Health Insurers Must Streamline Prior Authorization Decisions, New Rule Says
Industry News
Thursday, February 01 2024
(By Stephanie Armour) The Biden administration finalized requirements to streamline the process for doctors and patients seeking health insurance approval for medical care and treatments. The rule aims to shorten the timeline for the so-called prior authorization process to as little as 72 hours for many of the tens of millions of people who get their health insurance through Medicare Advantage, Medicaid or an Affordable Care Act health plan by automating some of the processing of the requests.
Plans would also have to share more information with doctors about the status of decisions and information on denials, with a turnaround time of seven calendar days for non-urgent requests. Prior authorization is among the most contentious processes in healthcare. Health plans require it before agreeing to pay for certain care to avoid unnecessary treatment and control costs. But doctors and patients loathe the process because it often involves filling out lots of paperwork and can delay care.
The process has become such an object of popular frustration that some major private insurers, such as UnitedHealth Group’s UnitedHealthcare and Cigna Group, have said they were rolling it back. Both Republicans and Democrats have urged the administration to finalize a prior authorization rule for people covered by Medicare Advantage, which are plans offered by insurers that administer the program for seniors and some people with disabilities.
Some of the new policies will take effect in 2026. Other provisions would start later to give health insurers and doctors time to build the automated electronic processes. After it was first proposed by the Centers for Medicare and Medicaid Services in December 2022, the rule faced some opposition from AHIP, the trade group for the insurance industry, which said the requirements would be expensive because health plans and doctors would have to install the software. AHIP on Wednesday said HHS’s Office of the Coordinator for Health Information Technology should swiftly require vendors to build prior authorization capabilities into the electronic health records. “We cannot afford to delay any further when it comes to implementing electronic prior authorization capabilities,” the group said.
The American Hospital Association, a trade group for the industry, applauded the decision and said it would “help alleviate significant burdens for patients and providers” in Medicare Advantage plans. CMS estimated that the requirements would lead to cost-saving efficiencies, saving doctor practices and hospitals more than $15 billion over 10 years.
Click Here For More Information
Plans would also have to share more information with doctors about the status of decisions and information on denials, with a turnaround time of seven calendar days for non-urgent requests. Prior authorization is among the most contentious processes in healthcare. Health plans require it before agreeing to pay for certain care to avoid unnecessary treatment and control costs. But doctors and patients loathe the process because it often involves filling out lots of paperwork and can delay care.
The process has become such an object of popular frustration that some major private insurers, such as UnitedHealth Group’s UnitedHealthcare and Cigna Group, have said they were rolling it back. Both Republicans and Democrats have urged the administration to finalize a prior authorization rule for people covered by Medicare Advantage, which are plans offered by insurers that administer the program for seniors and some people with disabilities.
Some of the new policies will take effect in 2026. Other provisions would start later to give health insurers and doctors time to build the automated electronic processes. After it was first proposed by the Centers for Medicare and Medicaid Services in December 2022, the rule faced some opposition from AHIP, the trade group for the insurance industry, which said the requirements would be expensive because health plans and doctors would have to install the software. AHIP on Wednesday said HHS’s Office of the Coordinator for Health Information Technology should swiftly require vendors to build prior authorization capabilities into the electronic health records. “We cannot afford to delay any further when it comes to implementing electronic prior authorization capabilities,” the group said.
The American Hospital Association, a trade group for the industry, applauded the decision and said it would “help alleviate significant burdens for patients and providers” in Medicare Advantage plans. CMS estimated that the requirements would lead to cost-saving efficiencies, saving doctor practices and hospitals more than $15 billion over 10 years.
Click Here For More Information