Key Issues > Duplication & Cost Savings > GAO's Action Tracker > Prior Authorization in Medicare (2019-26)
health icon, source: PhotoDisc

Health: Prior Authorization in Medicare (2019-26)

The Centers for Medicare & Medicaid Services should take steps to continue prior authorization, a payment approach that could potentially save millions of dollars in unnecessary Medicare spending.

Action:

The Administrator of the Centers for Medicare & Medicaid Services (CMS) should take steps—based on results from evaluations—to continue prior authorization, for example, by resuming the paused demonstration, extending current demonstrations, or identifying new opportunities for expanding prior authorization to additional items and services with high unnecessary utilization and high improper payment rates.

Progress:

CMS has taken steps to evaluate and continue its prior authorization programs, as GAO recommended in April 2018. In June 2019, CMS issued a final report on the independent evaluation of the non-emergency hyperbaric oxygen therapy demonstration. While the agency does not plan to conduct additional demonstrations on this service, CMS officials reported in December 2019 that the agency may consider this service for the new prior authorization process for certain hospital outpatient department services, established in a 2019 final rule.

In April 2019, CMS issued a Federal Register notice that added 12 items—seven power wheelchairs and five pressure reducing support surfaces—to its required prior authorization list for the permanent program. CMS officials said in December 2019 that the agency was in the process of determining cost savings from this action and that additional items would be added to the list in early 2020.

CMS resumed the home health services demonstration with changes in one state in June 2019 and in another state in September 2019. The agency plans to extend the demonstration to three additional states in 2020. In September 2019, CMS extended the repetitive scheduled non-emergency ambulance service demonstration for 1 year, through November 2020.

GAO will continue to monitor issued agency guidance on the home health services demonstration and to evaluate additional steps CMS takes to evaluate and continue prior authorization in Medicare, such as determining cost savings from its actions and identifying new opportunities for prior authorization. Until CMS takes these steps, the agency may miss opportunities to reduce unnecessary utilization and improper payments.

Implementing Entity:

Centers for Medicare & Medicaid Services