Podcast Recap: CMS Goes After Lengthy Prior Authorizations

Episode 75 of the FLATLINING Podcast

This week Matthew and Ron take a quick look at a recent ruling from the Centers for Medicare and Medicaid Services (CMS) that puts stipulations on insurance companies on how to handle prior authorizations. Then, our team closes with an update on the Medicare fee schedule for 2024.

As discussed in depth on several occasions on the FLATLINING podcast, most notably the story of Dr. Dan Hurley, the process of requesting a prior authorization from an insurance company to deliver medical care is frustrating for physicians.  Matthew said that in response to this often bureaucratic, time-consuming, and possibly life-threatening process, there has been a growing number of lawsuits, some interest from the U.S. Congress, and now CMS has taken a step to address the issue.

Ron said the new rule requires the payers to respond to expedited prior authorization requests, for cases that are urgent in nature, within 72 hours.  They also must respond to standard requests within seven calendar days.  There are some additional requirements for reporting information about denials, and other additional metrics Ron said. He explained that these would be things like turnaround times, how frequently the insurance companies are denying procedures etc.

Matthew asked Ron for clarification about what plans this new rule will cover and Ron explained that this rule will only apply to Medicare Advantage, Medicaid, or the Exchange plans because these are funded by the federal government through CMS.  Ron explained that “Roughly half of the country, about 153 million people, are covered by either private or employer sponsored health insurance plans. None of this applies to them.” The reason, Ron said, is because without legislation, these rules won’t touch those types of plans. Not to take away from what CMS has done, he said. Both Ron and Matthew agree this is a step in the right direction.

To address the other half of the country not affected by this rule, Ron explained that Congress could pass legislation that address the self-insured plans. He said this could be attached to the Employment Retirement Income Security Act (ERISA), which has oversight on self-funded plans. Ron said that Congress could address fully insured plans but must be careful to not step into areas that the states have oversight responsibilities. Which means that individual states could do something for the fully insured plans.  In short, this approach is one of legislation versus regulation as in the case of CMS’s final rule.

Ron does have a couple of concerns, the first he said, note that the language says “They have to respond within 72 hours or seven calendar days. It doesn’t say they have to make a determination.” Ron goes onto share what doctors already experience, where insurers constantly request additional information before a determination and drag out the process. His second concern is how are these new rules are going to be enforced. Ron reminds us how the federal government has basically stopped enforcing the No Surprises Act as a good example of the lack of enforcement giving any teeth to legislation. Both Matthew and Ron discussed some of the recent situations where regulators have either chosen not to enforce or did not have the capacity to enforce regulatory or legislative rules aimed at helping patients and physicians.

The team discussed a joint statement released from a bipartisan group of legislators applauding CMS for acting on this topic. Although, as Ron points out, that this final rule was regulatory, and not legislative, and he encouraged legislatures to do more.

Ron thinks that the insurance companies see this new rule as a “minor inconvenience” because there was not any rallying against it. He said Medicare and Medicaid tend to have less of a problem with prior authorizations, and it is likely the payers see this as more of “parking ticket” rather than a “felony” he said.

After last week’s discussion about the 2024 Medicare fee schedule, Ron provided his assessment of where any rollback of the cut stands. Unfortunately, he said, the big chance for any elimination of the 3.37% cut was during the discussions on the recent Continuing Resolution (CR) that was passed to keep the federal government funded. He said in the past, the CR has included adjustments to the fee schedule, this time it didn’t. Ron’s recommendation is to file claims if you have been holding them and unfortunately, he thinks this cut will be what physicians will have to work with for the rest of the year, unless some stand-alone legislation changes it, which he said seemed less likely.

Ron wrapped up with lamenting on how two years in a row of Medicare fee schedule cuts have hurt physicians in an economic environment that has been rife with inflation and rising costs for running a practice. Both Matthew and Ron agreed that this topic is consistently on the fore front of physicians’ minds.

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