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Blog | Health Plan Payment and Reimbursement

Hospitals and Congress propose improvements to prior authorization processes in Medicare Advantage

Blog | Health Plan Payment and Reimbursement

Hospitals and Congress propose improvements to prior authorization processes in Medicare Advantage

The American Hospital Association says pending regulations that would affect prior authorization should be expanded to cover MA.

The issue of prior authorization in Medicare Advantage (MA) has entered the spotlight in recent weeks, with hospital advocates lobbying for changes and momentum building behind federal legislation that was drafted to improve the process.

The American Hospital Association (AHA) wrote a letter to CMS in which it said MA health plans should be included in pending regulations to streamline prior authorization in public healthcare programs.

CMS in December 2020 issued a proposed rule that would place new requirements on Medicaid fee-for-service (FFS) and managed care programs, along with commercial health plans in the Affordable Care Act's federally facilitated marketplaces, to improve the electronic exchange of data and streamline processes related to prior authorization starting in 2023.

Among other obligations, payers would have to issue decisions within 72 hours for urgent requests or a week for standard requests. Processes for determining whether a procedure is subject to prior authorization, initiating a submission and receiving determinations would be standardized.

While CMS has indicated that the Medicare FFS program will abide by the new regulations, the AHA says the exclusion of MA plans “is extremely troubling and significantly reduces the potential impact of the regulation.”

“In order to promote procedural improvement and prevent negative health outcomes associated with delays in care for all beneficiaries, we urge CMS to require MAOs [Medicare Advantage organizations] to adhere to the requirements set forth in this proposal,” Stacey Hughes, executive vice president for government relations and public policy with the AHA, wrote in a comment letter to CMS. “Including them also would reduce administrative burdens and costs as providers would have less variation among health plans.”

CMS also should require MA plans to forgo prior authorization for services with an approval rate of 90%, the letter adds, among other recommendations. “This approach would go a long way in reducing unnecessary care delays and clinician burden while giving the plan the ability to ensure care adheres to the patient’s coverage rule,” Hughes wrote.

Congress looks to take action

Bipartisan, bicameral legislation could offer a more permanent fix to the issue of prior authorization in MA.

The Improving Seniors’ Timely Access to Care Act was introduced in the House in May and in recent weeks secured the support of at least 227 cosponsors, representing a majority. A companion Senate bill also has bipartisan sponsorship and was introduced the week of Oct. 18.

Key provisions would:

  • Establish an electronic prior authorization process.
  • Require the U.S. Department of Health and Human Services to establish a process for real-time decisions on items and services that are routinely approved.
  • Improve transparency by requiring MA plans to report to CMS on the extent of their use of prior authorization and the rate of approvals or denials.
  • Encourage plans to adopt prior authorization programs that adhere to evidence-based medical guidelines in consultation with physicians.

“Paperwork should never get in the way of seniors accessing timely, critical care,” Rep. Suzan DelBene (D-Wash.), lead sponsor of the House bill, said in a news release. “Prior authorization is an important tool, but we need to bring it into the 21st century so that our seniors get the medical attention they need when they need it.”

The bill “would make every provider’s day easier when it’s fully implemented,” she added.

The prospects of passage in the short term are unclear as Democrats in Congress continue to negotiate a multitrillion-dollar social infrastructure bill that could be passed in conjunction with a bipartisan bill to fund physical infrastructure.

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (nhut@hfma.org).

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