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Medicare Advantage plans have increased their use of prior authorization and appear to be targeting certain types of care -- such as expensive post-acute hospital care -- for coverage denials, according to a by the Senate Permanent Subcommittee on Investigations.

Insurers "are using prior authorization to protect billions in profits while forcing vulnerable patients into impossible choices," the subcommittee's report concluded.

"This is particularly troubling when recent analyses indicate that Medicare Advantage is more expensive than traditional Medicare," the report continued. "There is a role for the free market to improve the delivery of healthcare to America's seniors, but there is nothing inevitable about the harms done by the current arrangement. Insurers can and must do better, for the sake of the American healthcare system and the patients the government entrusts to them."

Four Years of Data

The subcommittee sought data about prior authorization requests and denials between 2019 and 2022 from three of the largest Medicare Advantage insurers: UnitedHealthcare, Humana, and CVS. "This date range aligned with increases in concern from patients and providers that prior authorization was threatening seniors' well-being and the viability of medical practices," the report authors noted. "The time period also overlapped with reporting showing that Medicare Advantage insurers were expanding their use of AI [artificial intelligence] and other methods of automating the processing of healthcare claims."

In addition, lawmakers "also collected documents used in training workers evaluating prior authorization requests, and explanations of the procedures used to evaluate or measure these workers and determine their prospects for advancement. The subcommittee has also obtained documents related to the use of algorithms, AI, and other predictive technologies, including the way the companies use these technologies in the context of prior authorization and other utilization management practices."

The report noted that "Medicare Advantage insurers are intentionally using prior authorization to boost profits by targeting costly yet critical stays in post-acute care facilities. Insurer denials at these facilities, which help people recover from injuries and illnesses, can force seniors to make difficult choices about their health and finances in the vulnerable days after exiting a hospital."

In particular, the report found:

• In 2022, both UnitedHealthcare and CVS denied prior authorization requests for post-acute care at rates that were approximately three times higher than the companies' overall denial rates for prior authorization requests. In that same year, Humana's prior authorization denial rate for post-acute care was over 16 times higher than its overall rate of denial.
• CVS's prior authorization denial rate for post-acute care remained relatively stable during the period reviewed. However, the number of post-acute care service requests CVS subjected to prior authorization increased by 57.5%, far higher than the company's roughly 40% growth in enrollment during that period.
• In a May 2019 presentation, CVS determined that it had saved more than $660 million the previous year by denying prior authorization requests its Medicare Advantage beneficiaries submitted for inpatient facilities. A majority of these savings came from "denied admissions."
• While the use of prior authorization has expanded significantly for all types of insurance since the 1980s, its use in Medicare Advantage plans has particularly increased in the last 5 years. The found that the share of Medicare Advantage enrollees in a plan requiring prior authorization for at least one category of healthcare services was 72.6% in 2019, which was similar to the rate it had been in 2009. But by 2023, that 99% of Medicare Advantage enrollees were in a plan requiring prior authorization for some services.

"Although post-acute care facilities represent a significant share of all prior authorization denials, they represent only a portion of all prior authorization requests, meaning that an insurer's denial rate for post-acute care could increase significantly from one year to the next even as the insurer's overall denial rate, which is publicly available, appears relatively unchanged," the report found. "At the facility level, these changes can be striking. For example, between 2019 and 2022, UnitedHealthcare's denial rate for skilled nursing facilities increased by a factor of nine."

Use of AI Examined

In its investigation of the plans' use of artificial intelligence to consider prior authorization requests, the subcommittee found that:

• Facing pressure to cut costs in the Medicare Advantage division, in April 2021 CVS deployed "Post-Acute Analytics," which used AI to reduce the amount of money spent on skilled nursing facilities. CVS initially expected that it would save approximately $4 million per year, but within 7 months, the company projected that an expanded version of the initiative would save the company more than $77 million over the next 3 years.
• In April 2021, an internal UnitedHealthcare committee voted to approve the use of "Machine Assisted Prior Authorization" in the company's utilization management efforts. They were told that the doctor or nurse reviewing the case still had to "verif[y] that the primary evidence is acceptable," but also that testing of the technology had reduced the average time needed to review a request by 6 to 10 minutes.
• In early 2021, UnitedHealthcare tested a "HCE [Healthcare Economics] Auto Authorization Model." Minutes from a meeting of an internal committee reviewing the model noted that initial testing had produced "faster handle times" for cases as well as "an increase in adverse determination rate," which the meeting minutes attributed to "finding contraindicated evidence missed in the original review." The committee voted to tentatively approve the model at a meeting the following month.

Recommendations for CMS

The subcommittee recommended several actions for the Centers for Medicare & Medicaid Services (CMS) to take to address some of the issues raised in the report, including requiring that prior authorization information be broken down by category, conducting targeted audits under certain circumstances, and implementing regulations to ensure that predictive technologies do not have "undue influence" on human reviewers.

In particular, regarding the plans' use of AI to evaluate prior authorization requests, "CMS has not provided sufficiently specific guidance on separating the use of predictive technologies from patient determinations regarding post-acute care," the authors concluded, adding that in a February 2024 memo, the agency said AI could be used to "assist" in predicting a patient's length of stay, but that medical necessity determinations had to be based on "the individual patient's circumstances." However, the agency provided no further guidance on ensuring that the AI prediction didn't have undue influence on the length-of-stay authorization, they said.

Asked to comment on the report, a spokesperson for America's Health Insurance Plans -- a trade group for health insurers -- said in an email that "More than 33 million seniors and people with disabilities choose Medicare Advantage for their health coverage because it provides them better care at a lower cost than fee-for-service. Studies show that MA [Medicare Advantage] outperforms fee-for-service in nine out of 10 quality measures focused on prevention and chronic care, and 95% of MA beneficiaries say they are satisfied with their coverage and care."

A spokesperson for Humana told 麻豆传媒 in an email that "This is a partisan report laden with errors and misleading claims. In fact, Senator [Richard] Blumenthal's team declined to correct those errors and mischaracterizations that Humana identified after reviewing certain heavily redacted excerpts prior to the report's release."

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