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Prior Authorization Data and Proposed Rule Reflect Need for Stronger Medicare Advantage Rules

This week, the Kaiser Family Foundation (KFF) released an analysis of Medicare Advantage (MA) data showing that providers submitted over 35 million prior authorization requests in 2021, which averages out to 1.5 requests per enrollee. Over 2 million of those requests were denied. These numbers reflect the burden that prior authorization and similar processes have on MA enrollees and on the health care system.

The KFF analysis shows that the rate of prior authorization requests varies across MA plans, as does the denial rate. For example, Anthem plans saw 2.9 prior authorization requests per enrollee with 3% denial rates, while Kaiser Permanente plans saw fewer prior authorization requests at 0.3 per enrollee but higher denial rates of 12%. KFF states, “In general, insurers that had more prior authorization requests, denied a lower share of those requests. The exception is Centene, which had both a relatively high number of prior authorization determinations (2.6 per enrollee) and one of the highest denial rates (10%).”

Importantly, only 11% of denied prior authorization requests were appealed. Of those that were, more than 80% were overturned.

Because there are so few appeals in relation to the overall number of denials, it is impossible to know how many of the denials were erroneous. But low appeal rates suggest many abandon the process altogether, along with the care they need. Even successful appeals take time, and for years, Medicare Rights has heard from beneficiaries about the harmful care delays and resulting negative health outcomes caused by prior authorization.

Such processes also create burdens for providers. In 2021, an American Medical Association (AMA) survey showed that 84% of physicians reported an increase in the number of prior authorizations in the previous five years. Over 60% reported that it was “difficult to determine whether a prescription medication or medical service” requires prior authorization. And 88% reported that prior authorization interfered with continuity of care.

MA plans are required to have coverage rules that are “no more restrictive than original Medicare.” But in April of 2022, a Health and Human Services Office of the Inspector General (OIG) report found that MA plans were denying or delaying medically necessary care that Original Medicare would have covered—in clear violation of this basic responsibility.

Responding to the OIG report as well as information like the AMA survey, the Centers for Medicare & Medicaid Services (CMS) has proposed new rules for MA coverage that would prohibit some forms of prior authorization and would clarify that MA plans must cover basic benefits to the extent they are covered in Original Medicare.

The proposed rule also contains important changes to marketing rules that would better protect beneficiaries from misinformation and strong-arm sales tactics.

Medicare Rights supports efforts to reform prior authorization to reduce the burden the practice has on people with Medicare. Our forthcoming comments on CMS’s proposed rule will reflect both our support for these proposals and the need for CMS to enforce them strictly to ensure that people who need care are able to get it without unnecessary delay and stress.

We also continue to urge CMS to simplify the MA appeals process, so enrollees who must use it can do so more easily.

Read the KFF report.

Read the OIG report.

Read a fact sheet on the proposed rule.

Policy Issues: Medicare Advantage
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