Intense Scrutiny on Prior Authorization Practices Could Bring New Reforms

As legislation to address it languishes in the lame-duck Congress, prior authorization (PA) remains under intense scrutiny. Adding to previous accounts of provider and consumer frustration with PA, two recent reports — one from the Senate and one from ProPublica — offer new evidence of insurers and their contractors denying PA requests to cut costs. Physicians have long been wearied of PA battles, noting it negatively affects patient care and contributes to burnout. The continued scrutiny raises the question: What lies ahead for PA reform, especially as the U.S. transitions to a new presidential administration? On Oct. 17, the Senate Homeland Security Permanent Subcommittee on Investigations released a report on PA denials of post-acute care for Medicare Advantage (MA) enrollees, based on a review of more than 280,000 pages of documents obtained from insurers. The report alleged that Humana Inc., UnitedHealthcare, and CVS Health Corp.-owned Aetna denied PA requests for post-acute care at greater rates than other PA requests. UnitedHealthcare and CVS denied PA requests in 2022 at three times the rate of the companies’ overall requests; that same year, UnitedHealthcare’s post-acute denials were 16 times higher. The report detailed ways in which all three insurers used algorithms and other internal processes to instruct reviewers to deny PA requests in order to maximize savings. “[The data] suggests Medicare Advantage insurers are intentionally targeting a costly but critical area of medicine — substituting judgment about medical necessity with a calculation about financial gain,” the report’s authors wrote. In late October, ProPublica published a report alleging EviCore by Evernorth, a PA approval company owned by The Cigna Group, uses its proprietary AI algorithm to maximize PA denials to save costs for insurance companies. The company promises insurers that for every dollar they spend on EviCore’s services, they would pay $3 less for care, per the report, which was based on interviews with current and former EviCore employees. They claimed the company’s algorithm could be adjusted to flag more PA requests for human review, thereby increasing chances of denial. (EviCore did not respond to a request for comment.) These reports of “denials for dollars,” as ProPublica put it, are a “scandal” that should be generating more outrage, says Michael Abrams, managing partner at consulting firm Numerof & Associates. After reading the Senate subcommittee report, Abrams was struck by “the descriptions of these employees sitting around a table talking about how we can maximize our savings. When they started to get lawsuits, they turned their attention to AI to figure out how to minimize the lawsuits,” he tells AIS Health, a division of MMIT. “It’s great that they’re very creative in their use of technology, but where do the ethics fall into this?” Denials for post-acute care for MA members are “definitely overused,” says Carrie Graham, director of the Medicare Policy Initiative at Georgetown University’s Center on Health Insurance Reforms. “We’ve seen evidence that it’s overused and it’s denying some of the most vulnerable people the care that they need after a hospitalization.” Insurers and companies that provide PA review can focus on savings because they don’t have to pay attention to outcomes, Abrams notes. “They get paid the same whether the patient dies in post-acute care or not, whether they die when they walk out of the building or not — it’s all the same to them. That’s wrong,” he says. “That is very simply what is wrong with our entire health care system — that the outcome and the experiences of the patient don’t count for much. In this situation, it counts for so little that it can be ignored in its entirety.” Is Federal Legislation Next? Some improvement might come from the Improving Seniors’ Timely Access to Care Act, which has been bouncing around both chambers of Congress since at least 2021. After failing in 2023 due to a high score from the Congressional Budget Office, the bill to smooth the PA process for MA enrollees was reintroduced in the Senate on June 12. Elements of the bill include establishing an electronic PA process, requiring greater transparency into the PA process and the data used for determinations, and further streamlining and expediting decisions for commonly approved items and procedures. It also would codify the Advancing Interoperability and Improving Prior Authorization Processes rule that CMS released in January. The rule includes a 72-hour turnaround time for urgent PA requests and a seven-day turnaround for nonurgent requests in MA. Whether passing the bill by the end of the year is a priority for this lame duck Congress remains to be seen, Graham tells AIS Health. However, Abrams says this is a “toothless piece of legislation that is simply going to add to the cost burden for insurers and give bureaucrats from CMS more work to do.” It might curb some of the worst abuses, but “it doesn’t make any great demands on [insurers],” he says. “This bill is so watered down that I’m sure that the lobbyists for the insurers and their subcontractors had a lot to do with it — and they’re OK with it because they pretty much got what they want, which is to cut out anything of real consequence,” Abrams tells AIS Health. To curb any PA abuses in the commercial sector, states could introduce their own legislation. Several states have enacted PA reform, while around 30 states are considering such measures. These laws include time frames for decision turnaround; transparency around the information used to make determinations, including decision criteria; and disclosing information about the services subject to PA. It is possible more states will enact PA reform legislation, Abrams says. However, the potential for 50 different versions of PA rules would be “extremely resource-intensive — and the last place that needs pointless resource intensity is health care and insurance,” he remarks. ‘Gold Card’ Exemptions Could Help Graham mentions the Getting Over Lengthy Delays in Care As Required by Doctors Act of 2023, also called the GOLD CARD Act, which was introduced in the House on July 27, 2023. The bill would exempt MA physicians from PA requirements if at least 90% of their requests from the preceding year were approved. The bill was referred to the House Subcommittee on Health, where it appears to have stalled. However, UnitedHealthcare enacted its own gold card program on Oct. 1, which granted PA exemptions for physicians with approval rates of at least 92% and at least 10 eligible PA requests for two consecutive years. The program “recognize[s] provider groups who consistently adhere to evidence-based care guidelines,” according to the insurer. Health Care Is a ‘Joint Production’ Because inputs from health care organizations and insurance companies contribute to patient outcomes, Abrams notes that the care delivery experience should be presented as such to patients. “The health care experience should be positioned as, ‘This is being brought to you by XYZ Healthcare System and ABC Insurance Company — a joint production,” he says. “The rules that are being used by the insurance company have a very concrete impact on the outcome.” Abrams cites a June 18 survey from the American Medical Association in which 93% of respondents noted that PA caused bad outcomes for patients. “Every experience that every person has in connection with any medical care is a joint production of the provider and the organization. It needs to be positioned as such so that people understand that it’s not all about the caregiver,” he says. “The insurance company should be part of the picture. Otherwise, it always feels like they’re getting off scot-free.”