Prior authorization remains a serious roadblock that stands in the way of Medicare beneficiaries and the services they need.
That’s according to a new report released Oct. 17 from the Senate Homeland Security Permanent Subcommittee on Investigations. The 54-page report explores the growth of Medicare Advantage (MA) and prior authorization requirements, while also examining the systems and processes of the biggest MA players, including UnitedHealth Group (NYSE: UNH), Humana (NYSE: HUM) and CVS Health (NYSE: CVS).
UnitedHealth Group and CVS Health are the parent entities of insurers UnitedHealthcare and Aetna, respectively.
“Every day, doctors evaluate thousands of seniors recovering from falls, strokes and other ailments, and enter a recommended course of treatment into an online portal, or in some cases feed it into a fax machine,” the report states. “But whether the requested service is determined to be medically necessary is a decision that belongs to people at the other end of the line. This is prior authorization. And for beneficiaries of Medicare Advantage, the alternative to traditional Medicare in which private companies contract with the government to administer health plans, it has become not just a bureaucratic maze, but a potential threat to their health.”
The topic of MA and prior-authorization red tape is important to the home medical equipment (HME) industry for a variety of reasons.
Above all, however, is the simple fact that more Medicare beneficiaries are in the MA program than ever before – a trend that is projected to continue.
According to statistics from the Kaiser Family Foundation, about, 32.8 million people were enrolled in a Medicare Advantage plan in 2024. That was more than half – or 54% – of the eligible Medicare population, and about $462 billion of total federal Medicare spending.
Increasingly, HME stakeholders have had to face the harsh realities of working within an MA landscape, which includes payment delays, service rationing and other challenges.
The Oct. 17 Senate report called out several of those challenges around prior authorization with specificity.
When it comes to post-acute care, in particular, UnitedHealthcare, Humana and CVS each denied prior-authorization requests “at far higher rates” than they did for other types of care between 2019 and 2022, according to the report.
UnitedHealthcare’s prior authorization denial rate for post-acute care surged from 10.9% in 2020, to 16.3% in 2021, to 22.7% in 2022. During this time, it was implementing multiple initiatives to automate the process, the report notes.
The report offered several other data points highlighting similar trends at the other MA giants as well.
To ensure access to services and lessen prior-authorization challenges, the report suggests the Centers for Medicare & Medicaid Services (CMS) begin collecting prior-authorization information broken down by service category. Such a move could shed more light on HME-MA difficulties, if it’s carried out.
Additionally, the report encourages CMS to carry out targeted audits of insurers with questionable and significant increases in prior-authorization denial rates.
Chip Kahn, president and CEO of the Federation of American Hospitals, said in a statement that the report amplifies what health-care providers in the Medicare space have been saying for years.
“The report today puts an exclamation point on what we’ve been saying for a long time: Patients are being hung out to dry by MA plans’ delays and denials,” Khan said. “It’s past time that legislators and regulators hold plans accountable and protect patient care.”
