Health Plan Accountability Update - June 2025

TOP NEWS

HHS announces initiative with insurers to streamline prior authorizations

The Department of Health and Human Services June 23 announced an initiative coordinated with multiple health insurance companies to streamline prior authorization processes for patients covered by Medicare Advantage, Medicaid managed care plans, Health Insurance Marketplace plans and commercial plans. Under the initiative, electronic prior authorization requests would become standardized by 2027. HHS stated that these reforms complement ongoing regulatory efforts by the Centers for Medicare & Medicaid Services to improve prior authorization, including building upon the Interoperability and Prior Authorization final rule.

The plan is expected to make the prior authorization process faster, more efficient and more transparent, the agency said. Participating insurers pledged to expand real-time responses by 2027. HHS said that the insurers would also commit to reducing the volume of medical services subject to prior authorization by 2026, including those for common procedures such as colonoscopies and cataract surgeries.

During a news conference, HHS Secretary Robert F. Kennedy Jr. said unlike previous attempts by insurers, this initiative would succeed because the number of insurers participating represent 257 million Americans. “The other difference is we have standards this time,” he said. “We have ... deliverables. We have specificity on those deliverables, we have metrics, and we have deadlines, and we have oversight.”

Mehmet Oz, M.D., CMS administrator, said that the pledge “is an opportunity for industry to show itself.” Sen. Marshall, R-Kan., said that Congress could pursue codifying at least some portions of the initiative in the future.

Additionally, participating insurers would honor existing prior authorizations during coverage transitions. 

Report: Hospitals and health systems squeezed by persistent economic challenges

The AHA April 30 released a report highlighting how hospitals and health systems continue to experience significant financial headwinds that can challenge their ability to provide care to their patients and communities. The report outlines the financial burden of heightened expenses hospitals have faced in recent years in caring for patients, as well as the increasing strain on the field.  
 
It explains how hospitals have raised wages to recruit and retain staff amid workforce shortages and how Medicare and Medicaid continue to underpay hospitals for patient care as shortfalls worsen. Other findings include how practices of certain Medicare Advantage plans exacerbate hospitals’ financial burden, and that tariffs on medical imports could significantly raise costs for hospitals as nearly 70% of medical devices marketed in the U.S. are manufactured exclusively overseas. 

“This report should serve as an alarm bell that a perfect storm of rising costs, inadequate reimbursement, and certain corporate insurer practices are jeopardizing the ability of hospitals to deliver high-quality, timely care to their communities,” said AHA President and CEO Rick Pollack. “With so much at stake, policymakers must recommit to making preserving access to hospital care a national priority.” 

CMS releases final rule on Marketplace Integrity and Affordability 

The Centers for Medicare & Medicaid Services June 20 announced it finalized its 2025 Marketplace Integrity and Affordability final rule. The rule shortens the open enrollment period for the federal marketplace to Nov. 1-Dec. 15 starting in 2027, and limits open enrollment periods for state-based marketplaces to Nov. 1-Dec. 31. The rule also includes a change to the premium adjustment percentage that would increase the maximum annual cost sharing limitation. Additionally, the rule makes updates to the income verification process and pre-enrollment verification process for special enrollment periods, changes to the essential health benefits, modifications to the redetermination and re-enrollment processes, and ends a SEP for low-income individuals, among other policies. Many of the provisions reinstate policies finalized during the prior Trump administration.

The AHA April 11 expressed concerns to CMS after the rule was proposed. CMS had estimated that 750,000 to 2 million consumers could lose their coverage due to the provisions. The AHA encouraged CMS to pause finalizing many of the proposals to give it and stakeholders additional time to consider the impacts while also taking action to stop brokers responsible for inappropriate enrollments. 

CMS requests comments on MA service level data collection for initial determinations, appeals  

The Centers for Medicare & Medicaid Services May 30 released a notice requesting comments on a proposed Medicare Advantage service level data collection for initial determinations and appeals. The granular data will be used to enhance audit activities to ensure MA plans are operating in accordance with CMS guidelines and ensure appropriate access to covered services and benefits. CMS plans to use the information to hold MA plans accountable for their performance. Comments are due to the Office of Management and Budget by June 30. 

CMS notifies states it will not approve or match funds for designated state health, investment programs  

The Centers for Medicare & Medicaid Services April 10 announced that it does not intend to approve new or extend existing requests for federal funds to match state expenditures on designated state health and designated state investment programs. CMS said its aim is to end Medicaid spending that is duplicative of other federal funding sources or is not directly tied to health care services.   

Analysis finds Marketplace enrollment more than doubled since 2020 

A KFF analysis published April 3 found that Health Insurance Marketplace enrollment reached a record high for a fourth consecutive year and has more than doubled since 2020. Marketplace enrollment totaled 24.3 million for 2025, growing by 12.9 million since 2020, a 113% increase. KFF attributed the growth to the enhanced premium tax credits instituted in 2021 that expire at the end of this year. Nearly all states experienced enrollment growth since 2020, and 20 have doubled their enrollment since then.   

AHA brief urges court to oppose motion by MultiPlan to end antitrust case 

The AHA March 10 filed a friend-of-the-court brief in the U.S. District Court for the Northern District of Illinois, urging the court to oppose a motion by data analytics firm MultiPlan to dismiss claims that the company conspired with insurers to reduce out-of-network reimbursements for hospitals and health systems.   

“[I]t is imperative that courts hold commercial insurers to the same standards as everyone else,” AHA wrote. “If, as Plaintiffs allege, MultiPlan has facilitated collusion among commercial insurers throughout the country, this Court’s intervention will help preserve the viability of many struggling hospitals that cannot survive without competitive reimbursements.”  

MEDICARE ADVANTAGE NEWS 

NORC, Coalition report finds MA patients face longer hospital stays, reduced follow-up care access 

A report released June 17 by NORC at the University of Chicago, commissioned by the Coalition to Strengthen America’s Healthcare, found that patients enrolled in Medicare Advantage plans are more likely to experience longer hospital stays and experience delays in transfer to post-acute care facilities than those on Traditional Medicare. The report found that MA patients had 40% longer hospital stays, on average, than those with Traditional Medicare.

The study, which analyzed data from 2018 to 2022, highlights growing concerns about how MA plans may be limiting access to medically necessary post-acute care services through the use of prior authorization.

The AHA is a founding member of the Coalition. 

GAO says CMS should target behavioral health services in prior authorization audits 

The Government Accountability Office May 29 released a report recommending the Centers for Medicare & Medicaid Services target behavioral health services when auditing Medicare Advantage plans’ use of prior authorization. CMS said it currently does not target behavioral health services because they make up a small percentage of MA services, the report said.     

The report describes selected MA organizations’ prior authorization requirements and use of internal coverage criteria for prior authorization decisions on behavioral health services. It also examines CMS’ oversight of the use of internal coverage criteria, among other issues. GAO said that CMS “would take the recommendation under advisement in the future.” 

CMS to expand audits of MA plans 

The Centers for Medicare & Medicaid Services May 21 announced it will immediately begin annual audits of all Medicare Advantage plans and work to clear a backlog of audits from 2018 through 2024. The audits focus on risk adjustment data validation to confirm to CMS that diagnoses submitted by Medicare Advantage plans for determining risk adjustment payments are supported by medical records. CMS expects to complete the backlog by early 2026. The agency said it will use new technology and increase its team of medical coders from 40 to approximately 2,000 to assist with efforts.

CMS leaders share insights on deregulation, MA oversight at AHA Annual Meeting  

Leaders from the Centers for Medicare & Medicaid Services at the 2025 AHA Annual Membership Meeting May 5 discussed issues on the agency’s agenda in a fireside chat moderated by Ashley Thompson, AHA senior vice president, public policy analysis and development. Stephanie Carlton, CMS deputy administrator and chief of staff, and John Brooks, CMS deputy administrator and chief policy and regulatory officer, discussed regulatory burden and oversight of commercial health insurance plans, among other topics. Read coverage of the discussion here.  

CMS finalizes CY 2026 Medicare Advantage, Part D rates 

The Centers for Medicare & Medicaid Services April 7 released finalized payment rates for calendar year 2026 Medicare Advantage and Part D plans. Payments to MA plans are projected to result in an increase of 5.06%, or more than $25 billion. This is an increase of 2.83% since the CY 2026 Advance Notice, which CMS attributes to an increase in the effective growth rate.

CMS releases final rule for 2026 Medicare Advantage, prescription drug plans 

The Centers for Medicare & Medicaid Services April 4 finalized changes to the Medicare Advantage and prescription drug programs for contract year 2026. The rule finalizes proposed clarifications requiring MA and Part D plans to honor medical necessity decisions rendered as part of a prior authorization process, closes loopholes in MA appeals processes by explicitly defining organizational determinations eligible for appeal, and codifies requirements designed to improve enrollee experience when interacting with dual eligible special needs plans. The administration deferred finalizing several proposals until further rulemaking can occur, including provisions on plan use of proprietary/internal coverage criteria, additional plan directory requirements and behavioral health cost-sharing.

Additionally, the rule finalizes proposals regarding vaccine and insulin cost-sharing for Part D plans and requires all Part D plans to require network pharmacies to be enrolled in the Medicare Drug Price Negotiation Program’s Medicare Transaction Facilitator Data Module. 

LEGISLATION AND LEGISLATIVE ACTIVITY

AHA discusses how Congress can improve support for post-acute care 

The AHA March 11 shared ways Congress could better support patient access to post-acute care in comments for a hearing held by the House Committee on Ways and Means Subcommittee on Health. The AHA urged Congress to rein in harmful practices by Medicare Advantage plans, repeal the minimum staffing rule and support investments in workforce development, among other actions.   

The association also highlighted the crucial role that each post-acute sector plays across the continuum of care and urged Congress to take steps to address some of the unique regulatory and policy challenges they face. 

STATEMENTS, LETTERS AND ADVISORIES

Member Advisory: Updated Medicare Advantage Question and Complaint Process for Provider Organizations

Regulatory Advisory: CMS Issues Rate Announcement and Final Rule for CY 2026 Medicare Advantage, Prescription Drug Plans

Statement: The AHA on House Reconciliation Legislation

Letter: AHA Senate Letter Supporting Improving Seniors’ Timely Access to Care Act

Letter:  AHA House Letter Supporting Improving Seniors’ Timely Access to Care Act

Statement: AHA Statement on Senate Finance Committee Bill

WORTH A LOOK

Want to reduce ‘waste and fraud?’ Reform Medicare Advantage. The Washington Post, April 2, 2025

Medicare Advantage Denies 17 Percent Of Initial Claims; Most Denials Are Reversed, But Provider Payouts Dip 7 Percent. Health Affairs, June 2, 2025

UnitedHealthcare nixes many Medicare Advantage commissions, Modern Healthcare, June 2025

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