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Congress is mulling changes to Medicare Advantage that would speed up the prior authorization process and mandate more transparency when health plans deny provider requests. The thinking behind the bill is that insurers sometimes use tactics that rein in healthcare costs, but also affect the level of care that providers are able to give.
The bipartisan legislation, the Improving Seniors’ Timely Access to Care Act, was introduced in the House of Representatives on Thursday.
Health insurers, including those that offer Medicare Advantage plans, require providers to obtain prior authorization for certain medical treatments or tests before they can provide care to their patients. Insurers claim that prior authorization can play a role in ensuring people receive clinically appropriate treatments and help control the cost of care.
But the authors, including Representatives Suzan DelBene (D-Wash.), Mike Kelly (R-Pa.), Ami Bera (D-Calif.) and Larry Bucshon (R-Ind.), said in announcing the bill that prior authorization can be misused.
When it is, they said, it can result in administrative burdens for providers and can delay needed medical intervention, while taking time away from patient care.
WHAT’S THE IMPACT?
Prior authorization is a utilization-management process used by health insurance companies to determine if they will cover a prescribed procedure, service or medication. The process is intended to act as a safety and cost-saving measure, although it has received criticism from physicians for being costly and time-consuming.
In 2018, the U.S. Department of Health and Human Services’ Office of the Inspector General raised concerns after an audit revealed that MA plans ultimately approved 75% of requests that were originally denied.
“The high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided,” the OIG wrote at the time. “This is especially concerning because beneficiaries and providers rarely used the appeals process, which is designed to ensure access to care and payment. During 2014-16, beneficiaries and providers appealed only 1% of denials to the first level of appeal.”
At that time, Centers for Medicare and Medicaid Services audits highlighted persistent performance problems among Medicare Advantage Organizations related to denials of care and payment. For example, in 2015, CMS cited 56% of audited contracts for making inappropriate denials. CMS also cited 45% of contracts for sending denial letters with incomplete or incorrect information, which the agency said could inhibit beneficiaries’ and providers’ ability to file a successful appeal.
In response to these findings, CMS took enforcement actions against MAOs, including issuing penalties and imposing sanctions. But OIG said more needed to be done.
Enter the new bill, which builds on a consensus statement issued in 2018 by groups such as the American Hospital Association, America’s Health Insurance Plans, BlueCross BlueShield Association and the American Medical Association.
Based in part on the principles outlined in that statement, the bill would establish an electronic prior authorization process, and require HHS to establish a process for “real-time decisions” for items and services that are routinely approved.
The bill would also seek to 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. It would then encourage plans to adopt prior authorization programs that adhere to evidence-based medical guidelines in consultation with physicians.
A similar proposal was floated in 2019, but it died in Congress when insurers expressed concerns about some of that bill’s transparency requirements, which tasked them with disclosing information publicly on a website. The new bill only requires plans to send that information to the HHS secretary.
THE LARGER TREND
Prior authorization has a complex history, with reform long being a sought-after goal of provider groups, which say physicians are increasingly being told to secure approval from insurers before a patient can access tests, drugs or treatment.
In December 2020, CMS proposed a rule that sought to streamline prior authorizations to lighten clinicians’ workload and allow them more time to see patients. In theory, the rule would improve the electronic exchange of healthcare data among payers, providers and patients, and smooth out processes related to prior authorization to reduce provider and patient burden.
CMS cited the COVID-19 pandemic as a catalyst, highlighting inefficiencies in the healthcare system that include a lack of data sharing and access.
Then in March, in a presentation on Zoom from America’s Health Insurance Plans, AHIP revealed data showing that handling prior authorization requests electronically, rather than manually, can reduce the median time between submitting a PA request and receiving a decision. The result clocks in at around three times faster, for a time reduction of about 69%.
In addition to a faster time to decision, electronic PA processes also result in a faster time to patient care, the findings showed. Providers reported that patients received care faster after the former implemented electronic processes. Among those using these solutions for most of their patients, 71% said that timeliness to care was faster.
Lowering provider burden from phone calls and faxes was a major benefit as well. Among experienced users, a majority saw less burden after implementation of electronic PA capabilities. In all, 54% reported fewer phone calls and 58% reported fewer faxes, while 63% reported less time spent on phone calls and 62% cited less time spent on faxes.
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