The Centers for Medicare & Medicaid Services (CMS) is looking to further crack down on the companies that administer the privatized version of Medicare.
On Nov. 26, CMS proposed new policies aimed at holding Medicare Advantage (MA) plans more accountable while removing “unnecessary barriers to care” for Medicare beneficiaries. The policies target “inappropriate” prior authorization practices, including the use of artificial intelligence (AI) in plan review processes.
“Our loved ones with Medicare deserve care that puts their interests first,” Xavier Becerra, secretary of the U.S. Department of Health and Human Services (HHS), said in a statement. “HHS is proposing to improve transparency, accountability, and consumer protections in Medicare Advantage and Part D plans so that everyone receives high-quality care.”
To achieve that, HHS wants to “remove barriers that delay care or deny people services and medications they need to be healthy,” the secretary noted.
Broadly, MA plans must offer the same coverage as traditional Medicare, with added supplemental benefits such as dental, vision and other add-ons. The MA market is dominated by just a handful of firms, led by UnitedHealthcare, Humana, Aetna, Kaiser Permanente and Blue Cross Blue Shield affiliates.
Home medical equipment (HME) stakeholders have increasingly had to operate in the MA landscape as enrollment has increased. Roughly 32.8 million people were enrolled in a Medicare Advantage plan in 2024, accounting for about 54% of the eligible Medicare population, according to Kaiser Family Foundation statistics.
This shift has created new headwinds for HME players, however, often in the form of red tape and lackluster reimbursement.
The same has been true for other types of health-care organizations as well.
A recent Senate report, for example, found that UnitedHealthcare’s prior-authorization denial rate for post-acute care rose from 10.9% in 2020, to 16.3% in 2021, to 22.7% in 2022.
When it comes to AI, multiple of the aforementioned MA businesses have been — or are actively being — sued for using algorithms to approve or deny care. This group includes Humana and UnitedHealthcare, both named in class-action lawsuits filed in 2023.
The nonprofit newsroom ProPublica also highlighted one example of AI in MA in early November, investigating how Evernorth uses EviCore’s algorithm to deny claims.
The new proposal from CMS takes a multifaceted approach to holding MA plans more accountable.
“Key proposals include defining the meaning of ‘internal coverage criteria’ to clarify when MA plans can apply utilization management, ensuring plan internal coverage policies are transparent and readily available to the public, ensuring plans are making enrollees aware of appeals rights, and addressing after-the-fact overturns that can impact payment, including for rural hospitals,” a CMS announcement detailed.
And that’s not all.
“In addition, efforts are underway that will allow CMS to collect detailed information from initial coverage decisions and plan-level appeals, such as decision rationales for items, services or diagnosis codes that will provide a better line of sight on utilization management and prior authorization practices, among many other issues,” the announcement continued.
CMS is also seeking to revise federal statutes to specifically build more guardrails around AI.
“Given the growing use of AI within the health-care sector, such as, but not limited to, AI-based patient care decision-support tools, we believe it is necessary to ensure that the use of AI does not result in inequitable treatment, bias or both within the health-care system, and instead is used to promote equitable access to care and person-centered care for all enrollees,” the announcement explained. “As such, we propose to revise 42 CFR 422.112(a)(8) to require MA plans to ensure services are provided equitably, irrespective of delivery method or origin, whether from human or automated systems. We also clarify that in the event that an MA plan uses AI or automated systems, they must comply with section 1852(b) of the Social Security Act and 42 CFR 422.110(a) and other applicable regulations and requirements and provide equitable access to services and not discriminate on the basis of any factor that is related to the enrollee’s health status.”
