Hospitals call for Medicare Advantage prior authorization overhaul

Hospitals and health systems are demanding that the CMS set national rules for how insurers manage prior authorization and payment for pre-approved claims in Medicare Advantage.

In response to the Trump administration’s request for information on its “Patients over Paperwork” initiative to cut Medicare red tape, hospitals complained that prior authorization is a complicated system where payment isn’t guaranteed even if they follow all the steps insurers lay out for them.

They want national standards so that clinicians will know what they have to do to get treatments approved regardless of the insurer, and that they will get paid.

“You follow the payer’s rules, you think, Wow that was an easy process, you thought you have checked all the boxes to get the procedure paid, only to be denied,” wrote Laurie Pierce, director of patient financial services for 25-bed North Valley Hospital in Montana.

She complained also that the appeals process is burdensome. On average she has had to appeal unpaid Medicare Advantage claims at least three times. Even if an appeal is successful, it can take six months to a year to get paid, Pierce noted.

For Dr. Timothy Dellit, chief medical officer for University of Washington Medicine, the rules around prior-authorization simply need to be clearer. Medicare insurers should state “when and why pre-authorization is not needed,” he said.

He also made two specific suggestions for a technological overhaul of the prior authorization process. The CMS should prod electronic health records vendors to allow clinicians to enter codes for coverage determinations and prior-authorization requirements into the records.

Secondly, EHRs could also have documentation requirements within the system to refer to the CMS’ guidelines before submitting prior-authorization requests, Dellit said.

The hospital-insurer battle over prior authorization has simmered for years, but this year it has been highlighted as an issue for congressional lawmakers by provider lobbyists.

Insurers are watching for how any potential regulatory changes could affect them, as the Blue Cross and Blue Shield Association made clear in its own comment letter to the CMS. The group argued against standardization, which it claims could undermine how insurers’ tailor their coverage for specific patient groups.

“While we support the goals of reducing provider burden and improving interoperability, we caution against efforts to standardize criteria across the industry,” BCBSA’s vice president of policy Kris Haltmeyer wrote. “Standardization could end practices supporting appropriate variations in member populations.”

While Haltmeyer acknowledged hospitals’ disgruntlement over prior-authorization, he defended the process as one of the “important tools plans use to promote safe, effective and lower-cost treatments.”

The BCBSA, America’s Health Insurance Plans, the American Hospital Association, the American Medical Association and the Medical Group Management Association and others have joined forces to discuss prior-authorization issues.

House lawmakers introduced legislation to overhaul the process. The bill from Reps. Suzan DelBene (D-Wash.) and Mike Kelly (R-Pa.) would establish an electronic system for approvals, cut the number of preauthorizations for routine services and eliminate them entirely for “medically-necessary services performed during pre-approved surgeries or other invasive procedures.”

In response to Patients over Paperwork, Florida-based AdventHealth asked the CMS to revise EMTALA regulations.

EMTALA, or the Emergency Medical Treatment and Active Labor Act, requires emergency departments to take anyone who comes through their doors. Hospitals and emergency physicians complain about unintended consequences of the mandate, but there’s no sign policymakers or regulators want to re-examine the law.

AdventHealth suggested the CMS could expand its “emergency triage, treatment and transport” model, which lets ambulance care teams direct patients to a hospital emergency department or urgent care clinic, to emergency physicians and physician assistants.

“Patients presenting with cold symptoms, for example, could be triaged and connected with a co-located urgent care clinic, saving them the expense of an ED visit,” Advent Health’s vice president of advocacy Michael Griffin wrote. He added that the CMS could consider additional guardrails to make sure patients don’t get neglected.

He also recommended a convening of a technical advisory group to review and update EMTALA regulations.

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