Prior Authorization: Insurers’ Pledge Falls Short for Home Health
CMS audits of Medicare advantage plans and pledges to reduce prior authorizations are under the spotlight, but will these actions truly benefit home health providers? This News Directory 3 article delves into how increased oversight, driven by advanced technology and expanded staffing, might impact home-based care. Explore the potential for rate cuts and added strain on nonprofit providers. Despite promises, the impact on the home health sector remains uncertain, with some experts concerned the changes won’t be enough. Discover what’s next.
Updated June 27, 2025
The Centers for Medicare & Medicaid Services (CMS) is planning to intensify its audits of Medicare Advantage (MA) plans, a move that could have significant repercussions for home-based care providers.Concurrently,pledges to reduce prior authorizations have been made,but thier effectiveness in aiding the home health sector remains uncertain.
CMS will audit all eligible MA contracts each payment year and expedite audits for payment years 2018 through 2024. the agency plans to use advanced technology to analyze medical records and identify unsupported diagnoses, along with expanding its staff of medical coders. This increased oversight of Medicare Advantage could affect home health agencies.
nicole Fallon, vice president at LeadingAge, said that reduced revenues for MA organizations often lead to cuts in outlays. She added that Medicare Advantage plans may scale back options, reduce supplemental benefits, and further decrease provider payments if audits reveal significant upcoding. LeadingAge is an association of over 5,000 nonprofit aging services providers.
Nonprofit home health providers, which typically operate with thin margins, could face additional strain. With Medicare Advantage rates sometimes failing to cover visit costs, lower rates could disproportionately affect these providers and their patients.
While Fallon acknowledged the necessity of audits to preserve the Medicare Trust Fund, she also urged CMS to invest in ensuring companies follow prior authorization rules. A group of about 50 health insurance plans pledged to work with CMS to reduce prior authorizations.
Though, Fallon said it remains to be seen whether these improvements will materialize. She likened the prior authorization pledge to the Food and Drug Administration “asking” food companies to replace synthetic dyes with natural alternatives. She noted that the situation seems tenuous, as there is no guarantee of widespread or permanent change.
CMS boasted that Administrator Liz Oz secured a “pledge” for “voluntary actions” to reduce prior authorizations. Fallon said that many of the health plans’ promises align with existing requirements or those already planned for implementation. She added that they fail to specifically address the home-based care community.
Fallon said patients leaving the hospital for post-acute care face some of the highest rates of denied or delayed authorizations. She added that announcements from insurers have not addressed prior authorization practices in these settings, nor have they acknowledged the burden of ongoing concurrent review requirements.
Oz has paid special attention to home- and community-based services, visiting america’s first Program of All-inclusive Care for the Elderly (PACE) program, On Lok in San Francisco, in May.
Oz said that it’s a different way of thinking about how you can age in America.
What’s next
Such a visit could signal increased attention to in-home care and, hopefully, increased action to expand on promising models and also steps to protect providers from some of the financial and administrative challenges that have increased with the growth of managed care.