Despite past setbacks, lawmakers push to reform Medicare Advantage plans

Medicare Advantage plans have gained millions of consumers, but doctors and hospitals have denounced insurance companies for waiting or refusing to sign off on treatments.

U.S. Sens. Roger Marshall, a Kansas Republican and a doctor, and Mark Warner, a Virginia Democrat, have sponsored a bill to streamline prior authorization in Medicare Advantage plans.

Lawmakers in Congress have heard those complaints, and now they are taking another crack at revamping the process known as prior authorization in Medicare Advantage plans. Critics say long waits to get approval from insurers are hurting patients and adding to the financial pressures on hospitals and doctors.

U.S. Sens. Roger Marshall, a Kansas Republican and a doctor, and Mark Warner, a Virginia Democrat, are sponsoring legislation to reform prior authorization in Medicare Advantage plans, and they have plenty of company. More than 40 senators, Republicans and Democrats alike, have signed on as co-sponsors of the bill, known as the Improving Seniors’ Timely Access to Care Act. Lawmakers have sponsored a similar House bill.

“Prior authorization is the number one administrative burden facing physicians today across all specialties,” Marshall said in a statement supporting the bill.

Lawmakers have tried to pass similar legislation in recent years, and despite some strong backing, they haven’t been able to get the legislation through both houses of Congress. The House of Representatives approved a similar bill in 2022, but the Senate didn’t pass it.

Nonetheless, there’s strong interest in the legislation and growing concern about delays in approvals from Medicare Advantage plans. More than 32 million Americans, representing more than half of Medicare beneficiaries, use those plans.

‘The most egregious’

Under the legislation, Medicare Advantage plans would have to make decisions more quickly to authorize treatments, and the legislation calls for establishing an electronic prior authorization process.

Medicare Advantage plans would also have to report to Congress how often they are denying approval for some treatments. Plans would also have to disclose how they are using artificial intelligence in approvals.

A majority of doctors (61%) say they’re worried that AI is leading to more denials of approval, or could spur more delays, according to an American Medical Association survey.

Insurance companies say prior authorization remains an essential mechanism to control costs and to avoid procedures that may not be medically necessary. Doctors and hospitals say too often, delays and denials are hurting patient care. Nine of ten doctors say prior authorization hurts patient care, and the vast majority (82%) say delays in approval have led to patients giving up on treatment, according to a 2024 survey from the AMA.

Hospitals say they are spending billions of dollars needlessly battling claims that should have been authorized, and often end up being approved. Nearly 70% of claim denials are reversed, and nearly $18 billion was spent unnecessarily on battles over paying claims in 2023, according to an analysis by Premier Inc.

Physicians have denounced prior authorization for years, but many hospitals and doctors are growing frustrated by the denials involving Medicare Advantage plans.

Dr. Soumi Saha, senior vice president of government affairs at Premier, Inc., pointed to the rising use of prior authorization in Medicare Advantage plans in a panel discussion at the ViVE Conference in February. Among Medicare Advantage plans, 30.5% of claims called for pre-approval in 2023, compared to 25% in 2022.

“A lot of our data said that MA plans were the most egregious when it came to denials of prior authorizations,” Saha said.

‘Unnecessary delays’

Mehmet Oz, MD, the new administrator of the Centers for Medicare & Medicaid Services, has spoken very positively about Medicare Advantage plans. Oz has suggested that he would like to see Americans have the option of entering multi-year agreements with Medicare Advantage plans, as opposed to signing annual agreements.

U.S. Sen. Bill Cassidy, a Louisiana Republican and a physician, pressed Oz on problems with prior authorization during a Senate confirmation hearing in March. Cassidy cited a surgeon who said faster approval for a procedure would have led to an easier recovery for the patient, and less cost. Oz acknowledged that delays are a problem.

“Pre-authorization is misused in some settings,” Oz said. “There needs to be a mechanism to confirm that procedures are worthwhile.”

Oz said he’d like to see prior authorization limited to a smaller number of procedures, and a more advanced authorization, similar to approval for credit card transactions.

Even with strong support for Medicare Advantage plans, Saha said at the ViVE panel that she sees growing recognition in the federal government about problems with denials or delays in getting approval for patients.

“What's interesting is that the government is also starting to realize how bad of a problem this is,” Saha said. “So while we're going to still see policy that's in favor of MA and move the needle that way, I think we're going to start seeing more policy making that starts holding plans accountable.”

The American Hospital Association is backing the legislation. Stacey Hughes, executive vice president of American Hospital Association, sent a letter of support to the bill’s co-sponsors in late May.

“Inefficient prior authorization requirements are a pervasive problem among certain plans in the Medicare Advantage (MA) program that result in delays in care and add financial burden and strain to the health care system,” Hughes wrote.

U.S. Sen. Mazie Hirono, a Democrat from Hawaii and one of the co-sponsors of the legislation, said the legislation would reduce long waits for approval, for providers and patients.

“Seniors with Medicare Advantage plans should not have to endure unnecessary delays when seeking medical treatment, and sometimes even life-saving care,” Hirono said in a statement.