Medicaid Managed Care Appeals and Grievances:  GAO Takes a Look

Last week, GAO issued a performance audit of data on Medicaid MCO appeals and grievances. The database GAO examined was the first year of Managed Care Program Annual Reports (MCPARs) submitted by state Medicaid agencies to CMS.  MCPARs are one of three reports on which CMS relies to conduct oversight of state managed care programs (the other two relate to medical loss ratios and network adequacy).  In addition to information on appeals and grievances, the MCPAR template is designed to collect MCO-specific data on enrollment, quality measures, encounter data submission, sanctions, program integrity, and financial performance.  States are required to submit MCPARs annually and to post them on their Medicaid agency websites.

The reason for the focus just on appeals and grievances data in the MCPARs is because that’s what the requestors, Senate Finance Committee Chair Ron Wyden (D-OR) and House Energy and Commerce Committee Ranking Member Frank Pallone (D-NJ), asked GAO to look at. (They are also doing their own oversight).  Enrollee appeals of MCO denials of payment for services are an important marker of access to care.  If an MCO subjects a wide range of services to the requirement that its network providers obtain authorization for payment prior to furnishing the service, and if the MCO routinely denies prior authorization requests, enrollee access to needed services may be compromised.  Neither state Medicaid agencies nor CMS can effectively monitor MCO performance without accurate and timely data on appeals and grievances.

In this study, GAO examined the first round of MCPARs submitted by 35 states for contracting year 2022.  It found incomplete and inconsistent reporting across the states for the data elements the MCPAR template requires.  It also found that the MCPAR template does not request information about the number of denials of requests for prior authorization or the outcome of appeals of those denials (i.e., was the denial reversed?).  In a characteristic understatement, GAO observed: “Without these data, and without addressing the [gaps and inconsistencies in the data submitted], the appeals and grievances data are of limited usefulness to identify problems with quality or access within managed care.”

GAO made two recommendations to CMS.  First, it urged CMS to require states to report on the number of denials and the outcomes of appeals from those denials.  This complements recommendations made by the HHS-OIG in a July 2023 report and by MACPAC in its March 2024 Report to Congress. CMS concurred with the GAO’s recommendation, writing that “in collaboration with states and other stakeholders, [it] will work to incorporate data fields on the outcomes of Medicaid managed care denials and appeals into the MCPAR for future years.”

GAO’s second recommendation was that CMS “implement its planned actions for analyzing the Medicaid managed care appeals and grievances data, using it for oversight, and making it publicly available.”  This was a reference to a “draft plan for processing and analyzing annual report data” that CMS developed in April 2023 (this “draft plan” had not previously been known to the public).   The “planned actions” were (1) launching an analytic dashboard based on report data; (2) publishing quarterly summary reports on the CMS website; (3) publishing state-level data available for download; and (4) developing and implementing an oversight plan based on findings from the analytic dashboard.  GAO found that CMS had made “limited progress” implementing these actions and “had not set time frames for next steps as of December 2023.”

CMS concurred with the GAO recommendation that it implement its own plan, affirming that it “will continue to work towards its goals of being able to analyze the MCPAR appeals and grievances data, use it for oversight, and make it publicly available.”  (Public availability of MCPAR data was also a unanimous MACPAC recommendation). As of this writing, CMS has not posted any MCPAR reports, although it does make them available on request at Hope springs eternal, but the wait goes on.

Finally, there’s the matter of footnote 43.  The text reads: “As of December 2023, six states had not submitted any of their annual reports, with those reports being 6 to 9 months overdue.”  The footnote identifies the states as Florida, Kentucky, New Mexico, Oregon, Tennessee, and Vermont. This explains why a December 2023 scan of state agency websites did not find MCPARs posted on the websites of these states as required by CMS regulations (Tennessee posted in January).  You can’t post what you don’t submit.

The failure of these states to submit their MCPARs altogether raises fundamental questions for CMS oversight of Medicaid managed care and for the role of transparency in holding MCOs accountable for performance.   How can CMS know how MCOs in a state are performing if the Medicaid agency simply decides not to submit its MCPAR?  What exactly does it mean for CMS regulations to “require” a state Medicaid agency to submit a MCPAR annually and to post it on the agency website?  And if states do not have to submit individual MCO performance data to CMS or post the data on their websites, how can advocates help hold MCOs accountable to children and families and other enrollees?

Andy Schneider is a Research Professor at the Georgetown University McCourt School of Public Policy.