The Federation of American Hospitals (“FAH”) proposal that CMS add a quality measure to its Medicare Advantage star rating system that would require these plans to report their level 1 prior authorization denial rates has been recommended for approval by an expert panel. The “Level 1 Upheld Denial Rate” proposal is intended to add transparency to Medicare Advantage plans’ denials of prior authorization requests and to financially discourage these plans from abusing the prior authorization process. Star ratings scores are important to Medicare Advantage plans because plans with low scores receive lower payments from the Medicare program. In addition, consumers frequently consider star ratings in deciding which plan to purchase.
The Medicare Advantage plans’ prior authorization process has been sharply criticized by both providers and policy makers for denying and delaying medically necessary care. For example, a recent HHS Office of the Inspector General Audit found that of the prior authorization requests denied by Medicare Advantage plans, 13% met the Medicare program’s coverage rules and would have been approved by traditional Medicare.
The expert panel reviewing proposals, the Partnership for Quality Measurement, voted overwhelmingly to recommend that CMS adopt the measure. The panel determined that the policy could reduce burdens, improve transparency, and alleviate undue anxiety and delays in patient care.
In a press release praising the panel’s recommendation, FAH President and CEO Chip Kahn stated: “Medicare Advantage plan members need to know the extent to which plans are denying or delaying care due to prior authorization abuse.”
CMS is accepting comments on the panel’s recommendations, including on the Level 1 Upheld Denial Rate recommendation, until February 16, 2024.