New analysis further supports the need for stronger policies to streamline the administrative process.
More than two million prior authorization requests, accounting for six percent of the 35 million total requests, were denied by Medicare Advantage (MA) plans in 2021, according to a report by Kaiser Family Foundation (KFF).
While beneficiaries of traditional Medicare are rarely required to receive prior authorization, nearly all MA members were enrolled in a plan that required prior authorization for some services in 2022, the analysis found.
KFF looked at the data plans must send to CMS for each MA contract that includes the number of prior authorization determinations made during a year and whether the request was approved, and then examined the use of prior authorization in MA during 2021.
The findings reveal that MA plans made over 35 million prior authorization determinations for the year, which equates to 1.5 requests per enrollee on average. Of those, over two million were denied in full or in part, with adverse determinations making up the majority of the denied requests.
The denial rate varied among insurers, ranging from 3% for Anthem and Humana to 12% for CVS (Aetna) and Kaiser Permanente. Insurers that had more prior authorization requests were generally found to deny a lower share of those requests.
While just 11% of denied prior authorization requests were appealed, 82% of appeals resulted in the initial denial being either fully or partially overturned. Only Kaiser Permanente overturned less than half (30%) of appeals of the insurers analyzed.
Researchers stated that the "medical care that was ordered by a health care provider and ultimately deemed necessary was potentially delayed because of the additional step of appealing the initial prior authorization decision, which may have negative effects on beneficiaries' health."
CMS has recognized the problem and proposed a rule in December 2022 to streamline the administrative process by requiring MA plans to implement electronic prior authorization.
Building on that proposed rule, CMS released another proposal to strengthen prior authorization protections for patients, requiring: a granted prior authorization approval remain valid for an enrollee's entire course of treatment; MA plans to annually review utilization management policies; and coverage determinations to be reviewed by professionals with relevant expertise.
KFF's report concluded by highlighting the importance of observing prior authorization practices in MA plans.
Researchers stated: "As the number of Medicare beneficiaries enrolled in Medicare Advantage continues to grow, a better understanding of prior authorization and other processes and programs to contain spending and manage utilization will be important in evaluating the implications of these policies on utilization and quality, including variation across Medicare Advantage plans and compared to traditional Medicare."
Jay Asser is the contributing editor for strategy at HealthLeaders.
KEY TAKEAWAYS
Kaiser Family Foundation analyzed data of Medicare Advantage contracts that included the number of prior authorization determinations made during a year an whether the request was approved.
The report found that over two million of the 35 million prior authorization requests made to Medicare Advantage plans in 2021 were denied.
Only 11% of denied prior authorization requests were appealed, but when they were, 82% resulted in in the denial being either fully or partially overturned.