The largest Medicare Advantage insurers have prioritized profits over patient care by increasing the use of prior authorization in recent years to frequently deny post-acute care services to older adults, according to a report published Oct. 17 by the Senate Permanent Subcommittee on Investigations.
As the use of prior authorization has grown, insurers have increasingly deployed predictive technologies and artificial intelligence tools to influence their decisions, often prioritizing financial savings over medical necessity, according to the report.
"There is a role for the free market to improve the delivery of healthcare 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 healthcare system and the patients the government entrusts to them," the report concluded.
10 key takeaways:
1. In May 2023, the subcommittee launched an inquiry into the three largest Medicare Advantage companies — UnitedHealthcare, Humana, and CVS Health — seeking information and data regarding how the companies decide to approve or deny prior authorization requests and the technologies they use in the process. The subcommittee sought data about prior authorization requests and denials between 2019 and 2022.
2. In 2022, Medicare Advantage insurers overall received more than 46 million prior authorization requests and either fully or partially denied about 7.4% of them. In 2022, less than 10% of denied requests were appealed.
3. Overuse of prior authorization is a difficult issue to investigate in part because of the opacity of the current system and a lack of public reporting requirements.
According to the report, "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," meaning inappropriate processes are unlikely to be documented by MA carriers.
4. From 2019 and 2022, UnitedHealthcare, Humana, and CVS Health each denied prior authorization requests for post-acute care at far higher rates than they did for other types of care, resulting in less access to post-acute care for Medicare Advantage beneficiaries, according to the report. In 2022, UnitedHealthcare and CVS denied prior authorization requests for post-acute care at rates about three times higher than their overall denial rates for prior authorization requests. Humana’s prior authorization denial rate for post-acute care was over 16 times higher than its normal rate of denials.
5. UnitedHealthcare’s prior authorization denial rate for post-acute care increased from 10.9% in 2020, to 16.3% in 2021, to 22.7% in 2022. According to the report, the company was implementing multiple initiatives to automate the process, including through a platform called naviHealth, which is owned by Optum. In 2024, the company rebranded naviHealth to Home & Community Care.
"This majority staff report mischaracterizes the Medicare Advantage program and our clinical practices, while ignoring CMS criteria demanding greater scrutiny around post-acute care," a UnitedHealthcare spokesperson told Becker's. "Compared to beneficiaries enrolled in original Medicare, Medicare Advantage members experience 45% lower out-of-pocket costs and have more than a 40% lower rate of avoidable hospitalizations and report a 96% satisfaction rating - all at a lower cost to the government."
6. CVS Health's prior authorization denial rate for post-acute care was stable from 2019 to 2022, but the number of post-acute care service requests that required prior authorization increased by 57.5%.
"Documents reveal that CVS saw a consistent correlation between increasing prior authorization requirements and expanding savings," the report said.
"The report significantly misrepresents CVS Health's use of prior authorization," a CVS spokesperson told Becker's. "Many of the documents cited are outdated, while others are drafts or were used for internal company deliberations and therefore are not reflective of final decisions. Our Medicare Advantage prior authorization protocols are routinely audited by the Centers for Medicare & Medicaid Services and we recently received a perfect score on an audit examining compliance with the 2024 Final Rule policies. We provided extensive feedback to the committee on these errors, which unfortunately were not addressed in the final report."
7. Humana's denial rate for long-term acute care increased by 54% between 2020 and 2022.
"This is a partisan report laden with errors and misleading claims," a Humana spokesperson told Becker's. "In fact, Senator Blumenthal's team declined to correct those errors and mischaracterizations that Humana identified after reviewing certain heavily redacted excerpts prior to the report's release."
8. The subcommittee made three main recommendations for CMS: Begin collecting prior authorization information organized by service category, conduct targeted audits if prior authorization data reveals notable increases in adverse determination rates, and expand regulations for payers' utilization management committees to ensure that predictive technologies are not overshadowing human review.
9. Scrutiny of AI use by insurers has intensified in recent years. UnitedHealthcare, Humana, and Cigna are facing lawsuits alleging they wrongfully denied care to Medicare Advantage members using AI-powered algorithms. As software technologies evolve rapidly, CMS has sought to clarify the distinction between algorithms and AI, and how insurers can use them for clinical decisions.
10. The Better Medicare Alliance, a pro-MA advocacy group, issued the following statement in response to the subcommittee report: “Prior authorization works to ensure care is safe, evidence-based, and cost-effective for Medicare Advantage beneficiaries. This report paints a misleading picture of how the program operates. At the same time, we should always be working to ensure it is as responsive as possible to the needs of seniors. That is why we support ongoing efforts to improve prior authorization."