A new analysis from KFF and Health Management Associates takes a dive into prior authorization practices for Medicaid managed care organizations.
The study polled state programs on policies in place as of July 2024 and found that more than half of the 36 states that responded required that insurers make “standard” prior auth determinations within seven days or less. In January, new federal regulations will take effect that mandate that same time frame.
A smaller number of states, 12 of the 36 respondents, require managed care plans to provide denial notifications electronically to members.
“Providers and patients have raised concerns that MCO prior authorization processes have the potential to delay or limit access to care,” the KFF researchers said.
Before new federal requirements kick in next year, MCOs had 14 days to make standard determinations and 72 hours to make “expedited” rulings. Seventeen states had a seven-day limit in place as of mid-2024, and 13 said they have a response time of below 72 hours for expedited determinations.
The KFF researchers also noted that the push around electronic denial notifications is key to ensuring that enrollees have an opportunity to seek an appeal if they want to. Analyses from the Medicaid and CHIP Payment and Access Commission (MACPAC) have found that mailed denial letters frequently arrive late or never arrive at all.
But members have 60 calendar days from the decision date to file an appeal, so the later a notification arrives, the less time they have to respond.
“Delayed receipt of denial notices can leave enrollees without enough time to request an appeal,” the researchers wrote. “Offering an option to receive electronic notices may help enrollees receive denial notices faster and more reliably.”
In addition, the study found that 21 states reported that they use standard templates or language for denial notifications. MACPAC and the Office of Inspector General have both warned that denial notices may be difficult for members to understand, further introducing barriers to appeal, KFF said.
MCOs are required to provide support to members if they request it during the appeal process, but data from MACPAC also suggest enrollees do not necessarily trust them to help.
“External entities like ombudsperson offices can help enrollees navigate the appeals process,” KFF said.
Reforming prior authorization has been a major focus of policymakers and industry stakeholders alike. The Centers for Medicare & Medicaid Services finalized regulations overhauling prior auth requirements in January 2024, and, earlier this summer, payers both large and small signed on to a pledge to significantly ease the burden for providers.
And it’s a key concern for members, too. In July, KFF polled consumers about prior auth and found that 73% of people believe delays and denials by insurers are a major problem.