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Moves Afoot to Improve Prior Authorization Times, Efficiency

The Centers for Medicare and Medicaid Services has proposed new rules aimed at streamlining the prior approval process for most health plans in the U.S.

Under the proposal, starting in 2026, insurers would be required to render a decision within seven days for a non-urgent service or item (compared to the current 14 days), and 72 hours if it is urgent.

It would also require most group and individual health plans, Medicare Advantage, Medicaid managed care and state Medicaid agencies to implement electronic prior authorization systems by 2026 and streamline their processes for approving care.

The rule is aimed at tackling one of the biggest headaches for patients and practitioners alike. Prior authorization can sometimes take time to receive, often delaying much-needed care. Waiting for approval can have serious consequences, with studies finding:

  • It often leads to delays in care for serious conditions like cancer.
  • It often leads to more people being hospitalized as their condition worsens as they wait for care or medicine to be approved.

Prior authorization rules can also be confusing, time-consuming and frustrating for both patients and doctors, with the latter often feeling as if the insurer is questioning their expertise.

Insurers use prior authorization as a cost-containment tool that requires providers to seek approval from them before referring a patient for certain services and prescribing some medications. Studies have found that the number of prior authorization requests has exploded in the last few years, straining the system and delaying care.

The proposed rule

The goal of the rule is to reduce the bureaucracy around prior authorizations and cut wait times for responses that some providers say sometimes take weeks to get approved.

The proposed rule — a revised version of a similar one floated by the Trump administration that was withdrawn due to cost concerns — applies to all Affordable Care Act-qualified health plans, Medicare Advantage plans and state Medicaid programs.

As mentioned above, the time insurers have to approve a prior authorization request would be reduced to seven days, and 72 hours if it is urgent. Additionally, if the insurer denies the request, it would be required to include a specific reason for doing so.

Under the proposed rule, insurers will be required to build and maintain a system for electronically approving prior authorizations, known as a fast healthcare interoperability resources application programming interface (FHIR API).  

The FHIR API must be able to ascertain whether a prior authorization request is required and “facilitate the exchange of prior authorization requests and decisions” from the provider’s electronic health records or practice management system.

Some doctor’s groups have said the new rule doesn’t go far enough and that seven days is still too long.


Wellness Programs Grow in Wake of Pandemic

Employers have often long struggled to boost participation in their wellness programs, but the COVID-19 pandemic changed that as people started looking for ways to better care for themselves both physically and emotionally.

The pandemic added fuel to the country’s mental health crisis and more people than ever are seeking out counseling to cope with the stresses of life.

Others stopped taking care of their overall health, by exercising less and drinking too much and putting off regular checkups, leaving them worse off health-wise than they were before the pandemic.

Wellness programs can bridge the gap between employees’ overall health and your group health insurance. While the latter covers their medical and pharmaceutical needs, these programs can help them maintain healthy lifestyles, and can also help them better deal with stressors in their lives.

On top of that, they can improve employee satisfaction and boost their productivity.

The benefits to your organization

A five-year study by Go365, a personalized wellness and rewards program, found that highly engaged participants:

  • Paid an average of $116 less in health care than low-engaged members.
  • Compared with low-engaged members, reported 55% fewer “unhealthy days,” which can be an indicator of reduced productivity, absenteeism or presenteeism.
  • Had an average of 35% fewer emergency room visits and 30% fewer hospital admissions than low-engaged members.

Wellness programs continue growing in number and you may want to put together a list and survey your employees about which of the programs they would most like to see. Some are more expensive than others, and some costs are negligible.

These programs typically aim to promote mental and physical health and fitness, and run the gamut. Some of the most common wellness programs include:

  • Gym memberships,
  • Smoking cessation programs,
  • Diabetes management programs,
  • Weight loss programs, and preventative health screenings,
  • Stress management,
  • Parent coaching and support,
  • Recreational programs such as company-sponsored sports teams,
  • Nutritional and food guidance programs, and
  • Financial security programs, which can include access to budgeting resources, debt management tools, student loan counseling, emergency savings plans, and more.

You can also provide incentives such as premium discounts and cash rewards for participating in a program or achieving certain health goals, like for weight loss or stopping smoking.

Getting it started

Since the pandemic started, more employers have started offering virtual wellness sessions for their employees, while those with existing programs have bolstered them with new ones, such as financial wellness.

But to succeed, the programs need adequate levels of management and employee buy-in. Make sure you are choosing programs your employees actually want and will use. Don’t waste time and energy on wellness initiatives that they don’t find engaging or beneficial.

Instead, survey your staff to find out which wellness plans they find the most appealing.

Also, it’s important to stick to your budget and not to overpromise what you can deliver to your employees. Be realistic as you explore your choices.

The expense can be worth it if it’s tailored correctly. Employees who are healthy and happy have higher levels of productivity than those who are not. Wellness programs also lead to increased engagement, improved morale and retention, and reduced health risks.


Employers ‘Unwavering’ in Providing Group Health Benefits: Research

Large employers are unwavering in their plans to continue offering group health plans to their workers instead of funding individual reimbursement accounts that would allow them to shop for plans on government-run exchanges, according to new research.

The poll of 26 health benefits decision-makers at large firms, carried out by The Commonwealth Fund and the Employee Benefits Research Institute (EBRI), found that despite rising premium and health care costs, they felt obligated to offer health insurance instead of shunting employees to exchanges.

Employers since 2019 have been allowed to fund individual coverage health reimbursement accounts (ICHRAs) with pre-tax dollars for their employees to satisfy the Affordable Care Act’s employer mandate. Workers are required to use their ICHRA funds to purchase a plan on healthcare.gov or a state-run health insurance exchange.

However, large employers feel they can do a better job at providing their workers with coverage, according to the report.

“Most interviewees expressed a strong skepticism that their firms would drop health benefits or direct their workers toward marketplace exchanges,” said Jake Spiegel, research associate of health and wealth benefits research at EBRI. “Broadly, companies continue to view their health benefits as a recruitment and retention tool and cutting these benefits would hamper their efforts to cultivate a strong workforce.”

The health benefits decision-makers at large firms told researchers that jettisoning their group health insurance benefits would make it more difficult to attract and retain talent. They said there were other benefits to providing group health coverage to their workers, including:

  • They felt they could offer their workers a better deal than what was available to them on public exchanges. “We liked to have control. We can do a better job with design than the exchanges.” — Health care company benefits executive
  • They felt they simplified health insurance for their employees, who would possibly feel overwhelmed by all the choices on public exchanges. “We don’t want [workers] out shopping on their own, [exchange plans] aren’t easy to understand.” — Benefits executive at a financial services company
  • They viewed their companies as paternalist, meaning they have a responsibility to also help their workers make better health insurance decisions. “It would make workers feel like you were cutting and running.” — Benefits executive at a manufacturing firm
  • They didn’t want to be the first to jump out and completely disrupt their group health benefits offerings. “A big part was trepidation. Nobody wanted to be first.” — Benefits executive at an insurance company

Some of the interviewees said that funding ICHRAs and sending their workers to ACA exchanges would rob the company of the opportunity to help workers manage expensive health conditions.

For example, under IRS rules, employers may cover some drugs and services on a pre-deductible basis for workers who are enrolled in high-deductible health plans with attached health savings accounts.

But likely the biggest reason for not taking the ICHRA leap is the effect on employee satisfaction. Executives told the researchers that their workers expect them to provide a “suitable menu of health benefits options” and that they trust that their employer has shopped around for the best deal that doesn’t reduce quality.

Additionally, they felt that their workers would not be happy about being shunted to an exchange and having to take it on themselves to sift through the myriad of plans available to them at different cost and benefit structures.

“[Employees] don’t really take the time or energy to really understand, and they don’t want to. They trust us to make the decision for them,” one benefits executive told the researchers.

The takeaway

While this survey was only of large employers, market indications are that most mid-sized and smaller firms have also been sticking to providing their employees with health insurance coverage.

Offering a comprehensive group health plan is still the best way to retain and attract talent while satisfying the employer mandate under the ACA. Even for employers not subject to the mandate, to be competitive in the job market, offering health insurance is still a priority.

Finally, treading into ICHRA territory requires foresight and planning and companies have to prepare for possible blowback if the employees don’t like the exchange experience or can’t get the same coverage at the same out-of-pocket cost to them as they did before.

Doing it incorrectly, such as not funding the accounts with enough money, could open your organization up to fines.


Bill Would Pave Way for Stand-Alone Telehealth Coverage

A bipartisan group of House legislators in February reintroduced legislation from 2022 that would pave the way for employer-sponsored, stand-alone telehealth benefits plans.

The bill is important as the current law allowing health insurers to cover telehealth benefits sunsets at the end of 2024, which would be difficult for many patients and providers who have grown accustomed to telehealth visits with their physicians.

The legislation, however, takes a different approach by instead making telehealth benefits separate from a health plan.

A similar measure died in committee last year due to congressional inertia during an election year. The current legislation has bipartisan support with sponsorship by Rep. Angie Craig, D-Minnesota, Rep. Ron Estes, R-Kansas, Rep. Mikie Sherrill, D-New Jersey, and Rep. Rick Allen, R-Georgia.

The bill

The goal of the Telehealth Benefit Expansion for Workers Act would be to make stand-alone telehealth benefits separate, and not a replacement for a group health plan. Instead, employers would be able to offer them under a group health plan or group health insurance coverage as excepted benefits.

Excepted benefits are additional coverages that employers can, but are not required to, offer, like vision or dental insurance. Federal law dictates what qualifies as an excepted benefit, which necessitates the legislation to add telehealth services to the mix.

Telehealth benefits, under the legislation, would apply to all workers, even those who work part-time or seasonally.

Why is the legislation needed?

Prior to the COVID-19 pandemic, health plans were unable to cover telehealth services under the law. But, when the outbreak first started, followed by lockdowns, telemedicine was sometimes the only option patients had to get face time with their physicians.

As a result, lawmakers enacted laws that allow health plans to cover patients’ video and phone visits with their doctors. Those laws were set to sunset 151 days after the COVID-19 public health emergency expires.

But the budget bill signed into law at the end of 2022 extends and expands telehealth flexibilities under the law through Dec. 31, 2024. Those flexibilities include:

  • Expanding originating sites to include any sites where patients are located, including their homes.
  • Extending coverage and payment for audio-only telehealth services.

What’s next

This measure has only just been introduced, but since it was crafted by Democrats and Republicans, and considering the eventual sunsetting of telehealth provisions, there is some urgency in getting permanent legislation on the books.

However, as telemedicine grows in use and popularity, elected representatives may feel pressured to make permanent the current law that allows health plans to cover video and telephone visits with their physicians.