The path through the U.S. Senate is not yet certain for a bill intended to speed the prior authorization process of insurer-run Medicare Advantage plans, despite the measure having breezed through the House.
House leaders opted to move the Improving Seniors’ Timely Access to Care Act of 2021 (H.R. 3173) without requiring a roll-call vote. The measure was passed on Sept. 14 by a voice vote, an approach used in general with only uncontroversial measures that have broad support. The bill has 191 Democratic and 135 Republican sponsors, representing about three-quarters of the members of the House.
“There is no reason that patients should be waiting for medically appropriate care, especially when we know that this can lead to worse outcomes,” Rep. Earl Blumenauer (D-Ore.) said in a Sept. 14 speech on the House floor. “The fundamental promise of Medicare Advantage is undermined when people are delaying care, getting sicker, and ultimately costing Medicare more money.”
Rep. Greg Murphy, MD (R-N.C.), spoke on the House floor that day as well, bringing up cases he has seen in his own urology practice in which prior authorization delays disrupted medical care. One patient wound up in the hospital with abscess after an insurer denied an antibiotic prescription, Rep. Murphy said.
The Senate currently appears unlikely to move the prior authorization bill as a standalone measure. Instead, the bill may become part of a larger legislative package focused on health care that the Senate Finance Committee intends to prepare later this year.
The House-passed bill would require insurer-run Medicare plans to respond to expedited requests for prior authorization of services within 24 hours and to other requests within 7 days. This bill also would establish an electronic program for prior authorizations and mandate increased transparency as to how insurers use this tool.
CBO: Cost of change would be billions
In seeking to mandate changes in prior authorization, lawmakers likely will need to contend with the issue of a $16 billion cumulative cost estimate for the bill from the Congressional Budget Office. Members of Congress often seek to offset new spending by pairing bills that add to expected costs for the federal government with ones expected to produce savings.
Unlike Rep. Blumenauer, Rep. Murphy, and other backers of the prior authorization streamlining bill, CBO staff estimates that making the mandated changes would raise federal spending, inasmuch as there would be “a greater use of services.”
On Sept. 14, CBO issued a one-page report on the costs of the bill. The CBO report concerns only the bill in question, as is common practice with the office’s estimates.
Prior authorization changes would begin in fiscal 2025 and would add $899 million in spending, or outlays, that year, CBO said. The annual costs from the streamlined prior authorization practices through fiscal 2026 to 2032 range from $1.6 billion to $2.7 billion.
Looking at the CBO estimate against a backdrop of total Medicare Advantage costs may provide important context.
The increases in spending estimated by CBO may suggest that there would be little change in federal spending as a result of streamlining prior authorization practices. These estimates of increased annual spending of $1.6 billion–$2.7 billion are only a small fraction of the current annual cost of insurer-run Medicare, and they represent an even smaller share of the projected expense.
The federal government last year spent about $350 billion on insurer-run plans, excluding Part D drug plan payments, according to the Medicare Advisory Payment Commission (MedPAC).
As of 2021, about 27 million people were enrolled in these plans, accounting for about 46% of the total Medicare population. Enrollment has doubled since 2010, MedPAC said, and it is expected to continue to grow. By 2027, insurer-run Medicare could cover 50% of the program’s population, a figure that may reach 53% by 2031.
Federal payments to these plans will accelerate in the years ahead as insurers attract more people eligible for Medicare as customers. Payments to these private health plans could rise from an expected $418 billion this year to $940.6 billion by 2031, according to the most recent Medicare trustees report.