Federation of American Hospitals Pushed CMS to Include PA Denials In Quality Ratings

The Centers for Medicare and Medicaid Services (CMS) revealed their proposals for Medicare Advantage plans in 2025, but the Biden administration appears to be pulling punches that it otherwise let fly in non-election years.

CMS said on Wednesday that it expects the average benchmark payment for MA plans to decrease by 0.2% in 2025 although the Medicare program is expected to shell out an increase of $16 billion in reimbursements compared with 2024. According to STAT, next year will be the second year of phasing in the new risk adjustment coding system, which accounts for the anticipated drop in benchmark payment. Also, the “effective growth rate” projection, which measures spending increases for the traditional Medicare program, was lower than analysts thought it would be.

CMS is focusing on regulating new technologies used by MA insurers. In a notice to insurers on Tuesday, the agency reminded insurers that artificial intelligence and other algorithms may be used to assess coverage decisions, but those tools can’t be used to override medical necessity standards or benefits rules. Modern Healthcare reports that the agency also reminds MA plans that anti-discrimination laws also apply to them, which includes requirements for oversight that new software cannot contribute to health inequity.

Providers, on the other hand, want CMS to take further action to facilitate communication and payment between providers and MA plans. Last week, the Federation of American Hospitals (FAH) submitted a recommendation to the 2024 Measures Under Consideration (MUC) list that would add the reporting of prior authorization denial rates as a quality measure to the calculation of MA star ratings. According to Fierce Healthcare, the policy is titled Level 1 Upheld Denial Rate and is intended to financially discourage health plans from overusing prior authorization in patient coverage denials.

Inside Health Policy explains that FAH felt compelled to nudge CMS along into including the potential quality metric, which it hopes to see included as early as September. In the recent CMS interoperability and prior authorization final rule, insurers were required to publicly report their use of prior authorization and denial, but the MUC proposal pushes it further. From Tilithia McBride, FAH vice president of quality:

CMS stopped short of requiring the information be reported to them. Our measure would require information related to prior authorization appeals made to the MA insurer be sent to CMS and ultimately publicly reported and tied to MA star ratings.

In a press release, FAH President and CEO Chip Kahn explained the urgency behind the request:

Medicare Advantage plan members need to know the extent to which plans are denying or delaying care due to prior authorization abuse. FAH developed this important performance measure to shed light on Medicare Advantage plans’ practices that are baselessly denying or delaying care seniors need. We hope CMS will hold managed care companies accountable and increase transparency by including this measure in the next round of rulemaking.