Measuring the Scope of Prior Authorization Policies

Abstract

IMPORTANCE Health insurers use prior authorization to evaluate the medical necessity of planned medical services. Data challenges have precluded measuring the frequency with which medical services can require prior authorization, the spending on these services, the types of services and clinician specialties affected, and differences in the scope of prior authorization policies between government-administered and privately administered insurance.OBJECTIVES To measure the extent of prior authorization requirements for medical services and to describe the services and clinician specialties affected by them using novel data on private insurer coverage policies. DESIGN, SETTING, AND PARTICIPANTSFee-for-service Medicare claims from 2017 were analyzed for beneficiaries in Medicare Part B, which lacks prior authorization. We measured the use of services that would have been subject to prior authorization according to the coverage rules of a large Medicare Advantage insurer and calculated the associated spending. We report the rates of these services for 14 clinical categories and 27 clinician specialties. MAIN OUTCOMES AND MEASURESAnnual count per beneficiary and associated spending for 1151 services requiring prior authorization by the Medicare Advantage insurer; likelihood of providing 1 or more such service per year, by clinician specialty. RESULTS Of 6 497 534 beneficiaries (mean [SD] age, 72.1 [12.1] years), 41% received at least 1 service per year that would have been subject to prior authorization under Medicare Advantage prior authorization requirements. The mean (SD) number of services per beneficiary per year was 2.2 (8.9)

Evaluation of Spending Differences Between Beneficiaries in Medicare Advantage and the Medicare Shared Savings Program

“…Utilization management policies in MA would apply to a large proportion of FFS beneficiaries but are not allowed in Medicare FFS. 29 Finally, differences in MA and MSSP program design may contribute. Variability in factors such as site of service and differences in plan design, notably additional levers for MA to control costs through network design, may further contribute to lower outpatient hospital spend among MA beneficiaries.…”

“…Over the past 20 years, CMS has undertaken several efforts to improve risk adjustment in the MA program to account for clinical and socioeconomic differences between MA and FFS populations. 14 , 15 , 29 These have included expanding diagnostic information to include both inpatient and outpatient information under the CMS-HCC and better accounting for specific factors such as substance use, mental health, and CKD. Our study expands on these improvements in risk adjustment by incorporating rich EHR-based clinical information to estimate risk using clinically validated risk measures derived from clinical practice.…”

“…Payers, generally not health systems, use utilization management to control spending for MA beneficiaries. Utilization management policies in MA would apply to a large proportion of FFS beneficiaries but are not allowed in Medicare FFS . Finally, differences in MA and MSSP program design may contribute.…”

Comparison of Low-Value Services Among Medicare Advantage and Traditional Medicare Beneficiaries

“…Unlike TM, MA plans have a greater ability to create networks of clinicians (network design); develop insurance products that incentivize in-network care, place a focus on primary care, and promote the efficient use of specialty services (product design); and review tests, treatments, and procedures for medical necessity and appropriateness before remitting payment (utilization management). 11,12 Compared with TM, MA plans have also more rapidly adopted value-based payment models, 13 which have been associated with reductions in low-value care. 7 Consequently, we hypothesized that Medicare beneficiaries enrolled in MA would experience lower rates of low-value services than those enrolled in TM.…”

Comparing Spending in Medicare Advantage and Accountable Care Organizations—Is Plan–Health Care System Integration the Future?

“…MA plans can limit their enrollees to a limited set of potentially lower cost clinicians and facilities 3 and also have the flexibility to enforce greater control over the care received through the use of prior authorization requirements. 4 An ACO typically does not have as much control over what care their patients receive and where they receive that care, putting similar models at a disadvantage when trying to control spending relative to MA plans.…”