Prior Auth – Summer 2023 Status

What Happened to the Legislation Last Fall?

Legislation that would have created a “real-time decision” process and streamlined some prior authorization efficiencies for Medicare Advantage plans cleared the U.S. House with strong bipartisan support.

The legislation stalled in the Senate when the Congressional Budget Office (CBO) estimated that the prior authorization reform would come at a cost to the government. Congress was not able to find an offset to pay for the package, which led to its death:

“By placing additional requirements on plans that use prior authorization, we expect H.R. 3173 would result in a greater use of services. We expect Medicare Advantage plans would increase their bids to include the cost of these additional costs, which would result in higher payments to plans.”

Three CMS Proposed Rules: Do The Proposals Replace the Legislation?

The Biden administration proposed three rules, which were greeted with great enthusiasm from Democrats and Republicans, and the proposals would replace almost every part of legislation. (Regulators do not worry about costs; they don’t have to find offsets to pay for new regulations.)

Proposed Rule 1

Advancing Interoperability and Improving Prior Authorization Processes Proposed Rule – Issued December 6, 2022. This proposed rule would focus on the electronic prior authorization program, updated time frames (seven days) and transparency requirements (percent of PA requests approved, list of services that are required, etc.).

Click here for CMS’s fact sheet on the December 6 proposed rule.

Proposed Rule 2

Contract Year 2024 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs Proposed Rule – Issued December 14, 2022. This proposed rule would implement the benefit protections section.

Proposed Rule 3

Adoption of Standards for Health Care Attachments Transactions and Electronic Signatures, and Modification to Referral Certification and Authorization Transaction Standard Proposed Rule – Issued December 19, 2022. This proposed rule would implement transaction standards, including clinical attachments.

What About Real-Time Decisions?

The primary component of the legislation that is missing from the proposed rules is real-time decision making, and these are the aspects of the legislation that led to the greatest portion of the CBO score.

The legislation would require the Secretary to create a system in which it determines what Medicare Advantage services should be subject to “real-time decisions.”

Click here