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Los Angeles Times
a day ago
- Health
- Los Angeles Times
5 takeaways from health insurers' new pledge to improve prior authorization
Nearly seven months after the fatal shooting of an insurance CEO in New York drew widespread attention to health insurers' practice of denying or delaying doctor-ordered care, the largest U.S. insurers agreed Monday to streamline their often cumbersome preapproval system. Dozens of insurance companies, including Cigna, Aetna, Humana, and UnitedHealthcare, agreed to several measures, which include making fewer medical procedures subject to prior authorization and speeding up the review process. Insurers also pledged to use clear language when communicating with patients and promised that medical professionals would review coverage denials. While Trump administration officials applauded the insurance industry for its willingness to change, they acknowledged limitations of the agreement. 'The pledge is not a mandate,' Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, said during a news conference. 'This is an opportunity for the industry to show itself.' Oz said he wants insurers to eliminate preapprovals for knee arthroscopy, a common, minimally invasive procedure to diagnose and treat knee problems. Chris Klomp, director of the Center for Medicare at CMS, recommended prior authorization be eliminated for vaginal deliveries, colonoscopies, and cataract surgeries, among other procedures. Health insurers said the changes would benefit most Americans, including those with commercial or private coverage, Medicare Advantage, and Medicaid managed care. The insurers have also agreed that patients who switch insurance plans may continue receiving treatment or other health care services for 90 days without facing immediate prior authorization requirements imposed by their new insurer. But health policy analysts say prior authorization — a system that forces some people to delay care or abandon treatment — may continue to pose serious health consequences for affected patients. That said, many people may not notice a difference, even if insurers follow through on their new commitments. 'So much of the prior authorization process is behind the black box,' said Kaye Pestaina, director of the Program on Patient and Consumer Protections at KFF, a health information nonprofit that includes KFF Health News. Often, she said, patients aren't even aware that they're subject to prior authorization requirements until they face a denial. 'I'm not sure how this changes that,' Pestaina said. Oz acknowledged 'violence in the streets' prompted Monday's announcement. Klomp told KFF Health News that insurers were reacting to the shooting because the problem has 'reached a fever pitch.' Health insurance CEOs now move with security details wherever they go, Klomp said. 'There's no question that health insurers have a reputation problem,' said Robert Hartwig, an insurance expert and a clinical associate professor at the University of South Carolina. The pledge shows that insurers are hoping to stave off 'more draconian' legislation or regulation in the future, Hartwig said. But government interventions to improve prior authorization will be used 'if we're forced to use them,' Oz said during the news conference. 'The administration has made it clear we're not going to tolerate it anymore,' he said. 'So either you fix it or we're going to fix it.' Here are the key takeaways for consumers: 1. Prior authorization isn't going anywhere. Health insurers will still be allowed to deny doctor-recommended care, which is arguably the biggest criticism that patients and providers level against insurance companies. And it isn't clear how the new commitments will protect the sickest patients, such as those diagnosed with cancer, who need the most expensive treatment. 2. Reform efforts aren't new. Most states have already passed at least one law imposing requirements on insurers, often intended to reduce the time patients spend waiting for answers from their insurance company and to require transparency from insurers about which prescriptions and procedures require preapproval. Some states have also enacted 'gold card' programs for doctors that allow physicians with a robust record of prior authorization approvals to bypass the requirements. Nationally, rules proposed by the first Trump administration and finalized by the Biden administration are already set to take effect next year. They will require insurers to respond to requests within seven days or 72 hours, depending on their urgency, and to process prior authorization requests electronically, instead of by phone or fax, among other changes. Those rules apply only to certain categories of insurance, including Medicare Advantage and Medicaid. Beyond that, some insurance companies committed to improvement long before Monday's announcement. Earlier this year, UnitedHealthcare pledged to reduce prior authorization volume by 10%. Cigna announced its own set of improvements in February. 3. Insurance companies are already supposed to be doing some of these things. For example, the Affordable Care Act already requires insurers to communicate with patients in plain language about health plan benefits and coverage. But denial letters remain confusing because companies tend to use jargon. For instance, AHIP, the health insurance industry trade group, used the term 'non-approved requests' in Monday's announcement. Insurers also pledged that medical professionals would continue to review prior authorization denials. AHIP claims this is 'a standard already in place.' But recent lawsuits allege otherwise, accusing companies of denying claims in a matter of seconds. 4. Health insurers will increasingly rely on artificial intelligence. Health insurers issue millions of denials every year, though most prior authorization requests are quickly, sometimes even instantly, approved. The use of AI in making prior authorization decisions isn't new — and it will probably continue to ramp up, with insurers pledging Monday to issue 80% of prior authorization decisions 'in real-time' by 2027. 'Artificial intelligence should help this tremendously,' Rep. Gregory Murphy (R-N.C.), a physician, said during the news conference. 'But remember, artificial intelligence is only as good as what you put into it,' he added. Results from a survey published by the American Medical Association in February indicated 61% of physicians are concerned that the use of AI by insurance companies is already increasing denials. 5. Key details remain up in the air. Oz said CMS will post a full list of participating insurers this summer, while other details will become public by January. He said insurers have agreed to post data about their use of prior authorization on a public dashboard, but it isn't clear when that platform will be unveiled. The same holds true for 'performance targets' that Oz spoke of during the news conference. He did not name specific targets, indicate how they will be made public, or specify how the government would enforce them. While the AMA, which represents doctors, applauded the announcement, 'patients and physicians will need specifics demonstrating that the latest insurer pledge will yield substantive actions,' the association's president, Bobby Mukkamala, said in a statement. He noted that health insurers made 'past promises' to improve prior authorization in 2018. Meanwhile, it also remains unclear what services insurers will ultimately agree to release from prior authorization requirements. Patient advocates are in the process of identifying 'low-value codes,' Oz said, that should not require preapproval, but it is unknown when those codes will be made public or when insurers will agree to release them from prior authorization rules. Sausser and Galewitz write for KFF Health News, a national newsroom focused on in-depth journalism about health issues and a core program of KFF, a non-profit organization specializing in health policy research, polling, and journalism.
Yahoo
2 days ago
- Business
- Yahoo
CVS unit ordered to pay $95 million in Medicare whistleblower lawsuit
By Jonathan Stempel (Reuters) -CVS Health's pharmacy benefit manager unit must pay the U.S. government $95 million after a federal judge found it overcharged Medicare for prescription drugs. Chief Judge Mitchell Goldberg in Philadelphia ordered the payment by CVS Caremark on Wednesday, following an eight-day non-jury trial in March in the whistleblower case. Goldberg will decide after further briefing whether to triple the award to $285 million under the federal False Claims Act. The case was brought in 2014 by Sarah Behnke, a former head actuary for Medicare Part D at Aetna. Behnke accused CVS Caremark of having since 2010 caused health insurers, such as Aetna, to submit inflated claims to the Centers for Medicare and Medicaid Services (CMS), while pharmacies such as Rite Aid and Walgreens were paid less. CVS bought Aetna in 2018. Despite ruling for CVS Caremark on some claims, Goldberg concluded in a 105-page decision that the unit knew it was managing drug prices in a manner that boosted margins, and therefore profit. "Although it is true that Aetna had the ultimate responsibility to submit the claims, I disagree that this responsibility absolves Caremark of culpability," Goldberg wrote. CVS, based in Woonsocket, Rhode Island, said on Thursday it was disappointed in the rulings against CVS Caremark. The False Claims Act lets whistleblowers sue on behalf of the government and share in recoveries, typically 15% to 30%. Though not directly involved in Behnke's case, the federal government said in an October 2023 court filing it had a strong interest in ensuring that Medicare Part D did not pay inflated drug prices, and information reported by plan sponsors and pharmacy benefit managers to CMS reflects the true costs. The case is US ex rel Behnke v CVS Caremark Corp et al, U.S. District Court, Eastern District of Pennsylvania, No. 14-00824. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
CVS unit ordered to pay $95 million in Medicare whistleblower lawsuit
By Jonathan Stempel (Reuters) -CVS Health's pharmacy benefit manager unit must pay the U.S. government $95 million after a federal judge found it overcharged Medicare for prescription drugs. Chief Judge Mitchell Goldberg in Philadelphia ordered the payment by CVS Caremark on Wednesday, following an eight-day non-jury trial in March in the whistleblower case. Goldberg will decide after further briefing whether to triple the award to $285 million under the federal False Claims Act. The case was brought in 2014 by Sarah Behnke, a former head actuary for Medicare Part D at Aetna. Behnke accused CVS Caremark of having since 2010 caused health insurers, such as Aetna, to submit inflated claims to the Centers for Medicare and Medicaid Services (CMS), while pharmacies such as Rite Aid and Walgreens were paid less. CVS bought Aetna in 2018. Despite ruling for CVS Caremark on some claims, Goldberg concluded in a 105-page decision that the unit knew it was managing drug prices in a manner that boosted margins, and therefore profit. "Although it is true that Aetna had the ultimate responsibility to submit the claims, I disagree that this responsibility absolves Caremark of culpability," Goldberg wrote. CVS, based in Woonsocket, Rhode Island, said on Thursday it was disappointed in the rulings against CVS Caremark. The False Claims Act lets whistleblowers sue on behalf of the government and share in recoveries, typically 15% to 30%. Though not directly involved in Behnke's case, the federal government said in an October 2023 court filing it had a strong interest in ensuring that Medicare Part D did not pay inflated drug prices, and information reported by plan sponsors and pharmacy benefit managers to CMS reflects the true costs. The case is US ex rel Behnke v CVS Caremark Corp et al, U.S. District Court, Eastern District of Pennsylvania, No. 14-00824. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
2 days ago
- Business
- Reuters
CVS unit ordered to pay $95 million in Medicare whistleblower lawsuit
June 26 (Reuters) - CVS Health's (CVS.N), opens new tab pharmacy benefit manager unit must pay the U.S. government $95 million after a federal judge found it overcharged Medicare for prescription drugs. Chief Judge Mitchell Goldberg in Philadelphia ordered the payment by CVS Caremark on Wednesday, following an eight-day non-jury trial in March in the whistleblower case. Goldberg will decide after further briefing whether to triple the award to $285 million under the federal False Claims Act. The case was brought in 2014 by Sarah Behnke, a former head actuary for Medicare Part D at Aetna. Behnke accused CVS Caremark of having since 2010 caused health insurers, such as Aetna, to submit inflated claims to the Centers for Medicare and Medicaid Services (CMS), while pharmacies such as Rite Aid and Walgreens (WBA.O), opens new tab were paid less. CVS bought Aetna in 2018. Despite ruling for CVS Caremark on some claims, Goldberg concluded in a 105-page decision that the unit knew it was managing drug prices in a manner that boosted margins, and therefore profit. "Although it is true that Aetna had the ultimate responsibility to submit the claims, I disagree that this responsibility absolves Caremark of culpability," Goldberg wrote. CVS, based in Woonsocket, Rhode Island, said on Thursday it was disappointed in the rulings against CVS Caremark. The False Claims Act lets whistleblowers sue on behalf of the government and share in recoveries, typically 15% to 30%. Though not directly involved in Behnke's case, the federal government said in an October 2023 court filing it had a strong interest in ensuring that Medicare Part D did not pay inflated drug prices, and information reported by plan sponsors and pharmacy benefit managers to CMS reflects the true costs. The case is US ex rel Behnke v CVS Caremark Corp et al, U.S. District Court, Eastern District of Pennsylvania, No. 14-00824.
The Independent
2 days ago
- Business
- The Independent
Multi-millionaire Trump official Dr. Oz appears not to know how credit cards work
Centers for Medicare and Medicaid Administrator Dr. Mehmet Oz appeared to let slip that he doesn't quite grasp how credit cards work. The former revered heart surgeon-turned-television host appeared on Fox News' Ingraham Angle to discuss America's largest health insurance companies pledging to streamline prior authorization. After giving a confusing analogy that compared approving procedures to credit card transactions, Oz made an unintentional admission: he doesn't know how one works. 'We've insisted on a dashboard. They have to be public about what they're doing,' he told Laura Ingraham on Wednesday. 'We want to know, for example, by the end of this year, can you do these examinations instantaneously?' 'Like a credit card,' Oz, who boasts an estimated $200 million net worth, continued. 'When you put it into the machine to buy something, they don't prior authorize you. You either have money in the bank or you don't.' Credit card companies do prior authorization on every transaction to determine whether money can be spent, which includes checking if the card is valid, that there's enough credit available, and if there are any signs of fraud. Individuals also borrow and spend money on their payment cards that they do not physically have in the bank. Oz was seemingly trying to illustrate that medical approvals should be quick and automated, like credit card checks. UnitedHealthcare, Aetna, Cigna, and Humana were among dozens of medical insurance companies that agreed to several measures on Monday, including making fewer medical procedures subject to prior authorization. If the companies follow through, patients would have to jump through fewer bureaucratic hoops, receive faster treatment approvals, and have enhanced continuity of care. Speaking to reporters Monday, Oz said that the pledge is 'not a mandate,' adding: 'This is an opportunity for the industry to show itself.' The CMS head also said he wants insurers to eliminate preapprovals for knee arthroscopy, a common, uncomplicated procedure to diagnose and treat knee issues. On Wednesday, Oz explained that he and Health and Human Services Secretary Robert F. Kennedy Jr. went to the insurance industry directly to tell them their old model was 'inefficient.' ''Secretary Kennedy feels this is wrong, the president feels this is wrong, we have to make a deal,'' he told Ingraham of his apparent dressing down of executives. ''So either you do it or we're gonna do it for you, and it's a lot less painful if you guys get together and figure this out and actually make a pledge.''
