Prior Authorization: New Approaches and Medicare Advantage Spotlight

It’s your Monday briefing on everything you need to know from last week in healthcare and prior auth. Last week, momentum built around a new prior authorization process that could shape the future of utilization management. A newly proposed Medicare Advantage bill in the Senate would require payers to receive prior authorization from CMS before being allowed to do the same to physicians.?

CPT Codes for Prior Authorization?

Dr. Alex Shteynshlyuger, director of urology at New York Urology Specialists, recently proposed to the American Medical Association (AMA) that prior authorization services be reported to insurance plans using a CPT code. The goal is to realign incentives and compensate physicians for the time spent on prior authorizations. Under this plan, prior auth services would be categorized as a time-based, Category 1 CPT code, indicating they are medically necessary and provide clinical benefit. While the proposal was withdrawn from the AMA panel meeting, it has sparked important conversations about the need for prior authorization reform.

What this means for payers and providers:

For payers:

• The proposed CPT code for prior authorization acknowledges payers' concerns about controlling costs and reducing fraud.
• However, it may lead to increased costs for insurers, as they would be required to reimburse physicians for time spent on prior authorization tasks.
• Payers may need to re-evaluate their prior authorization policies and processes to ensure they are efficient, transparent, and not overly burdensome for providers.

For providers:

• A CPT code for prior authorization would allow physicians to be compensated for the time and effort spent navigating the prior auth process, which currently goes uncompensated.
• This could help alleviate some of the financial strain and administrative burden that prior authorization places on providers.
• The proposal also aims to facilitate greater documentation and studies on how prior authorization affects patient care and outcomes, potentially leading to more data-driven decisions about when and where to require prior auth.

While the proposal still faces hurdles, including the need for CMS approval, it represents a growing momentum toward addressing the challenges posed by prior authorization. As stakeholders continue to discuss and collaborate on potential solutions, there is hope for a more balanced, efficient, and patient-centered approach to prior authorization in the future.

AMA Advocates for Transparency in Prior Auth Process and Decisions

The AMA continued their reporting on PA challenges and the changes they’d like to see. Recent CMS rules will increase prior authorization transparency for government-regulated health plans starting in 2026, but do not impact private payers. Thus, the AMA is pushing for greater transparency around prior authorization criteria and evidence-based guidelines, access to drug coverage information in EHRs, and more granular reporting of prior authorization data by health plans. State legislation and multi-stakeholder consensus statements have also aimed to improve transparency.

According to AMA President Jesse M. Ehrenfeld, MD, MPH, “when you get a denial of a request, [providers] often don’t know why. [They] don’t get told the reasoning behind the denial and it can take hours and hours to appeal a decision. And then sometimes [they] wait weeks or even months for a peer-to-peer consult.”?

“Increase transparency 100%,” proposes Dr. Chino, who has published research on cancer patients’ prior authorization experiences. “When I face a prior authorization barrier for someone and I know the mechanism for what they are denying, I’ll [know] we need to pivot immediately because I’ve already delt with them before, and I need to get another plan ready. So, it [transparency] actually facilitates me knowing what the next steps are to provide the very best care for the patient.”

Payers can address the demands of providers by implementing technology to streamline, digitize, and illuminate the prior authorization process. When decisions are evidence-based and transparent, all parties benefit from reduced conflict and administrative burden.

Medicare Advantage in the Spotlight:?

New proposed bill in senate:

Senator Sheldon Whitehouse (D-RI) has proposed requiring Medicare Advantage insurers to get prior approval from the Centers for Medicare and Medicaid Services (CMS) before imposing prior authorization requirements on doctors in accountable care organizations. Whitehouse questioned the logic of prior authorization and that it drives up healthcare costs due to lack of standardization to the tune of $200 billion annually. The proposed changes would support seniors and healthcare workers frustrated by the prior authorization process if passed. Health insurers are likely to fight back against the proposal, so the fate of the bill remains to be seen.

“No prior authorization without prior authorization”?

Senator Sheldon Whitehouse told the Senate Budget Committee last week, of which he is the chairman.

AHA Testifies on Prior Authorization in MA:

The American Hospital Association also testified to the Senate Budget Committee on the need to alleviate administrative burdens like prior authorization in healthcare. The AHA cited HHS OIG findings that MA plans are improperly denying large shares of prior authorizations and payments. AHA wants Congress to streamline and add controls to prior authorization under MA, increase audits of MA plans, create a provider complaint process, enforce penalties for non-compliant plans, clarify federal vs. state oversight roles, add prompt payment requirements, and support "gold carding" to exempt high-performing providers from prior authorization. AHA also backs standardizing claims attachments to reduce manual document transmission between providers and health plans.

Medicare Advantage Facing Challenges Despite Growth?

MA plan enrollment has soared, overtaking traditional Medicare. But critics argue MA plans are overpaid and inappropriately deny care to cut costs. A modest 3.7% average rate increase for 2025 and changes to CMS's Star ratings emphasizing clinical metrics may cause MA plans to reduce benefits according to a McKinsey report . Surveys show higher rates of care delays and trouble affording care among MA enrollees compared to those in traditional Medicare. Some hospitals have stopped accepting MA plans and lawmakers are calling for a crackdown on unlawful care denials.

Other news:

Rural Health System 'Teetering on Brink' of Collapse, Says AMA

Shrinking reimbursements and administrative burdens are pushing physicians, especially those in independent practice, out of rural healthcare according to the AMA. Rural areas have far fewer doctors than urban areas. To improve rural healthcare access, the AMA wants Congress to incentivize rural physician practice, expand rural residencies, revise visa rules for international doctors, and make pandemic telehealth flexibilities permanent. Anecdotes illustrate how stagnant reimbursement rates amid rising costs force difficult practice decisions. The AMA says physicians now spend twice as much time on prior authorizations as direct patient care.

Have a great week and stay tuned for next Monday’s briefing.