Dive Brief:
Democrats are raising concerns about a new CMS pilot program testing prior authorization requirements, which make patients get their health plan’s approval before receiving certain services, in traditional Medicare.
The pilot, which is set to go into effect next year, will add new red tape to the federal insurance program that could delay care and worsen outcomes, 17 House Democrats wrote in a letter to CMS Administrator Dr. Mehmet Oz on Monday.
The letter, led by Reps. Suzan DelBene, D-Wash. and Ami Bera, D-Calif., asks for more information about how the pilot will be implemented, what services will be subject to prior authorization, how requests for care will be reviewed and how regulators plan to avoid improper denials for Medicare beneficiaries.
Dive Insight:
The CMS’ innovation center announced in late June that it planned to trial new prior authorization requirements in traditional Medicare in six states: New Jersey, Ohio, Oklahoma, Texas, Arizona and Washington.
The government will contract with private companies, including Medicare Advantage plans, to put prior authorizations in place for certain services, including skin and tissue substitutes and some knee surgeries.
Insurers defend prior authorizations as a valuable strategy to curb unnecessary healthcare spending. But the utilization management tool is also a major source of administrative burden for providers, and can delay or prevent care for patients, leading in some cases to worse health outcomes.
Traditional Medicare only requires prior authorization in rare cases, so the pilot — and the fact that its announcement coincided with the Trump administration moving to pare back prior authorizations in other areas — immediately raised red flags for some experts.
In June, the administration secured pledges from major insurers to reduce prior authorizations, including in privatized MA plans where critics say the tool has run rampant.
In 2018, the HHS Office of Inspector General found that 75% of denied prior authorization requests in MA were overturned upon appeal. Four years later, another report from the HHS OIG found that MA plans were frequently more restrictive in their use of prior authorization than allowed under Medicare’s coverage rules.
Now, a group of Democrats is seeking answers from Oz as to why the administration is trying to weave prior authorizations into traditional Medicare, and how it plans to do so.
“The use of prior authorization in Medicare Advantage shows us that, in practice, [the proposal] will likely limit beneficiaries’ access to care, increase burden on our already overburdened health care work force, and create perverse incentives to put profit over patients,” the lawmakers wrote in the Monday letter.
In particular, the lawmakers said they’re concerned that the administration plans to contract with companies like MA plans to run the demonstrations, especially given that the companies may have a financial incentive in the model to curtail care as much as possible. Contracted entities are reimbursed by sharing in any savings they generate from restricting services, necessarily or not.
Similarly, the model will not be voluntary for providers participating in Medicare in the test model’s six states, creating an “involuntary burden,” the letter reads.
In a statement alongside the model’s release, Oz said that the program should protect Medicare beneficiaries from receiving “unnecessary and often costly procedures.”
Care denials will be reviewed by a clinician, and services that would pose a “substantial” risk to patients if delayed will be excluded from the model, according to a CMS website about the program. It’s not clear how the CMS plans to define such services.
The lawmakers asked Oz to respond to their questions by the beginning of September.
