Medicare Advantage plans need more oversight, lawmakers say

As Medicare Advantage plans continue to gain more consumers, a bipartisan group of senators is looking for more federal oversight of the plans.

U.S. Sens. Elizabeth Warren, Catherine Cortez Masto, Bill Cassidy, and Marsha Blackburn are seeking more data on Medicare Advantage plan denials and prior authorization requests.

In a letter to the Centers for Medicare & Medicaid Services, the senators urged the agency to collect and release more data about Medicare Advantage plans and how often they are issuing prior authorization requests and payment denials. The lawmakers cited “shortfalls” in the CMS’ collection of data on Medicare Advantage plans.

U.S. Sens. Elizabeth Warren (D-Mass.), Catherine Cortez Masto (D-Nev.), Bill Cassidy (R-La.), and Marsha Blackburn (R-Tenn.), sent the letter last week to CMS Administrator Chiquita Brooks-LaSure.

“For the first time, over half of all Medicare beneficiaries are choosing to enroll in MA plans. However, in the last few years, federal watchdogs have released numerous reports examining concerning trends in MA,” they wrote in the letter.

They cited a 2022 report from the Office of the Inspector General in the Department of Health and Human Services which pointed to inappropriate denials. The report, which examined denials in 2019, found 18% of Medicare Advantage payment denials and 13% of prior authorization requests met the criteria for Medicare coverage. The HHS watchdog found the services would likely have been covered under traditional Medicare.

The lawmakers say such findings warrant more scrutiny.

“Without publicly available plan-level data on prior authorization requests by type of service, timeliness of determinations and reasons for denials; claims and payment requests denied after a service has been provided; beneficiary out-of-pocket spending; and disenrollment patterns, policymakers and regulators are unable to adequately oversee the program and legislate potential reforms,” the lawmakers wrote.

While Medicare Advantage plans tout their ability to help seniors manage healthcare costs, the lawmakers say the government isn’t saving money. They pointed to a report from the Medicare Payment Advisory Commission that projects Medicare payments to MA plans in 2023 will end up $27 billion higher than if those seniors were enrolled in traditional Medicare.

The lawmakers are asking the CMS to collect and disclose the following data about Medicare Advantage plans.

• Prior authorization requests and denials by type of service. Lawmakers want CMS to provide more information on the health status and types of beneficiaries who are being denied, and more information on appeals.
• Timeliness of prior authorization decisions. While CMS has moved forward with measures to speed up decisions, the agency doesn’t collect data on how often MA plans seek extensions on decisions. Plans don’t have to disclose how long it takes to complete authorization requests.
• Justification of prior authorization denials. CMS collects data on the number of prior authorization denials, but not the reason for the denials. Without that data, regulators can’t determine if some of those denials were inappropriate, lawmakers say.

Hospitals and health systems have said they are growing frustrated with the rising number of denials from Medicare Advantage plans. Most hospital executives say they are seeing increased denials from all payers, but the problem is getting worse with Medicare Advantage plans, especially in areas where MA plans have larger market share, according to a report from Kaufman Hall.

The Medical Group Management Association said in March that 84% of its members have seen more prior authorization demands from Medicare Advantage plans over the previous 12 months.

Healthcare organizations have urged the federal government to enact measures to streamline the prior authorization process. Hospitals and health systems say they’re wary that MA plans will circumvent federal regulations and apply more stringent criteria for payment decisions.

Payers have said prior authorization is a necessary process to avoid unnecessary spending and procedures.

More than 31 million Americans are enrolled in Medicare Advantage plans, and insurers say consumers are choosing the plans because they enable seniors and those with disabilities to save money and get better access to care.

Still, Democratic and Republican lawmakers say they’re increasingly concerned by delays in Medicare Advantage due to prior authorization. In June, more than 300 members of Congress, Republicans and Democrats alike, asked the government to reform prior authorization in Medicare Advantage plans.