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The Biden administration on Wednesday finalized a rule aimed at strengthening oversight of privately run Medicare plans, banning misleading ads and easing paperwork authorization requirements.
The rule from the Department of Health and Human Services targets private insurers that offer the so-called Medicare Advantage plans, which cover some 30 million seniors and people with disabilities, about half of all people who get the government health insurance.
The final rule goes into effect on June 5, 2023, and applies to coverage beginning Jan. 1, 2024.
Under the rule, private health insurers operating the private Medicare plans can’t run advertisements that use the Medicare name or mention the federal government deceptively. Nor can ads run without mentioning a specific plan name.
Among the kinds of advertisements the rule aims to eliminate are those that lawmakers and doctors have said appear to be official communications from federal government agencies.
The Senate Finance Committee last year urged the administration to crack down on marketing of the plans that lawmakers said were deceptive and misleading. The American Hospital Administration also pressed HHS for changes.
In addition, the administration’s rule seeks to address criticism from lawmakers and doctors that some Medicare Advantage plans were improperly rejecting valid medical services.
The rule stipulates that health insurers can only issue a denial if a healthcare professional with relevant expertise has reviewed the request. It also says an authorized service must stay valid for as long as is medically necessary to prevent disruptions to patients’ care.
“It’s important we don’t let bureaucracy in health industries plans make it impossible or difficult for seniors and Americans with disabilities to get the care that they need,” said HHS Secretary
Xavier Becerra.
The prior-authorization requirement comes after pressure from Congress and HHS. Commercial health insurers have been taking steps of their own to scale back use of the process, a tool for insurers to prevent unnecessary services but also a source of frustration among doctors and patients.
Last month, UnitedHealth Group Inc.’s UnitedHealthcare, the largest health insurer in the U.S., said it would cut its use of prior authorization.
also said it was reducing prior authorization, removing the requirement for about 500 services since 2020.
Regulators said the new rule would ensure that enrollees in Medicare Advantage plan get the same access to medically necessary care that they would receive in traditional Medicare.
The rule would also strengthen requirements on insurers for network adequacy for behavioral health services, including clarifying that emergency behavioral health treatment can’t be subject to prior authorization.
—Anna Wilde Mathews contributed to this article.
Write to Stephanie Armour at Stephanie.Armour@wsj.com
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