July 6, 2023

A tug of war, right?

Clearly there’s a struggle in the health care industry, with so many combatants and such high stakes. Market forces running the insurance companies, providers swamped in paperwork and burning out, patients hurt by delays or being denied services outright, hospitals struggling or or even closing, top staff seduced by high salaries, drug prices off the charts, unions and employers buying into health plans that will save them money, and racial and social injustices playing a part in all of it. 

This post continues where I left off a couple of days ago, on just one aspect of the problem: prior authorizations. How do the players in this massive tug of war over priorities deliver and receive excellent medical services at a cost people can afford in work environments that don’t destroy people's souls. 

Myndshft's definition of the practice is pretty good:
a utilization management practice used by health insurance companies that requires certain procedures, tests and medications prescribed by healthcare clinicians to first be evaluated to assess the medical necessity and cost-of-care ramifications before they are authorized.
But not all of Medicare requires them.

Original Medicare Parts A and B hardly at all.  It’s assumed that providers ask Medicare to pay for what is medically necessary, and in fact, the 1965 SS act that created Medicare, didn’t authorize any form of these at all (according to the CMA).  It’s only subsequent legislation that allowed prior auths for some services and equipment. Saying this, Medicare started requiring a “pre-claim review” process for nursing homes in some states, ostensibly to combat fraud, though one report says 90% of the errors were not from fraud but from not enough documentation.

Medicare Part D is a whole other story, as the plans are not governmental, but offered competitively by non- and for-profit companies. They decide for themselves which drugs on their formularies will require prior auths and which won’t. More likely it's the Pharmacy Benefit Managers making decisions these days, not the companies themselves.

Medicare Part C – the Advantage plans (MAPs) – are also run by non- and for-profit companies, which in their capacity as middlemen between patient and government, have rightfully earned the contempt many people have for them. Their delays and denials of service have become scandalous, their procedures and paperwork burdensome to providers.
IMPORTANTLY, there’s not much information about how prior auths are used, how often it's denied, and how reviews affect patient care and cost (KFF, May 2022).
So we don't really know what’s going to happen with the new Aetna plan. But there’s enough literature out there from CMS, the AMA, and a slew of advocacy organizations to highlight what's gone wrong and where changes have to be made.

What's gone wrong

The flowchart in Myndshft's prior authorization guide (paraphrased below) is a good place to get some understanding of the process. They're talking about a prior auth for a lab test here:

All the manual procedures in this process, the rule changing, the individual requirements of the various plans, the monitoring from start to finish, and required notifications are simply overwhelming. The AMA claims that doctors in private plans, Medicare Advantage or not, spend 16 hours a week on prior authorizations.         

Apart from the absurd magnitude of these middleman procedures, other things have gone wrong.  According to a Dept of Health and Human Services study reported in April 2022:
  • Prior auths are sometimes delayed or denied in spite of meeting Medicare coverage rules (13%) or meeting both coverage and billing rules (18%). Some plans deny because of stricter criteria than Medicare itself uses, or ask for more documentation than Medicare.
  • Most denials in their sample were caused by human errors in manual processing and system errors in the software (e.g., incorrect programing).
  • Some denials were reversed after a patient filed an appeal –  I read somewhere else that only 11% of patients go to the trouble – while others were reversed when the plan itself found it had made an error.

But can anything be done?

While Medicare for All lumbers its way through Congress, people are calling for change in the systems we have now. In May 2022, KFF advocated regulating everything having to do with prior authorizations and making them more transparent as well. Some progress, they say, has been made in at least the following areas:
  • CLINICAL COVERAGE:  As a case in point, California now requires companies to use criteria “consistent with generally accepted standards of care and ... developed by a nonprofit association for the relevant clinical specialty.” It’s unfortunate, thought, that KFF says state laws like this wouldn't apply to employer-sponsored plans, nor would they, I assume, for retiree plans.
  • TRANSPARENCY is apparently gaining momentum. There’s a House bill requiring Advantage plans to report which treatments need prior auths, and to give %s of approvals, denials, and appeals.  This kind of reporting had already been written into the ACA, but alas and alack, according to KFF, it's been largely un-implemented. 
  • SETTING STANDARDS for prior auths. For example, the ACA had already banned them in emergency care. A new Michigan law now standardizes methods and demands transparency reporting. What interests me is the new “gold card” laws, whereby health plans have to waive prior auths requested by doctors with a track record of approval. Believe it or not, the first one seems to have been enacted in Texas, of all places (discussed here). 
  • ADMINISTRATIVE REFORMS.  A bill that passed the House last fall – H.R. 3173 “Improving Seniors Timely Access to Care Act” would amend Title XVIII of the SS Act (which created Medicare in 1965) “to establish requirements with respect to the use of” prior auths in Advantage plans, including electronic submission, attachments, real-time decisions, declaring which ones would be routinely approved, data collection, transparency, etc.  Impressive: it has 326 co-sponsors, but too early for champagne.  It’s been sitting in not one but two committees for a couple of years ... 

I'm sure I wont be seeing Medicare for All in my lifetime, but I like that doctors associations  and legislators are trying to fix some of the scandalous parts of Advantage plans as we know them, even if the shareholders and a lot of bad actors are contaminating the battleground. 

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