The U.S. Department of Health and Human Services (HHS) released a report on Thursday that found every year Medicare managed care organizations inappropriately deny medically necessary care to tens of thousands of people enrolled in private Medicare Advantage plans.

Investigators from HHS Office of the Inspector General (OIG) urged Medicare officials “to strengthen oversight of these private insurance plans, which provide benefits to 28 million older Americans, and called for increased enforcement against plans with a pattern of inappropriate denials.” The OIG concluded that coverage and payment denial prevent patients from receiving necessary care and can unnecessarily burden physicians.

Specifically, the OIG reported that Medicare Advantage plans  denied prior authorization requests and payment requests that met Medicare coverage and billing rules by 1) using internal criteria that are not contained in the Medicare coverage rules; 2) requesting unnecessary documentation although appropriate documentation was found in patient records submitted by physicians; and 3) making manual review errors and system errors.

Surveys of physicians have consistently found that excessive authorization controls required by health insurers are persistently responsible for serious harm when necessary medical care is delayed, denied or disrupted in an attempt to increase profits. In a 2021 American Medical Association (AMA) survey, 34% of physicians reported that prior authorization led to a serious adverse event for a patient in their care such as hospitalization, medical intervention to prevent permanent impairment, or even disability or death. Moreover, physicians and their staff spend nearly two days per week on prior authorizations creating costly administrative burdens.

The California Medical Association (CMA) agrees with the federal investigators’ recommendations for preventing inappropriate use of authorization controls to delay, deny and disrupt patient care, but more needs to be done to reform prior authorization. CMA continues to fight for medical decisions to be made by trained medical professionals, instead of lay entities more concerned with the corporate bottom line than the quality of patient care. This is why CMA is supporting legislation at the state and federal levels that would streamline and standardize prior authorization requirements so that patients are ensured timely access to the evidence-based, quality health care they need.

At the federal level, CMA is supporting legislation — HR 3173/ S 3018, the “Improving Seniors’ Timely Access to Care Act” authored by California Congressman Ami Bera, M.D. — that seeks to streamline Medicare Advantage prior authorization for routinely-approved services, ensure plans adhere to evidence-based guidelines developed by physicians, mandate public reporting of prior authorization decisions and timeframes, and implement an electronic process to reduce physician administrative burdens. The proposed federal legislation has gained bipartisan support from more than 300 members in both chambers of Congress.

“It has become common practice for health insurance companies to create obstacles for patients, in hopes of not having to pay for essential health care,” says CMA President Robert E. Wailes, M.D. “The reason for these types of obstacles is simple: Fewer procedures performed translates to larger insurance company profits. The time delays and administrative burdens also continue to undermine health care outcomes. Lawmakers must act now to place patient needs before corporate profits and simplifying by streamlining prior authorization processes.”

In California, CMA is sponsoring SB 250 by Senator Richard Pan, M.D. SB 250 would require state regulators to streamline the prior authorization system to ensure patients have access to critical care. One successful approach taken in other states is an audit-based system where prospective prior authorization is waived for clinicians deemed high-performing. Texas, for example, recently passed legislation that prevents insurers from imposing prior authorization requirements on providers who have historically high approval rates.

Add your voice to the fight against prior authorization red tape

CMA is asking you to share your unique experience as a patient, physician or health care professional so that we can best explain to lawmakers how prior authorization policies are harming patients. 

If you have waited days or months for an insurance company to approve a medicine prescribed by your doctor, we want to hear from you.  If you are a physician frustrated with the administrative headaches and their impact on your patient, we want to know your story.

Click here to share your prior authorization stories.