The practices of the nation’s commercial insurance giants – tactics such as stringent prior-authorization requirements – have increasingly come under scrutiny.
In turn, members of Congress and federal health care regulators have called for drastic reform. Those calls for action are now starting to see progress, which could mean a more streamlined reimbursement landscape for home medical equipment (HME) stakeholders in the not-too-distant future.
America’s Health Insurance Plans (AHIP), the national trade association for the health insurance industry, on June 20 announced a series of commitments focused on improving the prior-authorization process across commercial insurance, Medicare Advantage (MA) and Medicaid managed care.
“Building on health plans’ existing efforts, these new actions are focused on connecting patients more quickly to the care they need while minimizing administrative burdens on providers,” the announcement explained.
Several insurance groups have joined the initiative, including Centene (NYSE: CNC), Cigna Group (NYSE: CI), Elevance Health (NYSE: ELV), Humana (NYSE: HUM), Aetna, UnitedHealthcare and a long list of Blue Cross affiliates, among others.
“The American health care system must work better for people, and we will improve it in distinctive ways that truly matter,” Aetna President Steve Nelson said in a statement. “We support the industry’s commitments to streamline, simplify and reduce prior authorization.”
Aetna is part of CVS Health (NYSE: CVS).
“We will go beyond prior authorization, building a health-care experience for people we serve and introducing solutions that improve navigation and advocacy for Aetna members,” Nelson continued.
A commitment from payers
In a 2024 survey from the American Medical Association, more than one-quarter of doctors surveyed said that prior authorization led to a serious adverse event for a patient in their care.
And it has become a more common roadblock for patients trying to access the care they need. In 2023, Medicare Advantage plans processed 49.8 million prior-authorization requests, up from around 1.4 per enrollee in 2020 to 1.8 in 2023, according to Kaiser Family Foundation statistics.
“The health-care system remains fragmented and burdened by outdated manual processes, resulting in frustration for patients and providers alike,” AHIP President and CEO Mike Tuffin said in a statement. “Health plans are making voluntary commitments to deliver a more seamless patient experience and enable providers to focus on patient care, while also helping to modernize the system.”
The insurers that support AHIP’s new prior-authorization pledge specifically promised to take six key actions. Those actions include:
– Standardizing electronic prior authorization, partly to support faster turn-around times, by Jan. 1, 2027
– Reducing the scope of claims subject to prior authorization, with demonstrated reductions by the start of next year
– Ensuring care continuity when patients change plans
– Better communicating explanations of prior-authorization determinations while including guidance on potential next steps, including appeals
– Expanding real-time responses
– Ensuring medical review of non-approved requests
All six of those bulleted items in AHIP’s prior-authorization pledge have presented historical pain points for HME companies, though some are more pressing or operationally burdensome than others.
“These measurable commitments – addressing improvements like timeliness, scope and streamlining – mark a meaningful step forward in our work together to create a better system of health,” Kim Keck, President and CEO of the Blue Cross Blue Shield Association, added. “This is an important foundation to address bigger problems together, at a time when technology and interoperability can deliver real improvements to patient experience.”
Pressure from Washington
U.S. Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr., along with Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz, M.D., met with health insurer leaders to discuss the prior-authorization pledge on June 20.
Early on after his confirmation, Oz declared there would be “a new sheriff in town,” referring to problematic practices within the MA program.
“Thank you to the insurance companies for making these commitments today,” Kennedy said in an HHS announcement. “Americans shouldn’t have to negotiate with their insurer to get the care they need.”
While the six-pronged pledge is a step in the right direction, it’s important to note the commitment is entirely voluntary.
“This is not legislated,” Oz said in a related call with members of the media. “This is an opportunity for the industry to show itself. Participation is voluntary, but by the fact that three-quarters of the patients in the country are already covered by participants in this pledge, it’s a good start, and the response has been overwhelming – gratifyingly so.”
