HR-8375-119
Sponsor introductory remarks on measure. (CR H3095)
Sponsored by John Joyce (R-PA)
What it does
This bill would amend the Social Security Act to impose new requirements on Medicare Advantage (MA) organizations regarding prior authorization, coverage criteria, and plan oversight. Starting January 1, 2028, MA plans would be required to respond to most prior authorization requests within 72 hours (24 hours for urgent cases), provide real-time automated approvals for routine, high-approval-rate services, and apply the same medical necessity standards used in traditional Medicare. The bill would also establish a compliance scoring program with financial penalties (up to 2% payment reductions) for plans that fail to meet these requirements, restrict retroactive claim denials for already-authorized services, and limit the use of third-party review entities that are paid based on denial rates.
Who benefits
Medicare Advantage enrollees (approximately 33 million people) who currently experience delays or denials in prior authorization decisions. Hospitals, physicians, and post-acute care providers (rehabilitation facilities, long-term care hospitals) who would receive faster payment and face fewer retroactive claim reversals. Smaller or independent medical practices that lack administrative staff to navigate lengthy authorization processes. Patients requiring hospital-to-post-acute care transfers, who would benefit from faster authorization. Researchers and oversight bodies who would gain access to more granular, downloadable prior authorization data. Traditional Medicare (fee-for-service) providers who compete with MA plans and may benefit from a more level regulatory playing field.
Who is hurt
Medicare Advantage insurance organizations, which would face increased administrative costs to build real-time authorization infrastructure, potential payment reductions under the compliance scoring program, and reduced flexibility to manage utilization. Third-party utilization review companies whose business models rely on post-payment audits or denial-based compensation arrangements would be directly restricted. Taxpayers and Medicare trust funds could face higher costs if reduced prior authorization leads to increased utilization of services. MA plan enrollees in plans that exit markets due to reduced profitability could face fewer plan choices. Smaller MA organizations with less technology infrastructure may face disproportionate compliance costs relative to large insurers.
Supporters argue
Supporters argue that prior authorization delays and denials in Medicare Advantage have caused measurable patient harm, citing a 2022 HHS Office of Inspector General report finding that 13% of prior authorization denials by MA plans were for services that met Medicare coverage rules and should have been approved. They contend that requiring MA plans to use the same medical necessity standards as traditional Medicare closes a loophole that allows plans to restrict coverage beyond what Congress intended when it created the program, and that financial penalties for noncompliance create accountability where voluntary compliance has repeatedly failed.
Opponents argue
Opponents argue that prior authorization, while imperfect, is a core utilization management tool that controls costs and prevents unnecessary procedures — and that eliminating or severely restricting it could increase Medicare Advantage spending, ultimately raising premiums or reducing benefits for enrollees. They contend that mandating real-time automated approvals and uniform medical necessity standards removes plan flexibility that is central to the MA program's design as a market-based alternative to fee-for-service Medicare, and that the compliance scoring system's payment reductions could destabilize plans serving rural or high-need populations where administrative capacity is already limited.
Constitutional context
Congress has broad authority to set conditions on Medicare Advantage payments under the Taxing and Spending Clause (Art. I, §8, cl. 1), and MA organizations participate voluntarily in a federal program, so spending clause coercion concerns that arose in NFIB v. Sebelius (2012) regarding state Medicaid expansion are less directly applicable here. However, post-Loper Bright (2024), the extensive rulemaking authority delegated to the Secretary of HHS throughout this bill — including defining compliance scoring methodology, real-time authorization lists, and network adequacy standards — will face independent judicial scrutiny rather than automatic deference, potentially making specific regulatory implementations vulnerable to challenge.
Checks and balances
The executive branch (HHS/CMS) gains significant new rulemaking and enforcement authority over MA organizations, including the power to set compliance scores and reduce payments; Congress retains oversight through the statutory framework, and MA organizations may seek administrative review of compliance scores and judicial review of regulations under the post-Loper Bright independent judgment standard.
Historical precedent
The Consolidated Appropriations Act of 2023 included prior authorization transparency requirements for MA plans, and CMS finalized a rule in 2024 (effective 2026) requiring MA plans to respond to prior authorization requests within 72 hours for standard requests and 24 hours for urgent requests — provisions this bill would codify and expand into statute.