The Federation of American Hospitals (FAH) proposes a groundbreaking quality measure for the Medicare Advantage (MA) program, seeking to compel health plans to disclose prior authorization denial rates. The recommendation, part of the 2024 Measures Under Consideration list, aims to address concerns about the misuse of prior authorization systems by health plans, fostering accuracy in coverage decisions and reducing unnecessary denials. The FAH’s Level 1 Upheld Denial Rate, approved by a 13-1 vote, emphasizes transparency, reducing patient stress, and complementing existing measures in the MA star ratings program. The proposal underscores FAH’s commitment to accountability, urging CMS to adopt this measure and increase transparency in managed care practices.
In response to growing concerns about the opaque nature of Medicare Advantage (MA) plans’ prior authorization practices, the Federation of American Hospitals (FAH) presents a transformative proposal within the 2024 Measures Under Consideration list. The FAH’s Level 1 Upheld Denial Rate introduces a crucial quality measure, compelling health plans to disclose specific prior authorization denial rates. With an overwhelming 13-1 approval vote, the proposal aims to enhance transparency, reduce patient stress, and complement existing measures in the MA star ratings program. The call for accountability underscores the urgency of addressing arbitrary denials and promoting accuracy in coverage decisions. FAH President Chip Kahn urges the Centers for Medicare & Medicaid Services (CMS) to adopt this measure, fostering a more transparent and patient-centric managed care system.
The Measures Under Consideration list serves as a platform for providing feedback to the Centers for Medicare & Medicaid Services (CMS) regarding potential quality and efficiency measures for government health programs. The FAH’s proposal, titled Level 1 Upheld Denial Rate, seeks to introduce a performance measure within the MA star ratings system, focusing on the percentage of initial MA plan denials that are upheld, overturned, or partially overturned.
The proposal, approved by a 13-1 vote, with additional conditions recommended, underscores the FAH’s commitment to transparency and reducing the burden on patients. The committee believes that such a measure could alleviate patient stress, complement existing Level 2 measures in the MA star ratings program, and contribute to overall program efficiency.
Chip Kahn, President and CEO of FAH, emphasized the importance of transparency in revealing the extent to which Medicare Advantage plans may be denying or delaying care due to prior authorization abuse. The FAH hopes that CMS will adopt this performance measure in the next round of rulemaking to hold managed care companies accountable and increase transparency in the system.
A 2021 MedPAC analysis found that MA plans overturned initial denials 80% of the time, indicating a high rate of reversals. Additionally, a 2022 Office of Inspector General report revealed that 13% of denials could have been covered by traditional Medicare. Despite these figures, FAH argues that arbitrary denials currently face no consequences, with no reporting or measurement of the initial delay or denial of care. This lack of accountability may encourage insurers to prolong decisions, affecting patient outcomes.
The MA star ratings program is crucial for evaluating health plans, ranging from one to five stars based on various criteria assessing performance and care outcomes. The annual score directly impacts the financial payout plans received from CMS, influencing their operational capabilities and marketing timelines.
The issue of prior authorization has become a focal point of criticism from policymakers, advocacy groups, providers, and patients alike. Critics argue that these practices are overly restrictive, operating against the best interests of patients and extending beyond standard cost-cutting measures. Delays in obtaining approvals, coupled with a complex appeals process, contribute to patient frustration and impede timely access to necessary care.
To address some of these concerns, a recent rule finalized in January mandates health plans to provide prior authorization decisions within three days for urgent requests and seven days for standard requests, starting in 2026. While seen as an improvement, some groups, such as the American Medical Group Association (AMGA), believe that these timelines should be even shorter, with standard requests taking 48 hours and urgent requests just 24 hours.
Jerry Penso, M.D., President and CEO of AMGA, stressed the urgency of expediting prior authorization decisions, stating that the three-day timeline for urgent requests is not sufficiently expedited. Shortening these timelines is seen as crucial to preventing patient limbo and addressing system backlogs caused by slow-moving prior authorization processes.
Amidst these challenges, MA plans continue to be heavily marketed to seniors, promising robust benefits and comprehensive coverage. However, it is noted that MA networks are often more limited for beneficiaries compared to traditional Medicare.
The FAH’s groundbreaking proposal for a Level 1 Upheld Denial Rate within the Medicare Advantage (MA) program marks a significant stride towards transparency and accountability. With a resounding 13-1 vote in favor, the proposal addresses concerns about the misuse of prior authorization systems by compelling health plans to disclose denial rates. This measure not only aims to reduce patient stress but also complements existing measures in the MA star ratings program. The FAH’s call for accountability and transparency serves as a crucial step in discouraging arbitrary denials and promoting accuracy in coverage decisions. As the Measures Under Consideration comment period remains open, stakeholders have the opportunity to shape the future landscape of the MA program by endorsing measures that prioritize patient well-being and fair healthcare practices.