Final Rule Prior Authorization—Is it Really Helpful? | Legion Healthcare Partners

Final Rule Prior Authorization—Is it Really Helpful?

The Centers for Medicare & Medicaid Services (CMS) finally released the final rule for prior authorizations, creating a strong reaction from health plans. Both America’s Health Insurance Plans (AHIP) and the Association for Community Affiliated Plans (ACAP) slammed the rule and urged the Biden administration to freeze implementation. So why are they up in arms?

First, the rule is very limiting, and the impact will be small. CMS excluded Medicare Advantage plans and most commercial payors from the implementation. By doing this, most health plans will not be impacted in a widespread manner and actually cause little change. This has created a huge, missed opportunity by CMS. While health plans have brought up IT implementation issues there is a counterargument that these (or some variation) infrastructures should have already been in place.

From a patient and provider perspective, the prior authorization process can often be overwhelming and opaque, with the administrative burden often being borne by the provider. The aim of the final rule was to create transparency and shift the administrative burden to health plans. With one-third of Medicare beneficiaries on a Medicare Advantage Plan (approximately 22 million people) and the majority of Americans covered by a commercial payor who will this rule actually help? The answer is simple, no one. It is not well thought out and lacks the meat to really make a difference in this arena.

So what needs to happen? With a vast insurance landscape, this is almost an impossible question to answer. On the commercial side, insurance is so decentralized with states developing their own timelines and health plans being regulated by different entities depending if they are fully funded or self-funded. All of this has created a very confusing path for prior authorizations. It becomes even more confusing for large provider networks and hospitals that see patients from multiple states. It requires their financial clearance offices to understand multiple state rules and regulations. For those that are self-funded and follow ERISA, there seems to be little to no oversight, often leaving patients with long wait times for life-saving procedures.

For the time being, providers need to learn the process and how to hold health plans accountable until there is broad-sweeping change. Legion has recorded a webinar to help you understand the prior authorization process and how it affects your organization, just fill out the form below to have access to the recording.

The Impact of Insurance and the Prior Authorization Process

Video access for "The Impact of Insurance and the Prior Authorization Process" Webinar

Contact us for more information about our prior authorization services.

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