AHA Calls for Medicare Advantage Inclusion in Prior Authorization Rule


The American Hospital Association (AHA) has asked CMS to include Medicare Advantage organizations in its proposed rule that would streamline the prior authorization process and reduce patient care delays.

In December 2020, CMS released a notice of proposed rulemaking about improving prior authorization, following past administrative and clinician struggles. If the rule is finalized, there would be a set method for identifying if a procedure needs prior authorization, submitting the prior authorization form and supporting documents, and receiving the payer’s response.

The rule introduces a new set of requirements for payers to follow when it comes to prior authorization processes. CMS named Medicaid and Children’s Health Insurance Program (CHIP) managed care plans, state Medicaid and CHIP fee-for-service plans, qualified health plan issuers on the federal marketplace, and Medicare fee-for-service plans as organizations that must abide by the new regulations.

The new requirements would speed up the prior authorization process and reduce care delays for beneficiaries.

CMS did not include Medicare Advantage plans in the rule and AHA has asked the agency to revise that decision.

Around 22 million individuals receive healthcare coverage through a Medicare Advantage plan and the Congressional Budget Office expects this number to increase significantly by 2029, AHA stated.

“In order to promote procedural improvements and prevent negative health outcomes associated with delays in care for all beneficiaries, we urge CMS to require MAOs to adhere to the requirements set forth in this proposal,” AHA wrote in the letter. “Including them also would reduce administrative burdens and costs as providers would have less variation among health plans.”

AHA also asked CMS to create guidelines for determining when a prior authorization is needed. Payers often request prior authorization for services and treatments that have already received a high volume of successful authorizations in the past.

For this reason, AHA urged CMS to alter the proposed rule and require Medicare Advantage plans to consider a service authorized if the provider’s authorization approval history for that service is 90 percent or higher. Providers would still have to request prior authorization for services that have not met that standard, AHA explained.

According to the organization, this modification would reduce patient care delays and ease clinician burden.

AHA also recommended that CMS require payers to deliver prior authorization responses within 72 hours for non-urgent services and 24 hours for urgent services. Under current CMS policy, Medicare Advantage plans can take up to 14 days to respond to prior authorizations.

“A prior authorization request is often the final barrier between a patient and the implementation of their provider’s recommended treatment, making judicious processing of such transactions extremely important,” AHA stated. “Research has shown that prior authorization procedures cause significant delays in care, frequently leading to negative clinical outcomes for patients.”

Patients may have to wait days or weeks in hospital beds before the payer processes the prior authorization for their treatment, which can negatively impact the patient’s health, increase hospital costs, and reduce hospital admission availability.

In addition to the suggested rule amendments, AHA asked CMS to better track Medicare Advantage plans and their prior authorization use.

According to AHA, Medicare Advantage organizations have a history of misusing prior authorization. A report from the Office of the Inspector General found that 75 percent of Medicare Advantage prior authorizations and claims denials were overturned when providers appealed them between 2014 and 2016.

Medicare Advantage plans frequently deny justified hospital requests for patient admission, causing the provider to decide whether they should admit the patient and submit a claims appeal or delay patient care while completing a prior authorization appeal. This process can lead to financial and health repercussions for the patient, the Association stated.

AHA wants CMS to collect distinct prior authorization data from payers so that they can monitor their activity and prevent misuse. The organization also suggested CMS use the data to identify and address plans that have unusually high rates of prior authorization use.

Revising and finalizing the proposed rule to include Medicare Advantage plans and improve prior authorization processes would help protect Medicare Advantage beneficiaries and reduce clinician burden, AHA concluded.

For More Information: aha calls for medicare advantage inclusion in prior authorization rule