Late last year, CMS proposed a final rule to address the issue of coverage denials or service denials via prior authorization on behalf of Medicare Advantage Plans. Between providers and patients, coverage issues have significantly increased as beneficiary participation has increased (today, about 1 in 2 Medicare beneficiaries is in a Medicare Advantage plan). https://rhislop3.com/2023/11/09/cms-offers-fix-to-medicare-advantage-denials/
CMS issued the final rule in January of this year, intending to streamline the prior authorization process. In addition to other stipulations, the agency imposed several extra data reporting obligations to enhance transparency in decisions regarding prior authorization. Advocates argue that the requirements, many set to start in 2026, are insufficient. Gaps in Medicare Advantage Data Remain Despite CMS Actions to Increase Transparency | KFF
With the growth of the Medicare Advantage population, the volume of appeals has also increased. In 2023, there were a record 184,693 care denial decisions appealed, based on data from the Centers for Medicare & Medicaid Services (CMS). As of mid-2024, the number of appeals is projected to surpass the previous year’s total by approximately 15,000 by the end of the year. In 2022, a significant 83% of care denials were either partially or completely reversed upon appeal, raising the question of their initial denial reasons.
Nearly all enrollees in Medicare Advantage (99%) are required to obtain prior authorization for some services primarily for, higher cost services, such as inpatient hospital stays, skilled nursing facility utilization, and chemotherapy. This differs from traditional Medicare, where only a few services require prior authorization Prior Authorization and Pre-Claim Review Initiatives | CMS. Prior authorization is intended to ensure that health care services are medically necessary via approval before a service or other benefit is covered. Medicare Advantage insurers use prior authorization, along with other tools, such as provider networks and AI claim reviews, to manage utilization and lower costs.
Concerns have been expressed by some lawmakers and individuals that the requirements and processes for prior authorization, particularly the employment of artificial intelligence in reviewing requests, create obstacles and cause delays in accessing essential care.
The question that continues to beg is whether Medicare Advantage really saves the government/CMS/Medicare money via more efficient care. Some reviews indicate that the denial of care by Medicare Advantage plans may lead to cost reductions without negatively impacting outcomes. This implies that the services not provided do not detrimentally affect patients, at least in the immediate term.
For instance, a 2017 study indicated that the 90-day readmission rates following hospitalization for lower extremity joint replacement, stroke, and heart failure were reduced under Medicare Advantage, even though patients had less post-acute care compared to those under traditional Medicare. Likewise, a study released in February in the JAMA Health Forum revealed that patients transitioning from Medicare Advantage to traditional Medicare post-hospitalization utilized more post-acute care services, yet there was no enhancement in hospital readmissions or mortality rates in the following month.
Contrary data indicates that care denials negatively impact outcomes. A 2023 KFF survey revealed that patients facing prior authorization issues were thrice as likely to encounter care delays and nearly twice as likely to suffer health deterioration. Additionally, a December 2023 American Medical Association survey, which included 1000 physicians, found that approximately one-quarter reported serious adverse events linked to prior authorization delays. Among these, 13% cited life-threatening events, and 7% indicated that such delays resulted in permanent disability or death.
In terms of financial savings, the data is more convoluted. Per Josh Gordon, director of health policy at the Committe for a Responsible Budget, “All of these savings that the private plans are able to generate—and I do think they are able to generate them—are flowing to the plans, and not to [taxpayers].” Through Medicare Advantage, “you may be able to save some money,” according to Gordon, “[but] save money for who—that’s a different question.”
A 2022 study found that low-value care remains prevalent in Medicare Advantage, and a 2024 analysis from the Medicare Payment Advisory Commission, an independent and nonpartisan congressional agency, determined that Medicare Advantage plans cost 23% more than traditional Medicare. Those costs have been attributed in part to a widespread practice of inflating patients’ illness complexity to garner higher reimbursement rates—so-called upcoding. https://rhislop3.com/2024/08/08/phantom-diseases-and-medicare-advantage-fraud/
So in terms of a check-in, here’s what I know.
- Advocates seeking enhanced enforcement mechanisms have resorted to legal measures, advocating for the re-introduction of the Improving Seniors’ Timely Access to Care Act. In June, Congress revisited the bipartisan reform bill. The act aims to increase transparency in the use of prior authorization by Medicare Advantage plans, mandating the disclosure of detailed data to HHS, including denial, appeal, and reversal rates. Moreover, the bill specifies CMS’s authority to establish timelines for reviewing prior authorization requests and mandates an electronic review process to replace fax or phone communications, aiming to streamline the process for both patients and healthcare providers. The bill is still under review in Congress, marking its fifth introduction. Should it be passed, its provisions will not be implemented until 2026.
- In July, the OIG announced that it is further investigating prior authorization in post-acute care. HHS announces investigation of MA prior authorization use for post-acute care | AHA News
- Some private corporations are jumping into the prior authorization milieu. The electronic health record behemoth, Epic, is collaborating with Medicare Advantage plans to simplify the process of prior authorizations and appeals conducted via its platform.
As enrollment will no doubt grow again, with annual open enrollment forthcoming, more issues and news about Medicare Advantage coverage and prior authorizations will no doubt come public. I’ll endeavor to keep tabs.