CMS Pilots Medicare Pre-Authorization Requirements in Six States
Traditional Medicare, long exempt from prior authorization requirements common in private insurance and Medicare Advantage plans, is set to begin implementing such protocols. The Centers for Medicare and Medicaid Services (CMS) announced a six-year pilot program across six states—New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington—mandating pre-authorization for 17 medical services deemed prone to overuse. These services include treatments like skin substitutes, deep brain stimulation for Parkinson's disease, some erectile dysfunction therapies, and knee arthroscopy for osteoarthritis.
Medicare Advantage plans, which operate under private insurance companies but use Medicare funding, have historically required pre-authorizations and often deny care they consider medically unnecessary. This has led to restrictions on service access and challenges for patients wishing to switch back to traditional Medicare. Introducing pre-authorizations in traditional Medicare signals a policy shift aimed at cost control but raises concerns about added administrative burdens.
The pilot program is part of efforts to curtail fraudulent and unnecessary medical procedures, such as overly frequent use of expensive treatments like skin substitutes, which generated over $10 billion in Medicare payments in 2024. However, critics note that targeting procedures rather than addressing providers engaging in unethical billing practices may create obstacles for both patients and compliant healthcare providers.
CMS plans to integrate AI and machine learning technologies into the pre-authorization process, extending the administrative scope and potentially distancing clinical decision-making from direct physician oversight. Concurrently, CMS is collaborating with major Medicare Advantage insurers, including Aetna, Blue Cross Blue Shield, Cigna, Humana, Kaiser Permanente, and UnitedHealthcare, to streamline and reduce excessive pre-authorization denials.
This convergence between traditional Medicare and Medicare Advantage protocols may simplify insurers' marketing narratives while subtly diminishing differences between public and privatized Medicare models. The initiative reflects ongoing industry and governmental efforts to manage expenditures and standardize utilization review processes amid evolving healthcare policy landscapes.