Biden administration pushes prior authorization reform in Medicare Advantage plans

Hospitals and physicians have said they have grown increasingly frustrated by delays in approval for treatment in Medicare Advantage plans.

The Biden administration is taking another crack at reducing what it calls the inappropriate use of prior authorization in Medicare Advantage programs.

On Tuesday, the Centers for Medicare & Medicaid Services introduced a new Medicare Advantage rule with more provisions aimed at reducing some headaches in pre-approval from payers. The steps come as part of the same rule that would also extend Medicare and Medicaid coverage for popular anti-obesity medications, a provision which has gained widespread national attention.

Under its proposal, the CMS says it aims to make coverage policies more transparent and would compel Medicare Advantage plans to ensure patients are aware of rights to appeal denials. The agency is also proposing guardrails designed to ensure insurers don’t use artificial intelligence as a barrier to approving treatment.

Meena Seshamani, MD, CMS deputy administrator and director of the Center for Medicare, acknowledged the difficulties some Medicare Advantage enrollees are facing as they seek treatment.

“We continue to hear from people enrolled in Medicare Advantage who are having difficulty accessing the care they need and are entitled to, and CMS remains focused on removing these barriers,” Seshamani said in a statement.

“Whether it’s difficulty navigating options, being able to afford the lifesaving medications you are prescribed by your doctor, or receiving the inpatient or rehabilitation care you need to get well, no senior or person with disabilities on Medicare should be having these challenges,” Seshamani said.

Hospitals and health systems have been pushing for prior authorization reforms in Medicare Advantage plans and are encouraged by the CMS proposals, said Ashley Thompson, senior vice president of public policy analysis and development for the American Hospital Association.

“The AHA commends CMS for taking important steps to increase oversight of 2026 Medicare Advantage plans to help ensure enrollees have equal access to medically necessary health care services,” Thompson said in a statement. “The AHA has previously raised concerns about the negative effects of certain Medicare Advantage practices and policies that have the potential to directly harm patients through unnecessary care delays or outright denial of covered services.”

The hospital association lauded the CMS for aiming to prevent insurance companies from using coverage criteria that are more onerous than traditional Medicare and can make it harder for enrollees to get Medicare-covered services.

Thompson also welcomed the proposed CMS guardrails to insurers’ use of artificial intelligence in prior authorization plans. The American Hospital Association has cited AI as a key factor in the rise of denials from insurers, saying companies are using the technology to reject claims automatically, including some that should be approved.

In introducing the rule, CMS cited data from MA plans that said they overturn 80% of decisions to deny claims when they are appealed.

But the agency points to a glaring problem: Most people don’t appeal the denial, assuming it simply won’t be covered. The CMS said less than 4% of denials are appealed, suggesting many more claims that are denied could in fact be approved if patients and providers challenge them.

The hospital association and other healthcare advocates have pushed for reforms as Medicare Advantage plans gain more popularity. More than 30 million Americans are enrolled in Medicare Advantage plans. More than half of all Medicare beneficiaries are enrolled in Medicare Advantage plans, Thompson noted.

Nisha Hammel, vice president of reimbursement policy & population health at AHCA/NCAL, said the proposed rule would offer some important improvements, but CMS needs to ensure accountability.

"We appreciate CMS for taking important additional steps forward in strengthening the oversight of plan internal coverage criteria and establishing parameters for the use of AI,” Hammel said in a statement. “These actions are essential as seniors and their caregivers continue to face monumental challenges related to coverage denials.”

Healthcare providers say they’ve seen more problems getting approval for treatment in Medicare Advantage plans, and lawmakers have also pushed legislation to streamline the process.

Healthcare advocacy groups are pushing Congress to approve legislation to revamp the prior authorization process in Medicare before the congressional session concludes at the end of the year.

The legislation would require insurers to make more timely decisions on requests for treatment. Insurers would also have to disclose how often they’re approving and rejecting requests for treatment. Lawmakers in both parties have shown support for the legislation, but a similar measure failed to pass Congress two years ago, and healthcare groups fear a similar fate is possible this year.

The facet of the Medicare Advantage rule that gained the most attention in the general public is the proposal for Medicare and Medicaid programs to cover drugs used to treat obesity.

The proposal, if enacted, would allow 3.4 million Medicare beneficiaries and 4 million people with Medicaid to potentially gain access to anti-obesity drugs, AJMC reports.

However, with President-elect Trump taking office in January, it’s uncertain if his administration would finalize the rule expanding coverage of anti-obesity drugs.

The CMS Medicare Advantage rule is slated to be published in the Federal Register on Dec. 10. Comments on the rule must be submitted by Jan. 27, 2025.