{"id":10504,"date":"2025-09-22T00:46:14","date_gmt":"2025-09-22T04:46:14","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=10504"},"modified":"2025-09-22T00:46:14","modified_gmt":"2025-09-22T04:46:14","slug":"trump-administration-tiptoes-into-testing-medicare-pre-authorization","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=10504","title":{"rendered":"Trump administration tiptoes into testing Medicare pre-authorization"},"content":{"rendered":"
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Traditional Medicare plan holders have typically not had to wait for prior authorization before receiving medical treatment.<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n
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Until now.<\/p>\n

The\u00a0Centers for Medicare & Medicaid Services (CMS) recently announced<\/a>\u00a0a new\u00a0program\u00a0<\/a>to test prior authorization requirements for certain services in six states starting Jan. 1.<\/p>\n

The states \u2014 New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington \u2014 will apply prior authorization evaluations to more than a dozen services.<\/p>\n

Read on Yahoo Finance<\/a><\/strong><\/em><\/p>\n

CMS says the pilot program is intended to root out\u00a0\u201cfraud, waste, and abuse,\u201d<\/a>\u00a0but as Medicare Advantage members know well, prior authorization can lead to frustrating delays in care.<\/p>\n

How it works<\/strong><\/h2>\n

CMS will contract with private companies to deploy \u201cenhanced technologies, including artificial intelligence (AI)\u201d to conduct the authorization reviews.<\/p>\n

It won\u2019t apply to in-patient or emergency services or treatments \u201cthat would pose a substantial risk to patients if significantly delayed,\u201d according to a CMS press release. Specific services that will require prior authorization are skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy.<\/p>\n

There is genuine concern about the costs of some of these items and services. A recent New York Times article<\/a>\u00a0highlighted pricey medical products, including paper-thin bandages made of dried bits of placenta, for Medicare patients.<\/p>\n

The Biden administration had approved a plan to limit Medicare\u2019s coverage of the bandages, known as skin substitutes, which were reportedly being sold for roughly $10,000 per square inch. An updated\u00a0Medicare policy<\/a>\u00a0proposes setting a significantly lower payment rate.<\/p>\n

The new prior authorization program \u201cis focused on reducing wasteful spending, which is an important goal for Medicare,\u201d Jeffrey Marr, a health economist at the Brown University School of Public Health, told Yahoo Finance.<\/p>\n

\u201cI expect that the use of prior authorization in this model is likely to reduce the overall level of Medicare spending,\u201d he said. \u201cSelecting potentially low-value services is a critical part of setting up a well-functioning prior authorization system.\u201d<\/p>\n

The key question for CMS to address is whether prior authorization can work in traditional Medicare in a way that does not deny or discourage high-value care that improves beneficiaries\u2019 health, Marr said.<\/p>\n

One red flag: \u201cThe companies that will make the prior authorization decisions will be paid a percentage of the savings that they generate for Medicare. This creates an incentive for participants to deny a high share of services,\u201d he said.<\/p>\n

Prior authorizations are part of the Medicare landscape<\/strong><\/h2>\n

How often do prior authorizations pop up for seniors with Medicare and Medicare Advantage plans?<\/p>\n<\/div>\n

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In traditional Medicare, services that often require prior authorization include certain outpatient hospital services, non-emergency ambulance transport, and durable medical equipment.<\/p>\n

For 2023,\u00a0under 400,000\u00a0<\/a>prior authorization reviews for traditional Medicare beneficiaries were submitted to CMS, according to KFF data.<\/p>\n

Medicare Advantage plans, which are offered by private insurers, are a different story. Almost all Medicare Advantage enrollees \u2014 99% according to KFF research<\/a>\u00a0\u2014 must receive prior authorization for some services. These are typically higher-cost services, such as inpatient hospital stays, skilled nursing facility stays, chemotherapy, and other drugs.<\/p>\n

That common practice, combined with AI used to scan these requests, is a thorny issue.<\/p>\n

\u201cPrior authorization processes and requirements, including the use of artificial intelligence to review requests, may result in administrative hassles for providers, delays for patients in receiving necessary care, and in some instances, denials of medically necessary services, such as post-acute care,\u201d according to Jeannie Fuglesten Biniek, co-author of the KFF report.<\/p>\n

To allay that fear, CMS noted in the announcement: \u201cWhile technology will support the review process, final decisions that a request for one of the selected services does not meet Medicare coverage requirements will be made by licensed clinicians, not machines.\u201d<\/p>\n

The prior authorization program will not alter Medicare coverage or payment rules, for now, but other services may be added later.<\/p>\n

There has been pushback.<\/p>\n

More than a dozen members of Congress sent a\u00a0letter<\/a>\u00a0on Aug. 7 to CMS administrator Dr. Memet Oz to urge him to \u201cput patients and providers first by cancelling\u201d the model and requested more details about how the program will be implemented.<\/p>\n

\u201cThe use of prior authorization in Medicare Advantage shows us that, in practice, [this proposal] will likely limit beneficiaries\u2019 access to care, increase burden on our already overburdened healthcare workforce, and create perverse incentives to put profit over patients,\u201d the lawmakers wrote.<\/p>\n

Have a question about retirement? Personal finances? Anything career-related? Click here to drop Kerry Hannon a note.<\/em><\/strong><\/a><\/p>\n

A pivot in MA authorization<\/strong><\/h2>\n

In an odd juxtaposition, a week prior to trumpeting this new Medicare pre-authorization model, the administration\u00a0announced<\/a>\u00a0that it had a non-binding commitment from insurance plans to reduce prior authorization in Medicare Advantage.<\/p>\n

In late June, the Department of Health and Human Services announced\u00a0an initiative<\/a> coordinated with companies including Aetna, Blue Cross Blue Shield, Humana, and UnitedHealthcare, to streamline prior authorization processes for patients covered by Medicare Advantage. Under the initiative, electronic prior authorization requests would become standardized by 2027.<\/p>\n

\u201cPitting patients and their doctors against massive companies was not good for anyone,\u201d US Health and Human Services Secretary Robert F. Kennedy, Jr. said in a statement. \u201cWe are actively working with industry to make it easier to get prior authorization for common services such as diagnostic imaging, physical therapy, and outpatient surgery.\u201d<\/p>\n

Oz added: \u201cThese commitments represent a step in the right direction toward restoring trust, easing burdens on providers, and helping patients receive timely, evidence-based care.\u201d<\/p>\n