Senate Panel Scrutinizes Medicare Advantage Denials of Prior Authorization Requests

WASHINGTON — The nation’s largest Medicare Advantage insurers have been boosting their profits by denying prior authorization requests for post-acute care, such as stays in a nursing facility, at far higher rates than they did for other types of care, a report from a Senate investigative panel says.

The Senate’s Permanent Subcommittee on Investigations launched its inquiry into the barriers to care faced by seniors enrolled in Medicare Advantage in May 2023. 

This interim report in an ongoing investigation is based on more than 280,000 pages of documents obtained from UnitedHealthcare, Humana and CVS, who together cover nearly 60% of all Medicare Advantage enrollees.  

“Insurance companies say that prior authorization is meant to prevent unnecessary medical services. But the Permanent Subcommittee on Investigations has obtained new data and internal documents from the largest Medicare Advantage insurers that discredit these contentions,” said Sen. Richard Blumenthal, D-Conn., the committee’s chairman.

“In fact, despite alarm and criticism in recent years about abuses and excesses, insurers have continued to deny care to vulnerable seniors — simply to make more money,” he said.

“Our subcommittee even found evidence of insurers expanding this practice in recent years,” Blumenthal added.

At its most basic, prior authorization, also known as preauthorization or precertification, is a process that requires a health plan’s approval before a patient receives a medical service or prescription.

In practice, the committee said, doctors accepting Medicare Advantage evaluate their senior patients, many of whom are recovering from falls, strokes and other serious ailments and recommend a course of treatment.

However, they’re not the last word on the care their patient will receive; the decision is left up to the insurer, which makes its own determination on the medical necessity of the treatment.

“This is prior authorization,” the report’s authors write. “And for beneficiaries of Medicare Advantage, the alternative to Traditional Medicare in which private companies contract with the government to administer health plans, it has become not just a bureaucratic maze, but a potential threat to their health.”

According to the committee, the magnitude and scope of prior authorization requests and denials for particular types of care has been undisclosed before now.  

Among its findings:

• Between 2019 and 2022, UnitedHealthcare, Humana and CVS each denied prior authorization requests for post-acute care at far higher rates than they did for other types of care, resulting in diminished access to post-acute care for Medicare Advantage beneficiaries.
• In 2022, both UnitedHealthcare and CVS denied prior authorization requests for postacute care at rates that were approximately three times higher than the companies’ overall denial rates for prior authorization requests. 
• In that same year, Humana’s prior authorization denial rate for post-acute care was over 16 times higher than its overall rate of denial. 

The committee also obtained internal documents that it said provided insight into each company’s use of the prior authorization, including the role of automation and predictive technologies. 

It found that:

• UnitedHealthcare’s prior authorization denial rate for post-acute care surged from 10.9% in 2020 to 16.3% in 2021, and to 22.7% in 2022.  During this time, it was implementing multiple initiatives to automate the process.
• In April 2021, an internal UnitedHealthcare committee voted to approve the use of “Machine Assisted Prior Authorization” in the company’s utilization management efforts.  They were told that the doctor or nurse reviewing the case still had to “verif[y] that the primary evidence is acceptable,” but also that testing of the technology had reduced the average time needed to review a request by six to 10 minutes.
• In early 2021, UnitedHealthcare tested a “HCE [Healthcare Economics] Auto Authorization Model.” Minutes from a meeting of an internal committee reviewing the model noted that initial testing had produced “faster handle times” for cases as well as “an increase in adverse determination rate,” which the meeting minutes attributed to “finding contraindicated evidence missed in the original review.” The committee voted to tentatively approve the model at a meeting the following month.
• UnitedHealthcare’s denial rates for skilled nursing facilities experienced particularly dramatic growth during the period covered by this report. The denial rate in 2019 was nine times lower than it was in 2022.  
• UnitedHealthcare also processed far more home health service authorizations for Medicare Advantage members during this period, underscoring concerns about insurers rejecting placements in post-acute care facilities in favor of less costly alternatives. 
• A January 2022 presentation about naviHealth included a sample patient journey in which a “naviHealth Care Coordinator completes nH Predict”— an algorithm linked in media reports to denials of care — “to determine optimal [post-acute care] placement” while the patient was hospitalized.  
• In April 2022, naviHealth issued instructions for the employees handling phone calls with providers about their requests, “IMPORTANT: Do NOT guide providers or give providers answers to the questions” used to collect information UnitedHealthcare used to make prior authorization decisions.
• In December 2022, a UnitedHealthcare working group met to explore how to use AI and “machine learning” to predict which denials of post-acute care cases were likely to be appealed, and which of those appeals were likely to be overturned.  
• CVS’ prior authorization denial rate for post-acute care remained relatively stable during the period reviewed. However, the number of post-acute care service requests CVS subjected to prior authorization increased by 57.5%, far higher than the company’s roughly 40% growth in enrollment during that period. 
• One program that CVS developed suggested the company should focus on cases it assigned “a significant probability to be denied.” 
• In a May 2019 presentation, CVS determined that it had saved more than $660 million the previous year by denying prior authorization requests its Medicare Advantage beneficiaries submitted for inpatient facilities. A majority of these savings came from “denied admissions.” 
• CVS’ testing of a predictive model for inpatient admissions for the company’s Medicare Advantage beneficiaries showed that a model built to “Maximize Approvals” jeopardized profits by approving too many cases the company felt should be denied.  
• Subsequent documents indicated that the rate of these  “Mistake” approvals for post-acute care admissions was 10 times higher during testing than it was for acute hospital admissions. 
• Facing pressure to cut costs in the Medicare Advantage division, in April 2021 CVS deployed “Post-Acute Analytics,” which used artificial intelligence to reduce the amount of money spent on skilled nursing facilities. CVS initially expected that it would save approximately $4 million per year, but within seven months, the company projected that an expanded version of the initiative would save the company more than $77 million over the next three years.
• Documents reveal that CVS saw a consistent correlation between increasing prior authorization requirements and expanding savings. A presentation for a March 2022 meeting devoted to prior authorization automation stated that the company had “deprioritized” a plan to reduce the overall volume of prior authorizations, concluding that the impact on lost savings was “too large to move forward.” 
• Humana’s denial rate for long-term acute care hospitals, the most expensive type of post-acute care, grew by 54% between 2020 and 2022, after it held training sessions devoted to prior authorization requests for that type of facility. 
• In the fall of 2019, Humana modified the templates it provided reviewers to communicate decisions on prior authorization requests and appeals of prior authorization denials.  
• Humana temporarily relaxed some prior authorization requirements during the coronavirus Public Health Emergency, and the company’s denial rate for long-term acute care hospitals in 2021 was lower than it had been in 2019. 
• After being told in an October 2021 email that there had been “a lot of discussion” about the templates used for evaluating prior authorization requests for these facilities, a Humana senior medical director led two presentations for reviewers about how requests for long-term acute care hospitals should be evaluated. 
• These presentations were given to far more of the company’s reviewers than similar presentations in 2020. They also included strategies for explaining denials to providers.  In one of these presentations, from December 2021, Humana stressed to reviewers that the post-acute facility was a “high-cost intervention” [italics in original] and urged them to pose “surprise questions” to recommending providers as a “gut check.” 
• After some of its medical reviewers objected to suggesting hospice, which is not covered by Medicare Advantage, as an alternative to long-term acute care hospitals, medical directors decided to remove the hospice reference from response letters, but some training materials for evaluating requests for these facilities continued to reference hospice as an alternative. 
• Evidence obtained by the subcommittee to date does not indicate the extent to which Humana may be using automation or predictive technologies to deny prior authorization requests.  
• However, the company has contracted with naviHealth since 2017, and Humana policies suggest contractors had greater latitude about predictive technologies.  
• Humana tended to use AI to mean “augmented intelligence” rather than artificial intelligence, but an August 2020 policy document did not make this distinction when discussing arrangements with contracted parties, stating, “Certain third parties may utilize artificial intelligence systems in support of services being provided to Humana and are covered within the scope of these guidelines, where applicable.” 

While the subcommittee continues to investigate the use of predictive technologies by Medicare Advantage insurers, committee members said the data obtained so far is troubling regardless of whether the decisions reflected in the data were the result of predictive technology or human discretion. 

Despite its work to date, it said, many of the issues that most frustrate patients and providers remain cloaked in uncertainty. 

“This is particularly true of insurers’ use of automation and predictive technologies, which PSI continues to investigate. Media reporting on this issue indicates that many of the most disturbing practices, including using artificial intelligence to fix Medicare Advantage beneficiaries’ lengths of stay in certain facilities, were accomplished through informal pressure campaigns on employees,” the report says.  

“Such wrongs are unlikely to be captured in computer code or official communication, to say nothing of regulatory filings. Although the subcommittee’s recommendations in this report are targeted at regulators, this should not distract from the fact that it is insurers who are using prior authorization to protect billions in profits while forcing vulnerable patients into impossible choices,” it continues.

“There is a role for the free market to improve the delivery of health care to America’s seniors, but there is nothing inevitable about the harms done by the current arrangement. Insurers can and must do better, for the sake of the American health care system and the patients the government entrusts to them,” the committee concludes.

Dan can be reached at [email protected] and @DanMcCue