Medicare Advantage Denied Claims Crisis

Medicare Advantage plans have become an increasingly popular choice among Medicare beneficiaries, offering an alternative to traditional Medicare. However, a growing concern within the Medicare Advantage (MA) community is the rising number of denied claims, which can significantly impact your access to necessary healthcare services.

When you enroll in healthcare coverage, it is not unreasonable to expect your plan to cover all the care you need. However, under certain circumstances, your insurer may refuse to pay. Unfortunately, this is not uncommon as denials are on the rise, leaving many seniors struggling to get the medical care they require. Below, we help you understand how Medicare Advantage plan carriers review claims, why they deny them, the appeal process, and how AI could be affecting your denial decision.

How Medicare Advantage Claims Are Reviewed

When your doctor provides medical care, they send a bill (or claim) to your Medicare Advantage plan carrier. Once received, your claim must go through a review process before payment will be sent to the original biller.

The review process can be different from carrier to carrier, but generally, once you receive care at a healthcare facility, your doctor or hospital will submit a claim for the services you received. From there, your insurance company will check this claim for any errors, missing information, and ensure the service provided is covered under your plan.

Once your claim is through this quality assurance step, it will then need to be reviewed for medical necessity. Remember, your plan will only cover services deemed “medically necessary”, so this step is often the catalyst for a denied claim. To ensure your service is medically necessary, ICD-10 and CPT codes submitted to the insurance company from your doctor or hospital are cross checked to ensure the treatment you received matches the diagnosis assigned to your claim.

From there, the insurance company will determine whether the claim is approved and paid or denied. In theory, this process ensures only necessary treatments are covered. In reality, it sometimes results in wrongful denials that leave patients scrambling for solutions.

Why Are So Many Claims Being Denied?

Medicare Advantage plans are designed to match traditional Medicare benefits but may function in different ways. Private insurance companies manage these plans and often use strict rules to decide which treatments they’ll cover and which will eventually get denied. Some common reasons for denials include:

• Lack of Prior Authorization: Some treatments require advance approval, and if your doctor didn’t request it, your claim might be denied.
• Insufficient Documentation: If your doctor’s office doesn’t provide enough information, the insurer may reject the claim.
• Service Not Covered: Some treatments might not be included in your specific Medicare Advantage plan.
• Medical Necessity Disputes: Even if your doctor says you need a procedure, the insurance company might not agree.

According to a KFF Report, in 2023 alone, Medicare Advantage insurers denied about 3.2 million prior authorization requests and this number of denied claims is increasing year over year.

The Fight for Approval: Appeals and Overturn Rates

Good news! If your Medicare Advantage claim is denied, you have the right to appeal. The bad news? It can be a frustrating and time-consuming process that could result in a still-denied claim.

There are three types of appeals:

1. First Appeal: You ask your insurance company to reconsider the denial.
2. Second-Level Appeal: If they refuse, you can request an independent review.
3. Further Appeals: In some cases, denials can be escalated all the way to a federal judge.

Many people don’t bother to appeal, assuming it won’t make a difference. But statistics suggest otherwise. According to KFF, 81.7% of Medicare Advantage prior authorization appeals resulted in approvals in 2023. That means many initial denials were likely unjustified, thus overturned.

If your claim is denied, don’t give up. Appeal the decision and gather as much supporting documentation as possible to back your claim.

AI Denials Are Becoming A Troubling Trend

One of the most alarming developments in Medicare Advantage claim denials is the growing use of artificial intelligence in the approval and denial process. Insurers are increasingly relying on AI to process claims, raising serious concerns about fairness and accuracy.

UnitedHealthcare^®, one of the largest Medicare Advantage insurers, is facing a lawsuit over its alleged use of AI to systematically deny claims. The lawsuit claims that UHC used an AI model to reject claims at a staggering rate. Allegedly, this AI system had an over 90% error rate, denying patients who received medically necessary treatments by their doctors.

While AI can improve efficiency and reduce costs, it’s clear that human oversight is still essential in the approval and denial process for Medicare claims. If you receive a denial, don’t assume the decision was correct, challenge it.

What You Can Do to Protect Yourself

Dealing with a denied claim can be frustrating, but there are steps you can take to fight back and improve your chances of getting the coverage you deserve.

Read Your Policy Carefully

Know what’s covered under your Medicare Advantage plan, which services require prior authorization, and any potential limitations or restrictions that could impact your claims.

Keep Detailed Records

Save all correspondence from your insurer and doctors, including Explanation of Benefits (EOB) statements, medical records, and any prior authorization approvals. These documents can be crucial if you need to appeal a denial.

Verify Prior Authorization Requirements

Some treatments, medications, or procedures require approval before you receive them. Work with your doctor to ensure all necessary pre-approvals are secured to avoid unnecessary denials.

Request a Detailed Explanation

If your claim is denied, ask your insurer for a written explanation. Understanding the specific reason for the denial can help you determine the best course of action for an appeal.

Appeal Any Denials

Don’t accept a denial without challenging it. Many initial denials are overturned upon appeal, so it’s worth the effort to gather supporting documentation and resubmit your claim.

Seek Help If Needed

Organizations like the Medicare Rights Center and State Health Insurance Assistance Programs (SHIPs) offer free guidance to help you navigate the appeals process. Additionally, consulting with a licensed Medicare agent can help you better understand your plan and explore alternative coverage options.

Monitor Changes in Your Plan

Medicare Advantage plans can change their coverage rules each year. Reviewing your plan during the Medicare Annual Enrollment Period can help you avoid unexpected coverage gaps.

Stay Persistent and Proactive

If you suspect an AI-driven or wrongful denial, push for a manual review and escalate your appeal if necessary. Don’t hesitate to advocate for your healthcare rights.

Take Control of Your Medicare Advantage Coverage

The growing number of denied Medicare Advantage claims is a serious problem that affects thousands of Medicare enrollees each year. While insurers argue that their review process is necessary to control costs, many wrongful denials leave patients in a bind without the healthcare they need.

If your claim is denied, don’t be discouraged. Fight back, appeal, and advocate for your health. Additionally, as AI continues to play a larger role in healthcare decisions, staying informed is more important now than ever. Your healthcare is too important to leave in the hands of an algorithm—make sure you get the coverage you deserve.

If you’re unsure whether your Medicare Advantage plan is the right plan for you, our licensed agents can help. Fill out our online rate form today to review your options.