Healthcare News of Note: Payers push back on CMS prior-authorization rule

• Payers are displeased with CMS’s proposed rule to streamline prior-authorization processes.
• HHS will dole out more than $22 billion to states and local jurisdictions by Jan. 19 to support COVID-19 containment and boost lagging vaccination rollouts.
• Year-end legislation passed by Congress included modifications to the Medicare Physician Fee Schedule that will boost provider payments.

Among the industry news this past week that I found interesting and that warrants attention from healthcare finance professionals are the following stories.

1. Concerns with prior authorization

Healthcare Dive reporter Rebecca Pifer’s Jan. 6 article, Not enough time, not enough clarity: Payers push back on CMS prior authorization rule, highlights payer group responses to CMS’s proposed rule to streamline prior-authorization processes.

“Payer groups [Jan. 4] slammed a CMS proposed rule to streamline the prior authorization process, arguing the comment period was unreasonably and perhaps illegally short, the effective dates were unrealistic and the rule heaps further burden on a health system still digesting other regulatory changes while swamped by the coronavirus pandemic,” says Pifer’s article.

The article also notes:

• Compared to the usual comment period of between 30 and 60 days, the industry only had 17 days to review the almost 100-page proposal and draft comments after the rule was published in the Federal Register on Dec. 18.
• Prior authorization has become increasingly fashionable among insurers as a way to keep costs low, but clinicians dislike it because it delays care, adds to paperwork requirements and leads to physician burnout.
• Industry comments on the proposed rule were split along established lines, with provider and hospital groups not only supporting CMS’s push to revamp prior authorization but also calling for more stringent requirements for payers. Insurers argued the rule can’t be finalized as is, given the current state of the sector.

2. HHS announces $22 billion in funding

On Jan. 6, Modern Healthcare reported, “HHS will dole out more than $22 billion to states and local jurisdictions by Jan. 19 to support COVID-19 containment and lagging vaccination rollouts, the federal government announced.

“More than $19 billion will aid testing, contact tracing and other mitigation efforts as well as $3 billion to boost vaccination campaigns,” continues the article by Modern Healthcare reporter Alex Kacik. “‘We’re making these billions in new funds available to states as quickly as possible to support our combined efforts to end the pandemic,’ HHS Secretary Alex Azar said in prepared remarks.”

3. Medicare Physician Fee Schedule update

The sweeping year-end legislation passed by Congress and signed into law Dec. 27 includes modifications to the Medicare Physician Fee Schedule for CY21.

The changes boost payments to providers in an effort to address the financial losses they are enduring amid the COVID-19 pandemic. The key change is a 3.75% increase in PFS payments for the year. Funding for the increase is derived from a delay in implementation of the “inherent complexity” add-on code for evaluation and management services (Code G2211) until CY24.

Other changes include:

• Suspending the 2% payment decrease, known as sequestration, through March 31
• Reinstating the 1.0 floor on the work Geographic Practice Cost Index through CY23

CMS recalculated the PFS payment rates and conversion factor to reflect the changes, noting that the new conversion factor for CY21 is 34.8931. The revised payment rates are available in the Downloads section of the PFS final rule page.

— Nick Hut