Humana Files Lawsuit Over HHS's Recent Medicare Advantage Audit Rules
September 1st, 2023

Humana is contesting a newly imposed CMS regulation which aims to tighten audit procedures for Medicare Advantage (MA) plans.

On September 1st, Humana, the second-largest MA insurer in the country, presented its case to the U.S District Court in the Northern District of Texas. The insurer requests that CMS reconsider and withdraw the newly finalized rule, emphasizing potential negative impacts on both Medicare Advantage providers and the senior citizens who rely on the MA program for their health services.

At the start of the year, CMS announced its intention to omit the fee-for-service adjuster during the risk adjustment data validation audits. This adjuster previously served to determine acceptable payment error margins, ensuring that only errors surpassing this threshold would be pursued in recoveries. This rule modification is set to be implemented for contracts originating in 2018 and later.

With the introduction of this revised audit process, CMS anticipates the possibility of recouping around $4.7 billion from MA plans over the next ten years due to overpayments. It's worth noting that various major insurance companies have, in the past, faced accusations related to Medicare Advantage discrepancies, though the industry has consistently refuted these claims.

In their lawsuit, Humana argues that CMS's updated audit process infringes upon the stipulations of the Administrative Procedure Act. Humana has pointed out that, "The CMS failed to substantiate their newly introduced auditing procedures with either empirical evidence or actuarial assessments. Instead, they relied on legal arguments that don’t appear robust upon close examination."

The broader insurance sector had reservations about this rule when CMS initially introduced it in 2018. Many insurers, Humana included, had expressed intentions of pursuing legal routes if the rule excluded the critical fee-for-service adjuster.

Earlier this year, Bruce Broussard, CEO of Humana, articulated his concerns about CMS's decision to remove the fee-for-service adjuster from MA plan audits.

A report from Bloomberg in January underscored Humana's potential vulnerability due to these clawbacks. The report suggested that up to 17% of Humana's earnings in 2023, equivalent to approximately $900 million, could be subjected to these new rules. As of June 30, Humana reported nearly 5.8 million members enrolled in Medicare Advantage, with aims of enrolling an additional 825,000 by year's end.
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A spokesperson from CMS has chosen not to comment, citing the ongoing litigation.

Discover how outsourcing prior authorization can improve revenue cycle management, ensure medical necessity, and streamline healthcare services.
Prior Authorization: A Key to Successful Revenue Cycle Management
Prior Authorization is a pre-approval or precertification process, where healthcare providers must obtain approval from a patient's insurance company for coverage of a specific medication, procedure, or service. It is a cost containment measure that ensures medical necessity, avoiding unnecessary or potentially harmful treatments. Moreover, it’s a crucial part of the revenue cycle management, impacting the bottom-line profitability of a healthcare provider and facilities.
Incorrect or incomplete Prior Authorization can lead to claim denials, increasing the financial burden on healthcare providers. However, by outsourcing Prior Authorization services, healthcare organizations can eliminate these risks, enhance revenue, and streamline their operations.
Outsourcing Prior Authorization: Why it Matters
Outsourcing Prior Authorization comes with several benefits. It can expedite the approval process, improve billing accuracy, and reduce administrative workload, freeing up valuable time and resources for patient care. This is where eliminating 'peer to peer' time becomes crucial. By outsourcing the process to professionals who understand the medical necessity, utilization, and frequency management, providers can eliminate unnecessary peer-to-peer discussions, improving efficiency and productivity.
Furthermore, outsourcing provides access to skilled professionals who understand complex Prior Authorization requirements, ensuring compliance and reducing the risk of denials. They work closely with healthcare providers to gather necessary medical records, submit requests, follow up with insurance companies, and manage the entire process efficiently.
Understanding the Importance of Prior Authorization in Different Healthcare Services
Certain services and specialties may have stricter Prior Authorization requirements. Here's why it becomes indispensable in these situations:

1. Medicare: Medicare often requires Prior Authorization for specific services to verify that the procedure is medically necessary. Failure to get this authorization could lead to Medicare denying the claim.
2. Workers Compensation claims: Similarly, for Workers Compensation claims, Prior Authorization ensures that the treatments are appropriate for the work-related injury, and the costs are rightfully borne by the insurer.
3. Motor Vehicle Accident Claims: Prior Authorization verifies that the treatment is necessary due to injuries from a motor vehicle accident and not pre-existing conditions, ensuring that the claim is processed without denials.
4. Surgical Oncology Services: These treatments are often high-cost, and insurers require Prior Authorization to confirm that the recommended treatments align with established oncology care guidelines.
5. Interventional Pain Management Services: As this field encompasses a wide range of treatments, Prior Authorization is required to validate the medical necessity and appropriateness of the recommended procedures.
6. Orthopedic Surgery Services: Prior Authorization is crucial here to avoid unnecessary surgeries, reduce healthcare costs, and ensure that the patient receives the most effective care.
7. Robotic Surgeries and ASC Services: Due to the high cost and complexity of robotic surgeries and Ambulatory Surgical Center (ASC) services, insurers need to confirm that these procedures are medically necessary and will provide improved patient outcomes.

Outsourcing the prior authorization process work in the healthcare industry, including medical practices, providers, hospitals, and surgery centers, can offer several benefits. Here are some key advantages:

• Cost savings: Outsourcing prior authorization can help reduce operational costs for healthcare organizations. By delegating the process to a specialized third-party service provider, they can avoid investing in additional staff, infrastructure, and technology required for in-house authorization management.
• Increased efficiency: Prior authorization can be a time-consuming and complex process involving extensive paperwork, follow-ups, and coordination with insurance companies. Outsourcing this task to experienced professionals allows healthcare providers to streamline their operations and focus on delivering patient care. Outsourcing companies often have dedicated teams that specialize in navigating insurance requirements and obtaining timely approvals, leading to faster turnaround times.
• Expertise and specialized knowledge: Prior authorization requirements and guidelines can vary across insurance providers, policies, and medical procedures. Outsourcing to a dedicated service provider ensures access to professionals with comprehensive knowledge of various insurance plans and extensive experience in handling prior authorizations. Their expertise can help improve accuracy and reduce the likelihood of denials or delays.
• Enhanced revenue cycle management: Effective prior authorization management is crucial for optimizing revenue cycles. Outsourcing can lead to better cash flow management by reducing claim denials and improving the rate of successful claims submission. This can positively impact the financial health of medical practices, providers, hospitals, and surgery centers.
• Reduced administrative burden: Handling prior authorization internally requires significant administrative resources, including staff time, training, and ongoing updates to stay abreast of changing guidelines. Outsourcing transfers the administrative burden to external professionals, freeing up internal resources for more critical tasks and minimizing the risk of errors or oversights.
• Compliance and risk mitigation: Prior authorization processes must adhere to complex regulatory requirements, such as HIPAA (Health Insurance Portability and Accountability Act) and payer-specific regulations. Outsourcing to a reputable service provider can ensure compliance with these regulations and minimize the risk of penalties or legal issues associated with non-compliance.
• Scalability and flexibility: Healthcare organizations often experience fluctuations in the volume of prior authorization requests. Outsourcing provides the flexibility to scale up or down based on demand. Service providers can handle higher volumes efficiently and accommodate changes in requirements, such as new insurance plans or updated guidelines.

Despite these benefits, it's important to note that outsourcing does require careful selection of a reliable and trustworthy service provider. Evaluating their track record, reputation, security measures, and compliance standards is essential to ensure a successful outsourcing partnership.

• Reduced staffing challenges: Managing prior authorizations internally can require a dedicated team of staff members who specialize in insurance verification, documentation, and follow-up. Outsourcing allows healthcare organizations to overcome staffing challenges, such as shortages or high turnover rates, by relying on a dedicated team from the outsourcing provider. This ensures continuity and consistency in the authorization process.
• Better resource allocation: By outsourcing the prior authorization process, healthcare organizations can allocate their resources, including personnel and infrastructure, more strategically. They can redirect staff members who were previously involved in authorization tasks to other critical areas where their skills and expertise are needed the most. This helps optimize resource allocation and improve overall operational efficiency.
• Improved quality assurance: Reputable outsourcing providers often have robust quality assurance processes in place. They have established protocols for accuracy checks, documentation reviews, and adherence to industry standards. By leveraging their quality assurance measures, healthcare organizations can minimize errors, ensure compliance, and maintain a high level of accuracy in the prior authorization process.
• Competitive advantage: Outsourcing the prior authorization process can provide a competitive edge for healthcare organizations. With a streamlined authorization workflow and faster turnaround times, they can attract more patients and referrals. The ability to expedite the authorization process and offer efficient services distinguishes healthcare providers in a crowded marketplace.
• Access to specialized services: Some outsourcing providers offer additional specialized services along with prior authorization, such as eligibility verification, claims management, and revenue cycle management. Partnering with such comprehensive service providers can streamline multiple aspects of the revenue cycle, further optimizing operational efficiency and financial performance.
• Faster implementation and onboarding: Outsourcing providers specialize in the prior authorization process and have established workflows and systems in place. This enables them to quickly implement and onboard healthcare organizations, minimizing the time and effort required for integration. Rapid implementation allows healthcare organizations to start reaping the benefits of outsourcing without significant delays.
• Improved accuracy and reduced errors: The prior authorization process involves meticulous documentation and adherence to specific guidelines. Outsourcing providers have dedicated teams with expertise in navigating complex authorization requirements. Their attention to detail and experience in handling prior authorizations can significantly reduce errors and inaccuracies in the documentation, leading to a higher rate of successful authorizations.
• Enhanced security and data protection: Outsourcing providers prioritize data security and implement robust measures to protect sensitive patient information. They adhere to industry standards and regulations to ensure secure storage, transmission, and handling of patient data during the prior authorization process. This helps healthcare organizations mitigate the risks associated with data breaches and maintain patient confidentiality.
• Customized solutions and scalability: Outsourcing providers understand that different healthcare organizations have unique needs and requirements. They can offer customized solutions tailored to the specific workflows and preferences of the healthcare organization. Moreover, outsourcing provides scalability, allowing healthcare organizations to adapt to fluctuations in authorization volumes without compromising efficiency or quality.
• Access to additional support and resources: In addition to prior authorization expertise, outsourcing providers may offer supplementary services and resources. These can include patient advocacy, appeals and denials management, training and education programs, and customer support. Access to these additional resources can further enhance the overall effectiveness of the prior authorization process.
• Stay updated with industry changes: Keeping up with evolving insurance policies, regulatory guidelines, and industry trends can be a daunting task. Outsourcing providers are responsible for staying updated with these changes, ensuring that their processes align with the latest requirements. By outsourcing, healthcare organizations can leverage the provider's knowledge and expertise to navigate the complex landscape of prior authorizations.

It's important for healthcare organizations to conduct thorough due diligence when selecting an outsourcing partner. Consider factors such as their reputation, experience, client testimonials, security measures, compliance standards, and the flexibility to accommodate specific organizational needs.

Why Choose GoHealthcare Practice Solutions for Your Prior Authorization Needs?
Among the plethora of companies offering Prior Authorization outsourcing, GoHealthcare Practice Solutions stands out as a trusted and efficient partner. Our organization is rooted in the belief that healthcare providers should focus on what they do best – providing quality patient care – while we handle the intricacies of Prior Authorization.
We have a deep understanding of the healthcare industry and the challenges it faces. This understanding allows us to tailor our services to suit your unique needs, creating customized solutions that deliver measurable results. Here are some reasons why GoHealthcare Practice Solutions is the ideal choice for your Prior Authorization outsourcing needs:
Expertise and Experience: GoHealthcare Practice Solutions brings a wealth of experience and expertise to the table. Our team of professionals is well-versed in handling Prior Authorization for a wide range of services, ensuring a high accuracy rate and minimal denials.
Compliance and Accuracy: We prioritize compliance and accuracy, staying updated with the latest regulations and changes in insurer policies. This proactive approach reduces the risk of non-compliance and ensures that your Prior Authorization process is always in line with the latest requirements.
Customized Solutions: We understand that each healthcare provider is unique, with specific needs and challenges. That's why we offer tailored solutions to suit your specific requirements, processes, and objectives.

At GoHealthcare Practice Solutions, we believe in building partnerships, not just business relationships. We are committed to helping you navigate the complexities of Prior Authorization, freeing your team to focus on patient care and clinical services.
By choosing us as your Prior Authorization outsourcing partner, you're not just choosing a service provider; you're choosing a strategic ally who will work with you to drive growth, improve efficiency, and shape a sustainable future for your healthcare organization. Trust GoHealthcare Practice Solutions to transform your Prior Authorization process and see the difference it makes to your bottom line.
In the ever-evolving healthcare landscape, we stand by you as your reliable partner, powering your journey towards excellence with our comprehensive, efficient, and innovative Prior Authorization solutions.

05/18/2023 Wednesday:​

On Wednesday, a Senate subcommittee asked top Medicare Advantage insurers to disclose internal documents that reveal their decision-making process for healthcare coverage. The request was made during a hearing on healthcare delays and denials under the Medicare Advantage program.

The committee is concerned about the detrimental effects of these decisions on patients needing skilled nursing care. The chairman, Richard Blumenthal, said there's increasing evidence that insurers are using algorithms, instead of medical professionals, to make care denial decisions. These decisions often affect seriously ill patients who require specialized or rehabilitation care before going home.

Blumenthal said that while these algorithms are described as mere tools by insurers, the repeated denials they cause cannot be ignored. He emphasized the need for transparency around these algorithms, which the insurers often label as proprietary.

Blumenthal also linked the continual need for prior authorizations or premature ending of certain healthcare coverages to insurers' profit motives. He shared data indicating that Medicare Advantage plans have higher profit margins per insured person compared to other insurance markets.

Letters have been sent to CVS-Aetna, United Heath, and Humana—companies that collectively cover more than half of all Medicare Advantage beneficiaries—requesting more details on their operational practices.

The Department of Health and Human Services’ Office of Inspector General testified that Medicare Advantage plans' criteria should align with original Medicare. However, she pointed out the potential incentive for insurers to deny services due to the fixed payment system in Medicare Advantage.

A report from last year highlighted the frequent denial of skilled nursing stays by Medicare Advantage plans, causing a decrease in stays and the length of such stays for skilled nursing providers.

Witnesses discussed the issues surrounding denial of skilled nursing care, highlighting that Medicare Advantage plan holders often face a complicated process to appeal their denied coverage. Patients caught in this system often have to choose between paying out of pocket or leaving the facility against medical advice. Appeals that are eventually approved can take up to a year to be reimbursed.

The hearing also examined the difficulty in controlling insurers' practices that help them manage risk. Changing these practices could lead to higher costs for the government. However, the focus of the subcommittee members seemed to be on the personal hardships caused by coverage concerns.

Personal stories shared included that of a widow from Connecticut, who detailed her struggles to secure intensive therapy for her husband following the removal of a brain lesion. The emotional and financial strain of navigating the healthcare system added to the distress of dealing with her husband's health crisis.

The committee's examination of Medicare Advantage's internal workings underscores the larger concerns about private insurance companies' role in managing public health benefits. It also draws attention to the long-debated issue of transparency in how these companies operate, particularly in their decision-making process for providing coverage.

Given the fixed payment system in Medicare Advantage, insurance companies may have financial incentives to limit services provided to beneficiaries, leading to a conflict of interest between ensuring quality care and maintaining profitability.

Testimonies and personal stories shared during the hearing highlighted this concern. They also underscored the need for reform, particularly in areas such as skilled nursing care and rehabilitation services. While these services are often crucial in recovery, they are also costly, leading to frequent denials that can delay or impede necessary treatment.

The committee expressed interest in potentially legislating to improve the situation if necessary. However, the potential for increased governmental costs presents a significant obstacle, suggesting the need for a balanced approach that ensures both adequate patient care and sustainable cost management.

An additional point of concern is the use of artificial intelligence and algorithms in decision-making. There's growing evidence that these tools may be contributing to systematic denials of care. While they may increase efficiency, there's a risk that they could lead to arbitrary or inappropriate denial of services, particularly if they are not overseen or understood adequately.

The shift to more transparency in the Medicare Advantage plans, which now cover more than half of all Medicare beneficiaries, could result in significant changes to how these plans operate and provide coverage. However, the details of these potential changes and their impact on beneficiaries, insurance companies, and overall healthcare costs remain to be seen.

As of now, the committee has put the major insurance companies on notice, seeking more information on their practices and signaling their intent to improve the system for patients who depend on Medicare Advantage for their healthcare needs.

More on this news. Read here - ​https://www.mcknights.com/news/impossible-medicare-advantage-denials-decried-during-senate-hearing/