A new report conducted by the U.S. Senate Permanent Subcommittee on Investigations reveals the three largest Medicare Advantage (MA) insurers are intentionally denying prior authorization requests for care in post-acute care facilities to boost profits.
The 54-page report, released today, finds a troubling trend among the three largest MA insurers: UnitedHealthcare, Humana, and CVS, who together cover nearly 60 percent of all MA enrollees. The data, based on more than 280,000 pages of documents obtained from the insurers, suggests that they are “intentionally targeting a costly but critical area of medicine—substituting judgment about medical necessity with a calculation about financial gain.”
RELATED: Prior authorization hazards: Docs report patient harm, bad outcomes, delayed and disrupted care
The committee launched the investigation in May 2023 to determine the extent of barriers MA enrollees face in accessing care, particularly following discharge from a hospital. It focused on a four-year period, 2019 to 2022, which overlaps with reports that MA insurers were expanding their use of artificial intelligence (AI) and other methods of automating the processing of health care claims.
RELATED: Regulatory roundup: MA plans denied more prior authorization requests in 2022 than previous years
The Subcommittee said it was able to analyze data that MA insurers are not required to make public and to examine internal documents from insurers that provide context for the trends revealed by the data.
Among the findings:
· Between 2019 and 2022, UnitedHealthcare, Humana, and CVS each denied prior authorization requests for post-acute care at far higher rates than they did for other types of care, resulting in MA beneficiaries having reduced access to post-acute care.
· In 2022, both UnitedHealthcare and CVS denied prior authorization requests for post-acute care at rates that were approximately three times higher than the companies’ overall denial rates for prior authorization requests. In that same year, Humana’s prior authorization denial rate for post-acute care was over 16 times higher than its overall rate of denial.
· UnitedHealthcare’s denial rates for skilled nursing facilities skyrocketed during 2019 to 2022, the period covered in the report. The denial rate in 2019 was nine times lower than it was in 2022. UnitedHealthcare also processed far more home health service authorizations for MA members during this period, underscoring concerns about insurers rejecting placements in post-acute care facilities in favor of less costly alternatives.
· One program CVS developed and suggested the company use is to focus on cases with a significant likelihood to be denied. Indeed, in a May 2019 presentation, CVS determined that it had saved more than $660 million the previous year by denying prior authorizations requests its MA beneficiaries submitted for inpatient facilities. Most of the savings came from “denied admissions.”
· Facing pressure to cut costs in the MA division, in April 2021, CVS used artificial intelligence in its post-acute analytics to reduce the amount of money spent on skilled nursing facilities. CVS initially expected that it would save approximately $4 million per year, but within seven months, the company projected that an expanded version of the initiative would save the company more than $77 million over the next three years
· Humana's denial rate for long-term acute care hospitals, the most expensive type of post-acute care, grew by 54 percent between 2020 and 2022 after it held training sessions devoted to prior authorization requests for that type of facility
· In the fall of 2019, Humana modified the templates it provided reviewers to communicate decisions on prior authorization requests and appeals of prior authorization denials. The changes made to the templates for two types of post-acute care facilities were important for denial purposes and were encouraged to be added to enhance Humana’s ability to uphold a denial on appeal
The committee plans to continue to investigate MA insurers’ use of predictive technologies for prior authorization decisions, which it says continues to be cloaked in uncertainty. Meanwhile, it made three recommendations to regulators to address the growing problem:
- The Centers for Medicare & Medicaid Services (CMS) should collect prior authorization information by service category. Currently the way the agency collects data it is unclear whether insurers are using prior authorization to target particular types of care.
- CMS should conduct targeted audits if insurer prior authorization data based on service category reveal a spike in adverse determination rates.
- CMS should expand regulations for insurers’ utilization management committees to ensure that predictive technologies do not have undue influence on human reviewers. Even if predictive technologies are solely used to approve requests, nurses and doctors reviewing cases may face pressure to rubber-stamp the recommendations of algorithms and artificial intelligence, the committee said.