappropriate denials of services and payments.