OIG Report Highlights Prior Authorization Denials, Medicaid MCOs

In 2019, a review conducted by the Office of Inspector General (OIG) found that Managed Care Organizations (MCOs) denied approximately one out of every eight requests for prior authorization of healthcare services. The study examined 115 MCOs and discovered that 12 of them had prior authorization denial rates exceeding 25%, double the overall rate. The American Association for Homecare (AAHomecare) summarized the OIG report, which highlighted the lack of mechanisms for patients and providers to challenge MCO denials, and recommended that the CMS take several actions to improve oversight, including regular reviews of MCO prior authorization denials, data collection, issuing guidance to states, implementing external medical reviews, and addressing inappropriate denials.

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