Health Care Matters | August 16, 2024
Growth of Prior Authorization Denials in Medicare Advantage
KFF published a report last week that summarized findings from an analysis of Medicare Advantage (MA) Prior Authorization Trends from 2018 to 2022. The main takeaways from the analysis indicated that from 2019 to 2022, the number of Prior Authorizations (PAs) increased from 37 million and 46 million which corresponded to an increase in Medicare enrollees – maintaining an average of 1.7% per Medicare enrollee. The share of full or partial denials of PA requests increased sharply from 5.8% in 2021 to 7.4% in 2022. About one in ten requests that were denied in 2022 were appealed and over 83% of those appeals resulted in overturning the initial denial. The trends reported represented an industry average but percentages varied greatly across insurers.
Why It Matters
Use and denial of PAs is under high scrutiny by the Office of the Inspector General (OIG) and CMS especially as payers invest in Artificial Intelligence to review and make determinations. The KFF report confirms the growth of PA denials, the role of AI, and the need for close monitoring. The report also draws awareness to how much PA denials can vary by MA plan. As MA enrollment grows, so too does the comparison with traditional Medicare, where there are no such requirements for prior authorization. As we compare more an more the cost, quality and patient experience of traditional Medicare versus MA, there's pressure to identify the net benefit to patients and tax payer for any differences between the two programs.
CMS Has Released a Final Procedural Notice for Transitional Coverage for Emerging Technologies
Last week CMS released a final procedural notice that outlined a Medicare coverage pathway designed to achieve more timely and predictable access to certain new medical technologies. The Transitional Coverage for Emerging Technologies (TCET) Pathway allows manufacturers to submit non-binding Letters of Intent 18-24 months prior to anticipated FDA marketing authorization. CMS will review up to five devices per year for TCET status.
Why It Matters
The TCET pathway was originally proposed by the Biden Administration in June of 2023. It responds to criticism from manufacturers that the time period between FDA breakthrough device designation and CMS coverage determinations can be up to five years. The TCET pathway provides a more efficient and transparent process for CMS coverage determinations. Industry insiders are pleased but state that it doesn’t go far enough citing the limit of 5 devices per year and the exclusion of breakthrough diagnostic technology that currently does not have a Medicare benefit category. In June of this year, the House Ways and Means Committee passed a more expansive bill that would automatically grant 4 years of Medicare coverage to any device designated as breakthrough from the FDA. That bill is currently not moving but indicates a policy gap between this finalized TCET pathway and Congressional support for fast-tracking Medicare coverage for emerging technology.
What We Are Reading
States with Health Care Spending Targets Saw Accelerated Growth in 2021
Health Affairs article detailing how 8 states have established health care spending growth targets to slow spending growth.
WHAT WE ARE Excited about
CMMI is Seeking Virtual Submissions for the 2024 Rural Health Hackathon
CMMI is now seeking virtual submissions for the 2024 Rural Health Hackathon to solicit creative, actionable concepts to address rural health challenges. Interested participants should submit their concepts via the online form.
What we Are listening to
A Health Podyssey: How Cost Effectiveness Analyses Can Perpetuate Health Disparities
Health Affairs' Editor-in-Chief Alan Weil interviews Sanjay Basu of Waymark on his recent study that considers a potential risk of perpetuating health disparities with the continued utilization of cost-effectiveness analyses to inform health care and public health policy decisions.
