CMS prior auth pilot shrinks service use amid public backlash

Use of targeted procedures has declined six months into a six-year pilot that applied prior authorization to some Medicare services, according to a recent research letter in JAMA.

The CMS started requiring prior authorizations for procedures at higher risk of healthcare fraud, waste and abuse at the start of this year. The services tend to be expensive, high-volume outpatient services, such as epidural steroid injections for pain management, skin substitutes and high-tech nerve stimulation implants.

Volumes for these services dropped by about 20% in the six states where these prior authorizations are now required under CMS' Wasteful and Inappropriate Service Reduction Model, compared to other states after the program started. The researchers from the Schools of Public Health at the University of Minnesota and Brown University used a large dataset covering 310 million patient records from all 50 states and the District of Columbia to assess the impact of WiSER.

Epidural steroid injections, specifically, declined by about 15% from January to June, they added, singling out the procedure because of its especially high volume.

The data indicates that prior authorizations are, indeed, behind reduced volumes, researchers said. Notably, they observed no significant changes in volume for services that do not yet require prior authorization, they said.

Still, it is unclear whether the reduced volumes in question were wasteful or inappropriate versus legitimate medical care, they explained.

The CMS aims for the WiSeR Model to specifically reduce low-value care volumes, which have cost Medicare billions of dollars with minimal or no clinical benefit to members. The model seeks to close the fee-for-service loophole that rewards providers purely on volume using a technology-driven prior authorization barrier.

Under the WiSeR Model, the CMS tapped six private-sector technology vendors to streamline the prior authorization process, rather than relying on sluggish, retroactive billing audits typical of CMS workflows. These vendors use artificial intelligence and machine learning to accelerate the verification of documentation against Medicare rules, hopefully reducing the administrative burden notoriously associated with manual prior authorizations.

However, the model has drawn sharp criticism from healthcare industry stakeholders over its use of AI to approve or deny care to patients. They say these technology vendors use black-box, proprietary tools that prevent providers from understanding how AI evaluates their claims. Critics also argue that Medicare's requirement that a licensed clinician make final determinations isn't enough of a safeguard to overcome automation bias, in which clinicians frequently defer to the AI, especially given their heavy workloads.

Digital and privacy rights nonprofit Electronic Frontier Foundation even sued the CMS this spring to get more information on the model, saying it has done the opposite of what was intended: delaying care for seniors and adding to the administrative strain on providers.

Since last week, EFF has received about 1,800 pages of records regarding the model, revealing what it calls widespread problems following the model's "extremely condensed timeline" of six months after its announcement.

The records show that the CMS sent requests for information or requests for corrective action plans to at least four of the six participating vendors within the first three months of the model. These requests described delays in responses, technical failures and a lack of communication with providers, according to EFF.

The group argues that "having a human in the loop is probably not enough" to provide meaningful protections for seniors' care. The concept of maintaining a human expert for final decisions hinges on whether they have enough time to evaluate requests and the authority to override AI recommendations, EFF explained.

Senate Democrats have attempted to end WiSeR model over similar concerns about its effects on care and healthcare's already high administrative burdens. However, their bid was shut down this summer in a party-line vote by Senate Republicans.

The CMS still plans to expand the model, according to internal documents obtained by EFF, despite ongoing efforts to end or defund it. This includes adding more services subject to prior authorization, working with vendors on corrective action plans and adding a gold card program that would exempt highly compliant providers from prior authorization rules.

Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy, and health IT since 2016.