Medicare Advantage to Be Radically Changed Under New Plan

Medicare Advantage plans could look dramatically different if a new law passes in the Senate.

For years, seniors have complained about prior authorization requirements under some Medicare Advantage plans. The privatized version of Medicare often provides lower out-of-pocket costs but forces patients to choose between pre-approved healthcare providers.

And in many cases, seniors on Medicare Advantage have to get prior authorization approval to access the treatments they need.

All that would change if Democratic Rhode Island Senator Sheldon Whitehouse's plan gets passed.

Whitehouse argues that insurers with prior authorization requirements on doctors in accountable care organizations should need their own prior approval from the Centers for Medicare and Medicaid Services.

"There is no logic to prior authorization," Whitehouse, who serves as the chairman of the Senate Budget Committee, said at a committee hearing this week. "So I propose the companies in Medicare get prior authorization from CMS before they're allowed to impose prior authorization on doctors who are practicing in successful accountable care organizations that have a proven track record of providing efficient patient care. No prior authorization without prior authorization."

Whitehouse also said that billing and insurance-related costs total nearly $200 billion yearly, and the lack of standardization has healthcare costs piling up.

"The lack of standardization has been one major pain point," Whitehouse said. "Different insurers apply different processes and rules to different providers, creating a web of confusion, driving up costs, and making doctors sometimes spend more time on administration than on providing actual care."

If passed, seniors who have been complaining about the prior authorization process for years might have a bit of relief if more Medicare Advantage insurers opt out of this process.

If there were fewer prior authorizations, healthcare workers would likely benefit as well. Many sought out streamlined paperwork and more simplified billing forms in an HHS Surgeon General 2022 Health Worker Burnout report.

"Prior authorization is nothing new when it comes to taking advantage of benefits, but it can often feel like just another loophole for the older and often more vulnerable group utilizing them," Alex Beene, financial literacy instructor at the University of Tennessee at Martin, told Newsweek. "The argument for prior authorization is for verification purposes and to make the process easier on the front end for the provider and for the senior."

Michael Ryan, a finance expert and the founder of michaelryanmoney.com, said he's witnessed many clients express frustration over getting approval for their doctor's recommended treatments. Many even have procedures denied despite being medically necessary.

"These proposed rules from the Biden administration to streamline prior auth under MA plans could be a game-changer for the 28 million seniors enrolled in these private insurance alternatives to traditional Medicare," Ryan told Newsweek.

Under the new rules, Medicare Advantage plans would mandate prior authorization decisions within 72 hours for urgent requests and seven days for standard requests. Today, many seniors could wait weeks just to get something as simple but necessary as an MRI approved, Ryan said.

There would also likely be clearer rationale behind why services were denied rather than the "vague explanations" seniors often deal with, Ryan said.

"I can't tell you how many times I've had clients get baffled by curt denial letters using confusing medical jargon," Ryan said. "Shining more light on the criteria could help people better understand if an appeal is warranted."

Still, Ryan warns seniors from believing Whitehouse's idea is a perfect solution.
"Health insurers have gotten quite adept at finding loopholes over the years," Ryan said. "But the increased reporting requirements and threat of closer oversight could put some serious pressure on MA plans to cut back on excessive prior authorization demands."

If Whitehouse moves on with a bill, health insurers will no doubt fight back, but that doesn't mean it's a total lost cause, experts say.

"The prior authorization fight does seem to have some rare bipartisan momentum behind it, including legislation passed in the House last year," Ryan said. "Perhaps an issue that so clearly impacts seniors' wellbeing could cut through some of the usual D.C. gridlock."

Newsweek reached out to Sheldon Whitehouse for comment.