‘Broken System’ of Medicare Advantage Prior Authorizations Leads to Nursing Home, Hospital Woes

While prior authorization has a legitimate role in Medicare Advantage coverage, the practice has expanded to the point of negatively affecting care. This aspect of MA needs to be right sized, and likely through legislation, nursing home leaders said.

About 90%-plus of physicians, including those serving nursing home patients, have said that one or more of their patients have suffered significant harm because of delays tied to prior authorization, according to Dr. Bruce Scott, president of the American Medical Association (AMA).

“For 24% of these physicians, that delay has resulted in hospitalization, permanent disability or death – this is harming patients,” Scott said Tuesday at Sanford Health’s Rural Health Summit. Scott’s co-panelists were Zach Shamberg, president and CEO of the Pennsylvania Health Care Association (PHCA), and Ceci Connelly, president and CEO of the Alliance of Community Health Plans (ACHP). Corey Brown, senior vice president of government affairs at Sanford Health moderated the panel.

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Congress and federal agencies need to get involved, adding transparency to prior authorization denials so that nursing homes can appropriately appeal the denial, the leaders said. Legislation should require MA plans to use the latest form of technology to transfer documents needed for prior authorizations – in other words, no more faxes.

Legislation to curb prior auth requests

About 12 states have already put prior authorization reform in place, and there is pending legislation in 13 more states, Scott said.

“If the health plans are not willing to do it voluntarily, it’s going to be thrust upon them by legislators,” he said.

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Connelly said that congressional or other government interference in health care has in the past stifled innovation, due to little understanding of the nuances of different markets and different players in the MA space. But in terms of prior authorization, it’s first and foremost about safety, she said.

And, some MA health plans including Sanford Health Plan and Geisinger Health Plan are doing fewer prior authorizations than the larger national plans, she said. And if prior authorization is called for, patients and operators are getting a “yes” in real time for about 85% of requests with the use of AI, at least for Geisinger members in Central Pennsylvania.

ACHP is a national organization with nonprofit, community-based member health companies across 40 states and Washington, D.C.

“I would just encourage anybody who’s listening out there, find the right partners that are going to work with you to get that right care on the front end, and we’ll see these problems really start to decline everywhere,” Connelly said.

Still, MA more broadly is reaching a point where recalibration is needed, she said, as “publicly-traded behemoths” are rightly being scrutinized by the Senate Finance Committee, Centers for Medicare & Medicaid Services (CMS) and the Inspector General at Health & Human Services (HHS OIG).

“What’s happening on things such as risk adjustment, coding, marketing practices really call into question the motives for being in this program,” Connelly said of MA. “What’s going to happen to the nonprofit community plans that are running on margins of 1% or 2%, if they are lucky? We are at a very important juncture in public policy and the future of this public-private partnership.”

How prior auth tied into staffing shortage

Prior authorizations are also a main source of burnout among physicians, Scott said, with the average physician spending 12 hours a week filling out 43 prior authorization requests. Brown added that 95% of physicians have cited prior authorization issues as a reason for burnout – the team at Sanford struggles with prior auths day in and day out, he said.

“A survey in 2023 said that one in five positions are fed up and they’re looking to retire or quit within the next two years … add that to your workforce shortage,” said Scott.

Cigna denied 300,000 prior authorization requests within a two-month span, added Scott, noting concerns surrounding artificial intelligence and prior authorization requests.

“That’s 1.2 seconds per prior authorization request if you work 24 hours a day, seven days a week,” Scott said of the Cigna example. “There are multiple states where there are requirements that the actual clinical data be reviewed. 90%-plus of prior authorizations are ultimately approved, so even from the health plan perspective, this is a waste of resources.”

AMA met with major MA plans back in 2019, asking them to voluntarily correct prior authorization issues, but these requests have increased in frequency, and for smaller services, he said, including a request for $10 nasal spray and a routine CT scan.

“Prior authorization has grown too big, it’s out of control. We’re not arguing for it to be eliminated, but when 90-plus percent of the 300,000 that were denied is ultimately overturned on those that are appealed, you’ve got a broken system,” Scott said.

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