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Government Watchdog Raises Concerns about Prior Authorization in Medicaid

In July, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a report raising concerns about prior authorization in Medicaid managed care. In the report titled “High Rates of Prior Authorization Denials by Some Plans and Limited State Oversight Raise Concerns About Access to Care in Medicaid Managed Care,” the OIG noted that some people enrolled in Medicaid managed care may not be receiving all medically necessary health care services intended to be covered, citing the high number and rates of denied prior authorization requests. The OIG found limited oversight of prior authorization denials in most states, including limited access to external medical reviews.

To address these shortcomings, the OIG recommended that the Centers for Medicare & Medicaid Services take the following steps:

  • Require states to review the appropriateness of a sample of prior authorization denials regularly;
  • Require states to collect data on prior authorization decisions;
  • Issue guidance to states on the use of prior authorization data for oversight;
  • Require states to implement automatic external medical reviews of upheld prior authorization denials; and
  • Work with states to identify and address Medicaid managed care plans that may be issuing inappropriate prior authorization denials.

September E-News