On prior authorizations and Medicare Advantage reforms: a lawmaker’s perspective

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There are changes in store for the prior authorization process in health care, but more are needed.

Meanwhile, federal lawmakers and regulators have a continuing duty to examine patient care, costs and benefits provided by Medicare Advantage plans.

Rep. Larry Bucshon, MD, spent years as a practicing physician and cardiothoracic surgeon before being elected to Congress in 2010. As vice chair of the Health Subcommittee of the House Committee on Energy & Commerce, he has reviewed numerous pending bills that would affect health care and medicine around the nation.

Rep. Larry Bucshon, MD (R-Indiana)

On Feb. 16, Bucshon spoke to Medical Economics about the “Improving Seniors’ Timely Access to Care Act,” legislation about prior authorizations that he has co-sponsored for at least two sessions of Congress. The U.S. Centers for Medicare & Medicaid Services (CMS) has proposed rule changes, but those don’t go far enough.

He also talked about potential reforms in Medicare Advantage (MA) and scrutiny by the U.S. Department of Health & Human Services’ Office of Inspector General (HHS-OIG).

This transcript has been edited for length and clarity.

Medical Economics: For years, physicians and patients have complained about the prior authorization process. The “Improving Seniors’ Timely Access to Care Act” would streamline prior authorizations. It has widespread medical support and bipartisan political support. Why has that not passed in Congress yet?

Rep. Larry Bucshon, MD: Well, let me just say that CMS is trying to address this, they came out with three rules that are going to address a lot of this. It doesn't go far enough, but it's a start. My legislation with Congresswoman (Suzan) DelBene (D-Washington) had over 300 and some co-sponsors, as you probably know, in the last Congress to change the prior authorization process in Medicare Advantage plans because that's the first step. It didn't get across the finish line because of a Congressional Budget Office score, which came out at the last minute. It passed the House with broad bipartisan support. But in the Senate because of this really what I'll call last-minute CBO score of $16 billion, it didn't get passed the Senate. Now let me just comment on that score. I had a 45-minute conversation with the director of the CBO (Congressional Budget Office). I completely disagree with scoring this bill the way they did. What they did is, they said, well, what are MA plans currently doing? And that included denials of claims based on prior authorization which were honestly improperly denied. And that's what they said is the baseline. They said, well, if you force them, using prior authorization reform, to actually pay these claims, then it's going to cost Medicare $16 billion, and that's how they scored it. So they scored it $16 billion and it killed the legislation in Congress. That's what happened.

Medical Economics: Has there been additional calculation, then, or how would you change or rectify that estimate?

Rep. Larry Bucshon, MD: We think that the score is now going to be down, maybe around $4 billion or less, if they score it the same way that they did last time based on some of the changes that CMS has already made. So, we're hopeful, but the thing is about prior authorization is, this is a problem that the entire medical community knows needs to be changed. And it's disappointing to me, honestly, that it's shown within HHS, internal watchdog, the Inspector General report on MA plans that this is true, that claims that should be paid are being denied by MA plans based on prior authorization and other issues. Which is disappointing to me because I'm a big supporter of MA plans. So, you know, this isn't just my opinion, and the medical community's opinion. This is factual based on HHS’ own Inspector General report that came out a number of months ago. So, it needs to be fixed. The prior authorization process is not going to go away and I understand that. But it needs to be streamlined, it needs to be electronic, it needs to be faster. That's one of the differences between my previous legislation and CMS rules, the speed at which the decisions have to be made. And so I think ultimately, it's going to get across the finish line that we're going to be able to make some changes in the law. Realize if CMS puts out rules a new administration can just change the rule on you, right? So that's why we still need to have legislation.

Medical Economics: Medicare Advantage is growing in popularity, but there have been reports critical about Medicare Advantage, ranging from overcharging taxpayers, to improper denial of care for patients, to lack of transparency to regulators. What reforms for Medicare Advantage would you like to see?

Rep. Larry Bucshon, MD: Well, first of all, we just talked about it, the prior authorization process needs to be improved. The overpayment argument is controversial because MA plans provide more services than traditional Medicare. People that are big supporters of traditional Medicare say, well, it should cost the same because it's Medicare, right? Well, that's not true because you don't need a supplement for MA plans. It covers a lot of other things that America's seniors really enjoy in life. So, it's going to cost the government a little bit more money likely. Now, what the payment level is at CMS and how much they pay MA plans needs to be looked at right and if you look at the profitability of MA plans for insurance companies versus their what are called ERISA plans, or employee sponsored health care, their profit margins are quite larger, according to a Wall Street Journal report a number of months ago, for their MA plans versus their ERISA health care plans. That needs to be looked at. But I don't think that there's anything particularly nefarious there, but yeah, that's a that's a fair argument to make, that we should decrease reimbursement to MA plans from the Medicare program. But if you do that of course, they're going to retract services that seniors enjoy. So, I think we can fix this. I do think transparency, as you mentioned, is an issue, but that's an issue across health care. I mean, if you look at health care in general, for example, the 340B pharmaceutical program, there's just a lack of transparency across the entire health care space. And I think that's coming to Congress, and I think some of its going to be fixed. America's seniors enjoy these plans, they get more services from the plans than they do from traditional Medicare. But there are challenges, absolutely, and that is outlined in the HHS Inspector General report, which I encourage everyone to look up and read.

Editor’s note: ERISA is the Employee Retirement Income Security Act of 1974, a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for people in those plans, according to the U.S. Department of Labor.