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GAO to CMS: ‘Continue Prior Authorization Efforts to Reduce Spending’

The U.S. Government Accounting Office (GAO) recently released a study of the Medicare prior authorization program, which is used by private health insurers. The program requires providers and suppliers to demonstrate compliance with coverage and payment rules before patients receive a given service or item. The goal is to reduce expenditures by catching unneeded utilization and improper payments.

The GAO found that the CMS prior authorization program, which began in 2012, led to significant savings. It estimated the costs that would have been incurred without the program and compared those to the real costs, finding a savings through March 2017 of $1.1 billion to $1.9 billion. Responding to the report, CMS officials agreed that there were cost savings from the program but said that other cost-saving measures could have contributed to the final expenditure reduction.

The prior authorization project is set to end in 2018. At press time, CMS had not made plans to extend the program, but a Health and Human Services Department response to the report said that CMS will take the GAO findings into account when deciding how to proceed.

Robert B. Vogel, MD, JD
Retinal Ophthalmologist at Piedmont Eye Center, Lynchburg VA;
Attorney, Overbey Hawkins & Wright, PLLS, Lynchburg, VA;
Adjunct Professor, Humanities and Bioethics, Liberty University School of Medicine, Lynchburg, VA.