Health Law Alert by Lamb McErlane attorneys Vasilios J. Kalogredis, Esq. and Sonal Parekh, Esq.

On January 17, 2024, the Centers of Medicare & Medicaid Services (“CMS”) released a final rule requiring health insurers participating in federal programs, including Medicare Advantage and Medicaid, to respond to expedited prior authorization requests within 72 hours and other requests within 7 days. Additionally, insurers must (1) include their reasons for denying a prior authorization request, (2) publicly release data on denial and approval rates for medical treatment, and (3) give patients more information about their decisions to deny care.

The rule stems from an ongoing criticism of the time-consuming prior authorization procedures by insurers which physicians and patients say unfairly delay or deny the medical treatment that is needed. Thus far, 30 states have introduced their own bills to address the problem.

With the implementation of the final rule, there is also hope that alleged problems regarding insurers’ increased used of artificial intelligence and algorithms to deny claims without human review will be addressed.[1] Physicians believe this final rule will improve patient care and decrease administrative burdens on physicians.

Insurers must implement certain operational provisions by January 1, 2026, and have compliance dates, generally beginning January 1, 2027 to meet development and enhancement requirements, varying by the type of payer.

[1] See proposed class action filed November 14, 2023 accusing UnitedHealth Group Inc. of using AI algorithms to systematically deny elderly patients’ claims for extended care such as nursing facility stays. COMPLAINT in the U.S.  District Court Minnesota. The Estate of Gene B. Lokken and The Estate of Dale Henry Tetzloff v. UnitedHealth Group, Inc. et al., No. 0:23-cv-03514.

If you have any questions regarding prior authorizations and compliance with the final rule, please feel free to contact Bill Kalogredis, Esq. or Sonal Parekh, Esq.

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Vasilios J. (Bill) Kalogredis, Esq. has been advising physicians, dentists, and other healthcare professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. He is Chairman of Lamb McErlane PC’s Health Law Department. Bill can be reached by email at bkalogredis@lambmcerlane.com or by phone at 610-701-4402.

Sonal Parekh, Esq., is an associate at Lamb McErlane PC who focuses on healthcare transactional matters and a broad range of healthcare regulatory-related issues on behalf of healthcare systems, physicians, dentists, and other healthcare providers, and is a pharmacist by education and training. Sonal can be reached by email at sparekh@lambmcerlane.com or by phone at 610-701-4416.

*This alert is for educational purposes only and is not intended to be legal advice. Should you require legal advice on this topic or have any questions or concerns, please contact Vasilios J. (Bill) Kalogredis, Esq. or Sonal Parekh, Esq.