In the United States, payers use prior authorization (PA) as a cost-containment tool to reduce payment for medically unnecessary or inappropriate patient care. Despite its laudable policy goals, increasing scrutiny targets the use of PA for creating administrative burdens on providers and delays in patient care. Providers report that the regulatory burdens of PA exceed those for claim audits, appeals, compliance with the No Surprises Act and COVID-19 Provider Relief Fund reporting.
While the Biden Administration’s proposed reforms have helped tackle some problematic payer PA practices that prevent timely access to needed care, more needs to be done to reduce the administrative burden on providers and improve the patient experience.
In case you missed it: CMS issues final rule implementing PA changes for Medicare Advantage (“MA”) plans
On April 5, 2023, the Centers for Medicare & Medicaid Services (“CMS”) issued its 2024 MA and Part D final rule1, applicable to coverage beginning January 1, 2024, finalizing regulatory changes that aim to streamline PA processes:
- PA approvals for a course of treatment must be valid “for as long as medically necessary and reasonable” to avoid care disruptions;
- MA plans must provide a minimum 90-day transition period when a patient undergoing treatment switches to a new MA plan during which the new plan is prohibited from requiring a new PA for the active treatment; and
- MA plans must review their PA policies annually to ensure all processes align with traditional Medicare coverage guidelines.
While these changes are encouraging for provider organizations who have long advocated for PA reform, R1 recognizes that further rulemaking and Agency action is needed to streamline the PA approval process, establish determination timeframes, and ensure that plans are held accountable for following new requirements.
CMS proposes shortened timeframes yet fails to address payer shortcomings
On December 13, 2022, CMS released a proposed rule2 that will require MA plans and other impacted payers to streamline PA processes and improve the electronic exchange of health data by 20263. If finalized, the rule would mandate payers to facilitate the electronic exchange of PA requests and determinations and provide shorter timeframes for payers to make and provide notice of PA decisions. While CMS’ proposal would help ease the long wait times for PA determinations and reduce administrative burden on providers, there are gaps in the proposed rule that CMS did not address, such as transparency of retrospective PA denials by payers and establishing mechanisms to hold payers accountable for noncompliance.
R1 provided a formal response to CMS’ proposed rule (summarized below) identifying opportunities to improve the regulatory framework, designed to preserve the agency’s policy goals while minimizing negative impacts to patients and providers.
- CMS should shorten the timeframe for standard PA determinations from seven to three calendar days, and the timeframe for expedited PA determinations from 72 to 24 hours. R1 believes the proposed timeframes should be shortened beyond CMS’ proposal to better account for existing technology and other solutions payers currently use to achieve faster determinations. For example, some payers advertise near-instantaneous determination times yet needlessly delay determinations.
- CMS should expressly prohibit retroactive denial practices by payers. The act of retrospectively denying beneficiaries’ service coverage after an initial approval defeats the entire purpose of requiring providers to go through the burdensome PA process.
- CMS should implement strong incentives to reward good payer behavior and disincentives to deter poor payer practices. This is necessary to both deter delays in patient care and to ensure payers are held to the same standards as providers. R1 urged CMS to consider alternative measures to incentivize payers to comply with PA requirements, including:
- Requiring default approvals of PA requests when payers exceed the timeframe for response;
- Requiring payers to cover the cost of patient responsibility when payers exceed the timeframe for response; and
- Financially penalizing payers who make bad faith requests for additional information to unnecessarily extend the PA timeframe.
The R1 Regulatory Team provides a wealth of CMS news and information.
Read on for more expert information.
The future of PA for providers
While the new requirements proposed by the current administration are a good start, providers should continue to advocate for further PA reform. Enhancements would not only improve the patient experience and treatment outcomes but decrease the time and unnecessary administrative burden providers currently face.
R1 understands the increasingly complex regulatory environment and the related challenges our customers experience navigating these issues and strives to advocate for providers by submitting comments backed by data-driven arguments and intentional recommendations.4 R1 is proud to be a leader and advocate for policies that align with our mission–to reduce the friction that’s holding healthcare back and improving the patient financial experience.
Key takeaways
- PA’s intended purpose of evaluating medical necessity has evolved into a drain on provider resources requiring reform.
- Significantly shortened PA timeframes would reduce practice burden for providers while upholding the Biden Administration’s push for health equity and improved patient outcomes.
- Required eligibility and benefits confirmation from payers would lead to improved patient care quality and treatment completion.
- Failure to timely issue PA determinations should penalize payers to reduce delays that could result in patient harm.
1 CMS, Final Rule, 88 Fed. Reg. 22120 (Apr. 12, 2023), available at https://www.govinfo.gov/content/pkg/FR-2023-04-12/pdf/2023-07115.pdf..
2 As part of CMS’ rulemaking process, the agency releases its proposed rules prior to finalization and publication in the Federal Register. These rules typically improve current policies and regulations or implement new measures that affect providers and individuals partaking in CMS programs. The public is offered a chance to comment on proposed rules; comments are considered and may be incorporated into the agency’s final regulation.
3 CMS, Proposed Rule, 87 Fed. Reg.76,238 (Dec. 13, 2022), available at https://www.govinfo.gov/content/pkg/FR-2022-12-13/pdf/2022-26479.pdf.
4 R1’s comment on the proposed rule (available at https://www.regulations.gov/comment/CMS-2022-0190-0700) included a recommendation that PA determinations include flexibility for changes in a treatment plan. In the final rule published several weeks after our comment was submitted, CMS stated that for Medicaid Advantage plans, “an approval granted through PA processes must be valid for as long as medically necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patient’s medical history, and the treating provider’s recommendation.”
Author Bio: Content Written by R1’s Regulatory Team
