Republican and Democratic members of the House called for changes in how insurer-run Medicare plans manage the prior authorization process, following testimony from a federal watchdog organization about improper denials of payment for care.
About 18% of payment denials in a sample examined by the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) either met Medicare coverage rules or the rules of the insurance plan.
As such, they should not have been denied, according to the OIG. That was the finding of an April OIG report, based on a sample of 2019 denials from large insurer-run Medicare plans.
Erin Bliss, an assistant inspector general with the OIG, appeared as a witness at a June 28 Energy and Commerce Subcommittee on Oversight and Investigations hearing to discuss this investigation and other issues with prior authorization and insurer-run Medicare, also known as the Advantage plans.
Most of these payment denials of appropriate services were due to human error during manual claims-processing reviews, Ms. Bliss told the subcommittee, such as overlooking a document, and to system processing errors, such as a Medicare insurance plan failing to program or update a system correctly.
In many cases, these denials were reversed, but patient care was still disrupted and clinicians lost time chasing clearances for services that plans already had covered, Ms. Bliss said in her testimony.
The April report was not the OIG’s first look into concerns about insurer-run plans inappropriately denying care through prior authorizations. The OIG in 2018 reported that insurer-run Medicare plans overturned 75% of their own denials during 2014-2016 when patients and clinicians appealed these decisions, overturning approximately 216,000 denials each year.
‘Numerous hoops’ unnecessary for doctors, patients
Lawmakers at the hearing supported the idea of the need for prior authorization as a screening tool to prevent unneeded care.
But they chided insurance companies for their execution of this process, with clinicians and patients often frustrated by complex steps needed. Medicare Advantage plans sometimes require prior authorization for “relatively standard medical services,” said Subcommittee on Oversight and Investigations Chair Diana DeGette (D-Colo.).
“Our seniors and their doctors should not be required to jump through numerous hoops to ensure coverage for straightforward and medically necessary procedures,” Rep. DeGette said.
Several lawmakers spoke at the hearing about the need for changes to prior authorization, including calling for action on a pending bill intended to compel insurers to streamline the review process. The Improving Seniors’ Timely Access to Care Act of 2021 already has attracted more than 300 bipartisan sponsors. A companion Senate bill has more than 30 sponsors.
The bill’s aim is to shift this process away from faxes and phone calls while also encouraging plans to adhere to evidence-based medical guidelines in consultation with physicians. The bill calls for the establishment of an electronic prior authorization program that could issue real-time decisions.
“The result will be less administrative burden for providers and more information in the hands of patients. It will allow more patients to receive care when they need it, reducing the likelihood of additional, often more severe complications,” said Rep. Larry Bucshon, MD, (R-Ind.) who is among the active sponsors of the bill.
“In the long term, I believe it would also result in cost savings for the health care system at large by identifying problems earlier and getting them treated before their patients have more complications,” Rep. Bucshon added.