Consumer groups address ‘shortcomings’ in CMS prior authorization ruling

CMA group of non-profit organizations wants regulators to take action on a series of “shortcomings” with the Centers for Medicare and Medicaid Services (CMS) recent final ruling on health insurance prior authorization.

At the recent National Association of Insurance Commissioners 2024 Spring Meeting, representatives from Consumers’ Checkbook, United States of Care and the Leukemia and Lymphoma Society suggested that addressing these issues could ensure faster care for Americans.

“Before we dig into the rule, I thought it was important to kind of categorize some of the pieces of prior authorization that are fundamental problems,” Eric Ellsworth, director of health data and strategy, Consumers’ Checkbook Center for the Study of Services, said.

The first major category he identified was a burdensome requirement on providers to complete different procedures for different insurers; and the second about a lack of clarity on review criteria.

In addition, he and fellow presenter Harry Ting, PhD, health consumer advocate and counselor, also singled out a lack of standardization in prior authorization across the country as a crucial area to be addressed.

Standardization a 'huge problem'

While Ellsworth acknowledged that the ruling has made some improvements, he said standardization remains a “huge problem.”

“I just want to flag as a kind of area of shortcomings that [the CMS ruling] doesn’t, in my view, go far enough on standardization,” he said.

He noted the practice of “gold carding” as an example, which gives some healthcare providers a way to effectively bypass prior authorization requirements.

“It does nothing on gold carding… It does not really address the inconsistency of criteria across plans,” Ellsworth said. “I see that as a major focus of effort going forward.”

Burdensome process cited

The ruling likewise must better address the “huge amount” of manual labor involved in the prior authorization process, Ellsworth noted.

“If you’re a provider and you see patients across 30 different insurers, then you’re going to have 30 different sets of rules, and so for the patient and the provider sitting in the doctor’s office, it’s awfully hard to figure out what’s going to happen when a particular medical service is covered,” he said.

While utilization management is “widely used” among health insurers across the country, Ellsworth said there are still delays that can prove dangerous for the patient.

“There are serious harms to consumers, especially [since] delays associated with prior auth can lead to hospitalization, life-threatening events, disability or even death,” he said.

Standardization can “really drive improvement” in this area, he added.

Unclear criteria & 'questionable denials'

Ellsworth noted that review criteria can also be unclear and parts of the process still lack transparency, leading to “questionable denials.”

“This is when, for example, generally accepted medical necessity criteria are not used; or proprietary criteria are used and there’s no transparency into the criteria for the providers; or the use of reviewers who are clinically not qualified — folks who are not in the same specialty and don’t see those kinds of patients,” Ellsworth explained.

These can drive problems that cause higher provider expenses and more tedious denial appeals, both of which disproportionately affect underserved and underrepresented individuals, he said.

CMS rule enforcement called unclear

Enforcement is also unclear under the current ruling, according to Ellsworth.

“We’d like to see some greater clarity in who’s going to take responsibility for enforcement in the federal and state level, and we look forward to engaging with you all on that subject going forward,” he said.

At the same time, consumer groups are also looking for more reporting on prior authorization statistics, as they find those established by the CMS final rule are still “a little too aggregated.”

“There's no breakdown by service line, no distinctions between things like behavioral health and medical health that we think would give a lot more insight into what exactly is being approved and denied,” Ellsworth said.

Recommendations

To help address some of these “shortcomings”, Ting encouraged the NAIC to maintain an “inventory” of state prior authorization regulations, study the impact of the wide variation in prior authorization across states and identify areas where it can be more consistent countrywide.

The consumer groups’ recommendations for regulators were more thorough, and included:

• Addressing regulatory differences between state and federal regulations
• Applying the more stringent of CMS standards to reduce provider and consumer confusion
• Work with state agencies to apply requirements to public employee plans
• Collect data in more detail than is required by the ruling
• Make data publicly available

The CMS’ final ruling was passed in January, with different aspects set to come into effect in 2026 and 2027.

Consumers' Checkbook, founded in 1976, provides unbiased advice and information to consumers in the United States.

United States of Care, founded in 2018, advances policy solutions aimed at improving the American healthcare system for individuals.

The Leukemia and Lymphoma Society, founded in 1949, is a charitable health agency dedicated to providing information and promoting causes to find a cure for blood disease.

Rayne Morgan is a Content Marketing Manager with PolicyAdvisor.com and a freelance journalist and copywriter.

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Rayne Morgan is a journalist, copywriter, and editor with over 10 years' combined experience in digital content and print media. You can reach her at [email protected].