Prior Authorization Can Work in MA but Not Without Changes, Researchers Say

Prior authorization in Medicare Advantage (MA), used by payers and detested by providers, can be improved with a few policy changes, according to researchers in a recent opinion piece in JAMA.

MA covers more than 48% of Medicare beneficiaries, with 99% of MA plans requiring PA for medical services. Traditional fee-for-service Medicare has also implemented PA for a small number of services, such as home health and specific surgical procedures.

PA aims to reduce unnecessary health care spending or steer providers towards high-value care. However, it can also delay or deny needed care. It is also a factor in physician burnout; one survey found that 88% of 1004 physicians reported the “burden associated with prior authorization requirements was high or extremely high.”

Current efforts at reform include a bill passed by the House of Representatives last month and proposals to force the use of guidelines.

The Improving Seniors' Timely Access to Care Act would require CMS to report how often they use PA as well as the rate of approvals and denials, and would require HHS to set up a real time decision process for all services that are typically approved. The bill would also include an electronic PA processing system that health care organizations have wanted for years.

In their Viewpoint, researchers from the University of Colorado and John Hopkins University called for 3 other ideas:

• The relative benefits and costs of PA should be reviewed by CMS at a procedure level. For instance, insisting on PA for high-cost chemotherapy when no other options exist will not reduce waste, but it will create additional administrative cost.
• MA payers should report approval and denial rates to the CMS based on sociodemographic characteristics and by procedure type in order to evaluate whether PA is increasing health care disparities.
• Based on what payers report to CMS about their denial rates, CMS should audit the PA denials of plans with high-denial rates and compare plans with high denials to other MA plans.

In a statement, lead author Kelly E. Anderson, PhD, MPP, assistant professor at the University of Colorado Skaggs School of Pharmacy and Pharmaceutical Sciences, addressed the need for improvements when utilizing PA.

“There’s currently a lot of discussion about modernizing and monitoring the use of PA in Medicare to serve patients and the whole health care system better,” said Anderson. “We hope by describing the theoretical goals of prior authorization and where implementation is failing to meet these goals and the needs of Medicare beneficiaries, we can provide decision-makers a comprehensive accounting of the system and opportunities to improve it.”

For patients needing intensive treatments or major surgical procedures, delays can significantly affect the outcome of lifesaving treatments. In addition, denial of proper treatment may lead patients to seek out alternative treatments or procedures that are less effective, more risky and more costly long-term.

A 2018 investigation by the HHS' Office of Inspector General found that 56% of 140 MA audited contracts had inappropriately denied by PA requests and 45% of MA contracts had sent denial letters with missing information, including how to appeal the denial.

A follow up investigation in 2022 found that 13% of 12,273 PA requests were inappropriately denied. In addition, 75% of approximately 863,000 denial appeals were later approved.

For patients seeking out intensive treatments or major surgical procedures such as chemotherapy or limb amputation, delays of just several days can significantly affect the outcome of lifesaving treatments. denial of proper treatment may lead patients to seek out alternative treatments or procedures that are less affective, more risky and more costly long-term.

“By improving transparency and accountability of the process, prior authorization can better function as a tool to improve high-value care for Medicare beneficiaries,” researchers concluded.

Reference

Anderson KE, Darden M, Jain A. Improving prior authorization in Medicare advantage. JAMA. Published online October 3, 2022. doi:10.1001/jama.2022.17732