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Congress eyes another run at prior authorization

Jan 22, 2024
Illustration of briefcases forming a brick wall in front of a giant red cross.

Illustration: Shoshana Gordon/Axios

Congress is dipping back into the prior authorization debate now that the Biden administration has issued a long-awaited rule that's expected to lower the cost — and improve the odds — of passing a legislative fix.

Why it matters: Overhauling the way federally funded insurers require approvals for medical services or drugs has become a bipartisan cause, showing commitment to improving access to care and easing doctors' paperwork burden.

What they're saying: Reviving a House-passed 2022 plan could build on the just-announced administrative changes that would, among other things, cut the time insurers have to turn around requests.

  • The Improving Seniors' Timely Access to Care Act would have overhauled the prior authorization process for Medicare Advantage plans, which handled 35 million requests in 2021 and fully or partially denied more than 2 million, per KFF.
  • Rep. Suzan DelBene, the House's lead sponsor, told Axios that while the Biden administration rule will be "incredibly helpful for seniors," it's important to pass legislation that could further clarify and tighten standards.

Of note: The administration projects the rule could save $15 billion over a decade, by reducing administrative burdens. That would, in theory, reduce the cost of any legislative fix aimed at making more changes.

  • The CBO estimated the 2022 bill would cost $16.2 billion over a decade, because of how it would prompt MA plans to increase their bids to cover expedited prior authorizations, resulting in higher government payments to insurers. That was enough to doom the measure in the Senate.
  • "Clearly the rule being out there also lowers the score, which makes a big difference," said DelBene. "I do think we have an important opportunity to get it all done."

Sen. Roger Marshall, the Senate lead on the prior authorization bill, was also enthusiastic about the way the rule improves the odds of moving legislation.

  • "It's good news. Prior authorization is the number one paperwork burden that physicians are facing right now," Marshall told Axios, adding that he wants to get the bill across the finish line.

State of play: Powerful health industry groups like the American Medical Association and American Hospital Association have praised the administration rule, in a sign a legislative push could gain strength.

  • The insurer trade group AHIP backs electronic prior authorization as a way to improve the system. Insurers still defend required approvals as necessary to control costs and make sure care is effective and efficient.

Details: DelBene and Marshall's plan differs from the rule in two main respects.

  • The rule beginning in 2026 requires insurers to respond to urgent requests within 72 hours, and seven days for standard requests.
  • Lawmakers want the urgent request timeline to be reduced to 24 hours.
  • They also want a mechanism for making real-time decisions on routinely approved items and services — a requirement that wasn't included in the administration rule.

Flashback: Prior authorization changes were considered for inclusion in one version of the House's big health price transparency bill, but were dropped from the final package, which passed the lower chamber in December.

What we're watching: Finding a must-pass vehicle to attach a reform package to will be challenging this session, considering how hard-line House conservatives continue to tank bills.

  • If the cost and nature of the reforms aren't deemed controversial, it's possible that a standalone prior authorization bill could be brought up under suspension of the rules.
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