New Biden rule cracks down on insurers’ use of prior authorization

A new Biden administration rule released Wednesday aims to streamline the prior authorization process used by insurers to approve medical procedures and treatments. 

Prior authorization is a common tool used by insurers but much maligned by doctors and patients, who say it’s often used to deny doctor-recommended care.  

Under the final rule from the Centers for Medicare and Medicaid Services, health insurers participating in Medicare Advantage, Medicaid or the ObamaCare exchanges will need to respond to expedited prior authorization requests within 72 hours, and standard requests within seven calendar days. 

The rule requires all impacted payers to include a specific reason for denying a prior authorization request. They will also be required to publicly report prior authorization metrics. 

“When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner,” Health and Human Services Secretary Xavier Becerra said in a statement. “Too many Americans are left in limbo, waiting for approval from their insurance company. Today the Biden-Harris Administration is announcing strong action that will shorten these wait times by streamlining and better digitizing the approval process.”   

The rule, which could impact millions of people, was released more than a year after it was proposed. It represents the Biden administration’s strongest efforts to force insurers to make changes to one of the most contentious practices in health care.  

A bipartisan majority from both chambers of Congress have been calling on the White House to finalize a regulation that would overhaul prior-authorization requirements within Medicare Advantage. 

Insurers have said prior authorization is a necessary way to control costs and cut down on unnecessary and expensive treatments. But doctors and patients accuse insurers of using the process as an obstacle to necessary patient care, often forcing providers to navigate complex and widely varying paperwork requirements or face long waits for decisions. 

A KFF study found that Medicare Advantage plans issued more than 35 million prior authorization requests in 2021. More than 2 million of these requests were fully or partially denied. 

Traditional Medicare patients are only required to obtain prior authorization for a limited set of services. However, virtually all Medicare Advantage enrollees were enrolled in a plan that required prior authorization for some services in 2022. 

But the new rules don’t apply to veterans who receive their care through the Department of Veterans Affairs or the estimated 153 million Americans covered by private, employer-sponsored plans. 

For some payers, this new time frame for standard requests cuts current decision timeframes in half, HHS said. 

The agency estimated that the requirements would lead to cost-saving efficiencies, saving doctor practices and hospitals more than $15 billion in 10 years.