MedPAC disappoints with lacking skilled nursing commentary, no action on Medicare Advantage prior authorization process

A Congressional advisory commission on Thursday declined to issue recommendations on improving Medicare Advantage prior authorizations, MA data transparency, or lowering payments to inpatient rehabilitation facilities. 

The Medicare Payment Advisory Commission, in fact, uncharacteristically issued no recommendations in its required annual report to Congress. In addition, none of this year’s chapters were directly connected to skilled nursing payment policies.

MedPAC members, however, dedicated two full sections to their concerns about Medicare beneficiaries’ increasing reliance on MA plans, their inability to access some services without significant hurdles and a lack of transparency into patient encounters with those plans.

“Beneficiaries who enroll in MA accept provider networks and utilization management tools such as prior authorization in exchange for additional benefits such as reduced cost sharing, limits on out-of-pocket spending, and other benefits that MA plans can provide,” report authors acknowledge. “On the one hand, these tools have the potential to promote more efficient care, including better quality outcomes. On the other hand, misapplication of these tools could lead to beneficiaries struggling with delays or denials of needed care.”

Plans most often require prior authorization for “relatively expensive services,” including skilled  nursing stays, Part B drugs and inpatient hospital stays, MedPAC reported. A recent study found that plans’ use of prior authorizations increased from 2009 to 2019 for most service categories. 

Overall, 95% of prior authorization requests were granted, but denials ranged from 3% to 12% depending on the plan. In the 11% of denials that were appealed, MedPAC reported that 80% were overturned. Although that shows a significant number of wins, the extra work required to get needed patient care covered has been a constant and growing complaint among nursing home staff.

Prior authorization can be a health risk for patients if needed care is delayed or denied, MedPAC reiterated.

The Centers for Medicare & Medicaid Services has recently adopted a series of measures to streamline and better track the use of prior authorizations. Those changes, including an online portal meant to make the need for and submission of authorization requests easier, are expected to be in effect by 2027.

MedPAC members also continue to seek better MA data that would allow researchers and policymakers to more easily compare use and benefits against traditional, fee-for-service Medicare.

Despite seeing some improvement in data reporting, the commission reminded Congress that it previously made an unacted-recommendation to require the Health and Human Services secretary to withhold partial payments from MA plans that fail to submit data according to improved data requirements.

Also tucked into the six-chapter, 269-page report was a debate about reducing payments for some services provided in inpatient rehabilitation facilities. IRF Medicare margins have exceeded 10% for 20 years, even as the number of such facilities has fallen by hundreds to about 1,220. 

In 2018, OIG concluded that the high profitability may have created incentives for IRFs to admit patients inappropriately. The commission wants a better way to determine who truly needs care in an IRF, which could then lead to more SNF admissions.

The commission considered three new ways to reduce IRF payments, but ultimately decided not to move forward with any of them.  Instead, they encouraged Congress to reconsider a standing recommendation to lower payment rates for all IRF cases.