HHS pilot program raises Democratic concerns over Medicare red tape

The Hill

10 hours ago

House Democrats are sounding the alarm and demanding more information about a new Department of Health & Human Services (HHS) demonstration they say will increase red tape by adding prior authorization requirements in Medicare.
Led by Reps. Suzan DelBene (D-Wash.) and Ami Bera (D-Calif.), a group of 17 Democrats questioned why HHS would want to test adding prior authorization requirements in traditional Medicare when the Trump administration is touting efforts to reduce the practice in Medicare Advantage (MA).
Traditional Medicare has rarely required prior authorization, but private MA plans have come under fire for relying on the controversial practice as a tool to increase profits.
'The Trump Administration publicly recognized the harm of prior authorization…And yet, not a week after these statements, CMS put forward a new proposal to increase the utilization of prior authorization in a type of health coverage that had seldom used the tactic before, replacing doctor's medical knowledge with an algorithm designed to maximize care denial in order to increase profits,' the lawmakers wrote in a letter to Centers for Medicare and Medicaid Services Administrator Mehmet Oz.
The lawmakers are concerned about a new CMS pilot program to test a model targeting 'wasteful, inappropriate services in Original Medicare.'
Under the model, CMS will partner with private companies, including some of the Medicare Advantage plans that are under fire for using prior authorization to deny a clinician's request to provide care.
The model will require prior authorization for a list of outpatient procedures that the agency has flagged as vulnerable to fraud, waste and abuse, or inappropriate use.
Participants will be rewarded based on the 'effectiveness of their technology solutions' for reducing spending on medically unnecessary or non-covered services. The lawmakers said they were concerned about creating perverse incentives that reward the companies that deny the most care.
'Prior authorization has long been abused, and it is bad for patients and providers,' the lawmakers wrote.
An analysis of 2023 HHS data from KFF found about 81 percent of denials were partially or fully overturned after being appealed.
'The use of prior authorization in Medicare Advantage shows us that, in practice, [the demonstration] will likely limit beneficiaries' access to care, increase burden on our already overburdened health care work force, and create perverse incentives to put profit over patients,' the letter stated.
The letter asked CMS for details on the pilot's scope, implementation plan and safeguards for beneficiaries.
Meanwhile, the Trump administration is touting voluntary pledges they have received from the health insurance industry to streamline and reform the prior authorization process for MA plans. Lawmakers said the move shows the administration recognizes the harms of prior authorization.
'There's violence in the streets over these issues,' Oz said during an event announcing the industry pledges.