Lawmakers question UnitedHealth and others on improper use of Prior Authorization

An investigation by federal lawmakers is targeting the largest Medicaid managed care organizations (MCOs) over their high rates of prior authorization denials. The investigation follows a report by the HHS Office of Inspector General (OIG) that found that the seven largest Medicaid MCO parent companies deny about 12% of prior authorization requests, with some MCOs having denial rates above 25%.

Investigation details

On Sept. 28, Sen. Ron Wyden and Rep. Frank Pallone, the chairs of the Senate Finance Committee and the House Energy and Commerce Committee, respectively, sent letters to the seven MCOs, asking them to provide data on their appeals and denials, as well as any use of artificial intelligence (AI) algorithms in the prior authorization process.

The lawmakers said they are concerned that the MCOs may be using prior authorization to deny care, rather than manage care. They said that this is a system-wide problem that needs attention.

The seven MCOs that received the letters are Aetna, AmeriHealth Caritas, CareSource, Centene, Elevance Health, Molina Healthcare and UnitedHealthcare.

The investigation may have implications for physicians and patients who are enrolled in or work with Medicaid MCOs. Physicians may face lower reimbursement rates, higher administrative burdens, and reduced patient volume. Patients may face higher out-of-pocket costs, reduced access to care, and disruption in continuity of care. They may also have to switch to other MCOs or traditional Medicaid to retain in-network benefits.