Despite voluntary actions, CMS continues with PA reforms
The Centers for Medicare and Medicaid Services (CMS) has been active in reining in prior authorization at health plans and the reforms continue.
In 2024, CMS proposed and finalized a rule that put major restrictions on the ability of Medicare Advantage (MA) plans to use PA for inpatient procedures and post-discharge care. The rule mandates that providers have the call as to whether a patient needs inpatient admission and what after-care is required.
Upon returning to office, the Trump administration called health plans to the table to “volunteer” to make PA reforms across business lines or they would face action by the federal government. So, they were in essence “voluntold” to make the reforms, which they obediently did. In a major announcement shortly after, a group health plans and the two main lobbies (representing 75% to 80% of covered Americans) said they would phase in sweeping changes in all lines of business, including commercial, in 2026 and 2027. These changes reduce the number of services subject to PA, streamline processes and across-plan standardization for others, introduce real-time electronic PA (ePA) for these services, and honor PAs from prior plans to ensure continuity of care. Better transparency and reporting were also committed.
The two insurance lobbies, main insurer trade group AHIP and the Blue Cross Blue Shield Association, said that leading health plans continue to make significant progress to adopt a standardized approach for providers submitting ePA requests for the majority of medical services. About 88% of Aetna’s prior authorizations already adhere to the standards, with UnitedHealthcare and Cigna saying their standards will apply to more than 70% of their PA volume by the end of the year. This week, UnitedHealthcare said it would eliminate authorization requirements for 30% of services that previously required payer approvalby the end of the year, with services included ranging from certain outpatient surgeries to diagnostic tests.
Notwithstanding these voluntary prior authorization reforms, CMS is acting again. In 2024 as well, CMS issued a rule that required ePA, transparency, reporting, and tighter turnaround timeframes in MA, Medicaid, and the Exchanges for medical services by 2026 or 2027 (depending on the reform). Turnaround times are 7 days for standard requests and 72 hours for urgent ones. Now, a new proposal from April extends the non-pharmacy prior authorization rule requirements to retail drug requests. In the case of retail drugs, urgent requests would have to be fulfilled in government programs within 24 hours, with all others in 72 hours. Reforms go into effect either in 2027 or 2028 depending on the reform. Retail drug ePA is very prevalent in the industry overall.
However, CMS and Capitol Hill are still beating the drum on PA. Just this week, CMS Administrator Dr. Mehmet Oz published a blog where he featured PA limits and urged continued reforms. His blog began: “A common practice imposed by health insurers on patients and providers is their intrepid need to second-guess clinician treatment decisions by requiring prior authorizations before paying a claim. The current prior authorization process creates unnecessary delays for patients, burdens health care providers with excessive paperwork, and erodes trust between payers and health care providers, even though all share the same goal: delivering high-quality patient care.”
There, too, is new proposed bipartisan legislation aimed at strengthening MA plan oversight to ensure seniors receive timely and high-quality care. The bill aims to address barriers to coverage and treatment, including:
- Strengthening oversight and accountability for plans failing to meet compliance standards
- Increasing transparency and streamline prior authorization processes
- Aligning coverage criteria with traditional Medicare
- Reducing administrative burdens through real-time, automated systems
- Expanding access to post-acute care providers
Many people see me as a Grinch on the issue of PA. I do think health plans have been pennywise and pound foolish over the years by focusing too much on PA as opposed to care management. But I continue to believe that PA is important to control costs and ensure managed care functions correctly. It takes excess out of the system. Plans should have oversight of providers, some of whom may prescribe too many services in a still transactional-payment-focused system.
Responsible PA is fair lest we take the managed care out of managed care. That seems to be the goal of CMS and lawmakers.
#priorauthorization #managedcare #healthplans #providers
— Marc S. Ryan
