GAO calls on CMS to continue prior authorization experiments

The CMS hasn't moved to continue prior authorization experiments even though they could save Medicare billions of dollars, according to the U.S. Government Accountability Office.

Under the experiments, the CMS only pays for some items and services after providers and medical product suppliers have shown they complied with coverage and payment rules. The CMS uses prior authorization in Medicare for non-emergency ambulance rides, hyperbaric oxygen therapy, home health services and power wheelchairs.

The CMS may have saved as much as $1.9 billion thanks to prior authorization since it started the experiments in 2012.

But most of the experiments have ended or will end soon, and the CMS hasn't announced plans to continue the vast majority of those efforts, the GAO said in a report released Monday. One exception involves power wheelchairs, which fall under a permanent prior authorization program.

"By not taking steps, based on results from the evaluations, to continue prior authorization, CMS risks missed opportunities for achieving its stated goals of reducing costs and realizing program savings by reducing unnecessary utilization and improper payments," GAO said.

Providers and suppliers have struggled with prior authorization, the GAO found.

It can take months to obtain necessary documentation from referring physicians and other relevant parties before submitting a prior authorization request, and clinicians don't have financial incentives to provide that information.

Referring physicians aren't affected if a durable medical equipment, ambulance or home health claim is denied due to insufficient documentation, the GAO said.

Also, smaller ambulance providers that were not defrauding Medicare but had business models centered around repetitive, non-emergency transports have closed.

CMS officials said the agency was evaluating the prior authorization programs and would take GAO's findings and recommendations into consideration.

The agency indicated it is considering new prior authorization experiments for items such as hospital beds and oxygen concentrators because these have high utilization or improper payment rates.