Lawmakers are scrutinizing managed care

Federal lawmakers have been probing payers on a variety of issues in recent months, raising concerns on prior authorizations, Medicare Advantage costs, artificial intelligence and more. 

Here are some of the issues lawmakers have taken up with managed care providers in recent months: 

Medicaid prior authorization denials 

A report on Medicaid prior authorization denials has some lawmakers concerned. An HHS Office of Inspector General report, published in July, found the seven largest Medicaid MCO parent companies deny around 1 in 8 prior authorization requests. Of the 115 MCOs the OIG audited, 12 had prior authorization denial rates greater than 25 percent. 

On Sept. 28, Sen. Ron Wyden, chair of the Senate Committee on Finance, and Rep. Frank Pallone, ranking member of the House Committee on Energy and Commerce, said they would launch an investigation into prior authorization denial rates. The two lawmakers sent letters to the seven largest Medicaid managed care providers, requesting they submit information on the rate of appeals and denials in their plans and information on any AI algorithms used in the prior authorization process. 

Medicare Advantage 

In July, a group of lawmakers gathered to urge the Biden Administration and CMS to do more to limit Medicare Advantage overpayments, misleading marketing and prior authorization denials. 

Sen. Elizabeth Warren, a frequent critic of Medicare Advantage, urged a "crack down" on overpayments to MA insurers. 

"Instead of giving away extra money to private insurance companies, we can strengthen traditional Medicare," Ms. Warren said. "By doing that, we can save money, and we can use some of those savings to expand benefits, like hearing, dental and vision. We can add an out-of-pocket cap for all beneficiaries. We can finally lower the eligibility age for Medicare." 

Some lawmakers are also seeking more information about claims denials from the largest Medicare Advantage insurers. 

On May 17, the Senate Permanent Subcommittee on Investigations sent letters to CVS Health, Humana and UnitedHealth Group seeking internal documents detailing how the companies decide to approve or deny claims, including how the payers use artificial intelligence in the process. 

"I want to put these companies on notice. If you deny lifesaving coverage to seniors, we're watching, we will expose you, we will demand better, we will pass legislation if necessary," subcommittee Chair Sen. Richard Blumenthal said in a news release.

Prior authorization reform

Prior authorization is a top area of concern for policymakers. In June, more than 230 U.S. representatives and 61 senators asked HHS and CMS leaders to bolster a proposed rule aimed at streamlining the prior authorization process. The lawmakers asked CMS to add provisions to the proposed rule to align more with legislation that passed the House last year, according to the report. 

The provisions lawmakers asked for included real-time prior authorization for routine matters, a 24-hour deadline for Medicare Advantage plans to answer prior authorization requests for urgently needed care, and more detailed transparency metrics. CMS will finalize its rule by December 2025. 

AI's role in prior authorization is also on lawmakers' minds. In a June Senate Finance Committee hearing, Sen. Ron Wyden, an Oregon Democrat and chair of the committee, said he is "increasingly concerned by the potential for abuse when it comes to the use of big data and algorithms in healthcare." 

"If insurance companies are getting bigger, and buying companies that specialize in developing algorithms, it strikes me that they are going to be in a position to invest in new ways to deny care," Mr. Wyden said. "That strikes me as a prescription for trouble." 

Medicare drug coverage 

Medicare now covers Leqembi for eligible beneficiaries with Alzheimer's disease, but lawmakers still have questions about the drug's high cost. In a June 10 letter to HHS Secretary Xavier Becerra, Sen. Bernie Sanders, chair of the Senate Health, Labor, Education and Pensions Committee, called Leqembi's $26,500 annual price tag "outrageously high." 

In the letter, Mr. Sanders asked Mr. Becerra if Medicare premiums will increase because of the drug's high list price. 

If 10 percent of Medicare beneficiaries diagnosed with Alzheimer's disease received Leqembi, the drug would cost the program $17.8 billion annually, according to KFF. 

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