New Legislation Could Make MA Prior Authorization Process Less Tedious

Publication Date: Nov 18, 2022

The end of what many healthcare groups call obstructive prior authorization (PA) practices that slow or even keep some patients from accessing desperately needed services and treatment, including lab testing, could be in sight—at least for some. On Sept. 14, the House of Representatives passed a bipartisan bill, the Improving Seniors’ Timely Access to Care Act of 2021 (H.R. 3173), that would make the PA process faster and easier for Medicare Advantage (MA) beneficiaries.

Based on the positive reception to companion legislation currently before the Senate, which had 45 co-sponsors as of Oct. 14, there’s a good chance that the act will pass there as well. For labs and other healthcare providers, the new legislation could mean a less cumbersome, difficult, and labor-intensive PA process, freeing up staff from unnecessary administrative work for MA beneficiaries and allowing them to focus on serving their patients.

Issues with the Current Prior Authorization Process

PA is essentially how insurers decide if a health service or product will be covered, and how much of the total cost they will reimburse if it is covered, based on medical necessity. According to a variety of healthcare organizations, including the American Society for Radiation Oncology (ASTRO) and the American Hospital Association (AHA), the current process is fraught with problems, such as:

Too much reliance on paper- and phone call-based methods for obtaining and providing information
Some insurers asking for additional, unnecessary documentation, leading to unwarranted denials
Lack of transparency and oversight

PAs are “currently one of the major problems in labs,” according to John (JD) Donnelly, chief executive officer (CEO) of healthcare technology company FrontRunnerHC. Donnelly cites a survey by the American Medical Association (AMA) on the impact of the current PA process that finds 93 percent of physicians reported care delays and 82 percent reported that it can sometimes lead to patients abandoning the recommended treatment. He adds that, because labs are a third party to doctors and patients, PAs are even more of a challenge. Unless they’re delegated by the health plan as a third party, labs must go back to the doctor to get the PA, having a short window to do so before a test specimen becomes unviable, Donnelly explains.

For providers in general, these PA issues only add extra administrative duties onto an already overburdened, understaffed workforce that is now struggling to recover from the pandemic, healthcare groups add. The new act, if passed by the Senate, would be an important move to help correct a “broken” process, they say.

“This legislation takes important steps to reduce the burden and complexity of prior authorization requirements imposed by Medicare Advantage plans,” said AHA executive vice president Stacey Hughes in a Sept. 14 statement. “These provisions will help Medicare patients access the care they need in a timely manner while reducing the strain on our already taxed health care workforce.”

Donnelly agrees the act should have a positive impact for those affected. “By reducing the number of prior authorizations that are required for this group, this can improve the collection rate for the labs and decrease the administrative burden for the physician, the lab, and, potentially, the patient,” he says.

How the Act Aims to Fix Prior Authorization Problems

The act aims to solve three key issues with the current process, requiring MA plans to take the following steps, according to a summary on Congress.gov:

Create an electronic PA program that complies with certain standards, such as being able to offer providers real-time decisions when those providers request routinely approved services and items;
Publish certain PA information each year, including plans’ average response time and percentage of requests approved; and
Meet other Centers for Medicare & Medicaid Services standards for speed and quality of PA decisions.

How Labs Will Need to Prepare

If the act passes, labs likely won’t need to do too much work to get ready for it, Donnelly says, as they typically know which tests require PA, so they’ll be able to modify their systems relatively quickly “to no longer spend needless time researching missing prior authorizations in relation to [their clients] affected by this bill.”

Donnelly estimates that about 40 percent of physicians have staff who work exclusively on prior authorizations. They also stand to benefit with the passing of this act.

Remaining Prior Authorization Problems

Though 500 healthcare organizations—including the American Clinical Laboratory Association—support the bill, at least one industry leader says that while the act does a fine job correcting some of the major problems with PA, it doesn’t fix all of them. In an opinion article in the American Journal of Managed Care, Siva Namasivayam, the CEO of Cohere Health, says the bill “does not go far enough in ensuring the transparency and efficacy of utilization management” and that it's simply seeking to digitize a flawed process.

“The truth of the matter is that utilization management, as it is currently constructed, misses opportunities to improve care quality and lower costs for patients, providers, and health plans,” Namasivayam writes. “Digitizing PAs does indeed accelerate the submission of requests and the clinical review process; however, it does not transform PA into a more valuable tool for care management or for reducing unnecessary variations in care. It does not help health plans improve either the quality or the value of the care their members receive.”

Some of Namasivayam’s solutions to these remaining problems include:

Rather than handling each request for service from a single patient visit separately, healthcare providers should be able to get several services, if they all relate to the same episode of care, approved at once during the PA process
More structured data for more efficient information-sharing between insurers and various providers
Better use of artificial intelligence and machine learning to help doctors make the best choices when it comes to choosing products and services for patients
More transparency for healthcare providers

Other Potential Issues with the Act

Donnelly also mentions that some of the wording in the act is slightly vague "so understanding the direct impact to the labs will be challenging.” He points out that, as with most legislation, how it is interpreted will be up to individual health plans, so, for example, a test that may be considered routine by one health plan may not be by another. So, the act may not entirely eliminate the confusion and complexity of the PA process.

However, Namasivayam points out, technology and automation can help address these complexities.

Donnelly agrees that technology will help. “We are also working on some development efforts with payers, providers, and labs to break down the traditional silos to better address the key elements that can hinder a clean claim, including in the area of prior authorization.”

Takeaway

While some issues may remain with the PA process, according to most healthcare providers, if the Improving Seniors’ Timely Access to Care Act becomes law, it should lead to a big improvement over the old way of doing things, speeding up Medicare Advantage patients’ access to critical services as well as evidence-based treatment.

Wrongfully Denied?

An April 2022 report from the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) showed that, out of a random sample of 250 PA requests denied by Medicare Advantage Organizations (MAOs), 13 percent actually met Medicare coverage rules. In addition, out of a random sample of 250 denied payment requests,18 percent met both MAO billing rules and Medicare coverage rules. According to the OIG, these denials were due to:

Use of “clinical criteria that are not contained in Medicare coverage rules;”
MAOs claiming that providers did not include enough documentation for their request to be approved, despite OIG reviewers finding the information provided was sufficient; and
System processing and human errors

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This article originally appeared in G2 Intelligence, National Lab Reporter, November 2022.

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