Senate |

Medicare Advantage plans’ use of third-party algorithms for coverage determinations is facing some scrutiny in the Senate.

Lawmakers in a Wednesday hearing argued something must be done to pare back burdensome prior authorization requirements allowing payers to delay or deny medical care that would be covered under traditional Medicare — including the use of artificial intelligence — as insurer profits continue to rise.

“Insurers are in effect denying Americans necessary care in order to fatten and pad their bottom lines, and that phenomenon is unacceptable,” said Sen. Richard Blumenthal, D-Conn., chair of the Permanent Subcommittee on Investigations, which held the hearing.

“I want to put these companies on notice. If you deny lifesaving coverage to seniors, we’re watching, we will expose you, we will demand better, we will pass legislation if necessary, but action will be forthcoming,” Blumenthal said.

The subcommittee on Wednesday sent bipartisan letters to some of the biggest MA payers, including UnitedHealth, Humana and CVS, which collectively cover more than 50% of MA beneficiaries. The letters asked for internal documents showing how decisions are made to grant or deny access to care, including the use of AI in coverage determinations, Blumenthal said.

Payment denials

Although the majority of requests for services are approved, it’s not uncommon for private MA plans to wrongly deny medically necessary care that would be covered under traditional Medicare, according to an HHS Office of Inspector General report from last April.

Federal investigators found 13% of prior authorization requests and 18% of payment denials were wrongly denied and should have been approved under Medicare coverage rules.

In addition, a 2018 government audit found MA plans ultimately approved 75% of appealed requests that were originally denied.

MA plans, which can offer more benefits than traditional Medicare, continue to grow in popularity. Currently, 30 million Americans, or roughly half of all Medicare enrollees, are in the privately run Medicare plans. And the number of plans has grown, with the average beneficiary choosing between 43 plans offered by nine different insurers as payers flood into the lucrative market.

“Fast growth has increased vulnerabilities and the need for robust program integrity measures,” testified Megan Tinker, HHS OIG chief of staff, during the hearing.

AI determinations

To cut costs, MA insurers are routinely using algorithms from third-party companies like NaviHealth for coverage determinations, sparking many of the inappropriate denials, according to a STAT investigation earlier this year.

Insurers’ use of the unregulated technology was a major focus of the hearing with senators arguing the need for more oversight.

“Insurers may refer to these algorithms as tools used for guidance, but the denials they generate are too systematic to ignore,” said Blumenthal. “Insurance companies insist those AI mechanisms are proprietary, but part of what needs to happen is to make them more transparent so patients and providers know along with the public how they are being used.”

Gloria Bent, an MA enrollee, shared her husband’s experience with melanoma and how NaviHealth, which is owned by payer giant UnitedHealth, frequently denied care prescribed by his clinician. That resulted in a stressful cycle of coverage denials and appeals and his premature departure from a skilled nursing facility.

“The reappearance of melanoma in 2022 pulled a rug out from under my husband and my family. Then came the added trauma which piled on steadily of having to fight to keep him receiving the care he needed,” Bent testified. “This should not be happening to families and patients. It’s cruel.”

Still, utilization management tools like prior authorization can be valuable for cost containment, testified Lisa Grabert, a visiting research professor at the Marquette College of Nursing. Insurers argue prior authorization is necessary to curb waste and unnecessary medical expense.

Earlier this year, the Biden administration finalized a rule reiterating that MA plans are required to comply with coverage rules in traditional Medicare. Where there isn’t a Medicare coverage determination, MA plans can establish their own internal coverage criteria. That criteria must follow widely accepted available clinical guidelines and be reviewed annually by a clinical committee, the final rule says.

In addition, if a utilization management policy like a prior authorization could lead to a partial or full denial of care, it needs to be reviewed by a clinician. CMS plans to enforce the rule through audits.

Large private health insurers, like UnitedHealthcare, have been paring back their prior authorization requirements in advance of the regulation.

Senator Roger Marshall, R-Kans., asked witnesses if it would be valuable to force plans to report more detailed information on prior authorization delays, denials and appeals by CPT code or individual service level, as the new CMS rule only requires MA payers to share aggregate data.

Witnesses said more data is always helpful for research, oversight and beneficiary shopping between plans.

“The information that is available right now, you have to dig very, very, very deep to get any information on whether a prior authorization may or may not be required, and certainly not at the service level,” testified Jeannie Fuglesten Biniek, associate director of Medicare policy for KFF. “It would be a step in a direction that would help.”

Key progressives in the House and Senate have revived the fight in Congress over “Medicare for All,” a single-payer health system based on the Medicare program.

Sen. Bernie Sanders, I-Vermont, and Reps. Pramila Jayapal, D-Washington, and Debbie Dingell, D-Michigan, reintroduced the Medicare for All Act, with 14 Senate Democrats and 110 House Democrats on board with the measure.

The legislation would roll out the Medicare for All model over four years, expanding health coverage to each American. Under the bill, that coverage would come with no premiums, deductibles or copayments and would cover a wide array of services from primary care to vision care to mental health.

Sanders said in a news release that the COVID-19 pandemic threw into stark relief how critical it is to ensure that everyone has access to affordable healthcare.

“As we speak, there are millions of people who would like to go to a doctor but cannot afford to do so,” Sanders said. “That is an outrage. In America, your health and your longevity should not be dependent on your bank account or your stock portfolio.”

The legislators noted that the Congressional Budget Office previously projected that Medicare for All would save the healthcare system $650 billion per year.

“Sadly, the number of people struggling to afford care continues to skyrocket as millions of people lose their current health insurance as pandemic-era programs end,” Jayapal said. “Breaking a bone or getting sick shouldn’t be a reason that people in the richest country in the world go broke.”

Medicare for All faces strong opposition from all corners of the industry. In a statement, the Partnership for America’s Health Care Future, which represents payers and providers, urged legislators to take a more “common sense approach” to ensuring coverage is accessible to everyone.

“Every American deserves access to affordable, high-quality health coverage and care—however one-size-fits-all proposals like Medicare for All that result in government-controlled health care won’t help us get there,” said Executive Director Lauren Crawford Shaver. “With more and more states seeing failed public option approaches, it is more important than ever that Americans have access to quality and affordable health care—not a system that would force them to pay more and wait longer for worse care. ”

Senate Scrutinizes MA Payment Denials, Including Use Of Algorithms

Payment denials

AI determinations

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