Congress Moves to Limit Prior Authorization Protocols of Medicare Advantage Plans

Prior authorization has been a perennial source of friction between payors and providers. While payors have a legitimate need to ensure program integrity and manage utilization of covered health services, requiring prior authorization often imposes significant administrative burdens on providers and delays patients from receiving the care they need. The AMA has done an effective job of keeping the issue on the agenda, including via a 2020 survey in which two of five polled physicians reporting that prior authorization delays access to necessary care, with 15 percent reporting it always happens, 39 percent saying it happens often and 40 percent saying it happens sometimes. Payors have also been feeling the heat from regulators and now Congress in the form of a new bill curbing the use of prior authorization for Medicare Advantage patients. Here’s a quick look at what’s been going on.

The Regulatory Effort to Curb Prior Authorization

In the Trump administration’s final months, CMS issued a final rule requiring Medicaid, the Children’s Health Insurance Plan (CHIP), Qualified Health Plans (QHPs) and other plans—but not Medicare Advantage plans—to build application program interfaces (APIs) to support prior authorization and data exchange. The APIs would make payor authorization requirements more transparent and easy to maneuver by enabling providers to determine in advance the documentation each payor requires, streamline documentation processes and facilitate the electronic transmission prior authorization information requests and responses.

The final rule would have also reduced the wait time for prior authorization decisions by requiring payors to issue decisions on urgent requests within 72 hours and non-urgent requests within seven calendar days. Payors would have also had to provide a specific reason for any denial, to give providers some transparency into the process.

Immediately upon taking office, the Biden administration imposed a freeze on last-minute regulatory initiatives adopted by its predecessor, including the prior authorization rule. The administration hasn’t yet announced a decision on the rule, leaving its present in limbo and its future uncertain.

The New Prior Authorization Bill

In 2019, a bill imposing similar restrictions for Medicare Advantage plans was introduced into Congress but didn’t get far. But early this month (May 2021), a bipartisan group led by Rep. Susan DelBene (D-Wash.), Mike Kelly (R-Pa.), Ami Bera (D-Calif.) and Larry Bucshon (R-Ind.) reintroduced the bill believing it might get over the finish line this time. Specifically, the bill requires Medicare Advantage plans to establish electronic prior authorization programs and provide “real-time decisions” for certain services to be designated by the HHS secretary.

Parallel to the Trump regulation’s requirement of Medicaid, CHIP and other covered plans, the bill would also require Medicare Advantage plans with prior authorization requirements to boost transparency by:

• Submitting annual reports to HHS listing which of their services require prior approval, as well as data on how many requests were approved, denied and overturned after initial denials in the previous plan year;
• Reporting the average and median amount of time between the submission of a prior authorization request and a determination from the plan; and
• Making the above information available to their contract providers along with a statement of their criteria for making prior authorization determinations.

Takeaway

“The majority of the healthcare community agrees that prior authorization needs to be reformed,” noted Congresswoman DelBene in a statement. “This bipartisan legislation creates sensible rules for the road and will offer transparency and oversight to the prior authorization process.” Where the bill differs from the Trump rule is in requiring payors to create an API on their website. While they do promote interoperability, APIs are fairly controversial due to privacy concerns. As a result, key players in the healthcare industry have resisted their adoption.