Prior authorization is used by most Medicare Advantage plans to prevent waste and as a safeguard to prevent patients from receiving medically unnecessary treatment. In 2021, 90% of Medicare Advantage enrollees were in plans requiring authorization for procedures and lab tests. Original Medicare and Medicare Supplements do not have prior authorization requirements.
In previous blogs (here and here), we wrote about how Medicare Advantage plans have been accused of using their prior authorization provision to deny coverage for needed healthcare. A new report from the Kaiser Family Foundation (KFF) investigates the allegations.
The report was based on requests for medical care submitted to Medicare Advantage plan carriers in 2021. Out of 35 million prior authorization requests that were submitted, 2 million requests were either denied or partially denied, which equates to a 6% denial rate. Out of that group, only 212,000 (about 10%) were appealed. The result of those appeals was for 173,000 to be partially or fully approved. That means there was an 81.6% success rate on appeals.
Final tally: of the 35 million requests for prior authorization, the final rejection number for those who were denied both initially and on appeal was only 1.1%.
212,000 - 173,000 = 39,000 rejected twice
39,000 rejected twice/35,000,000 P.A. requests = 1.1%
The above numbers may be a little misleading because the sample size is small for the appeals, but the point is that it doesn’t hurt to appeal if you feel that you have a case. Delays or denials of prior authorizations can complicate and delay necessary medical procedures. The Centers for Medicare & Medicaid Services (CMS) is working to address concerns and streamline the process by (1) processing more requests electronically instead of by phone or fax, and (2) be requiring more transparency about the criteria used for making decisions.
I’ve recently heard (on two separate occassions) from my policyholders who were told that their insurance hadn’t approved their procedure. When they called their insurance company, they learned that the provider hadn’t yet submitted the claim for approval!
Bottom line: Medicare Advantage plans are popular because they provide great value, but until improvements to the system are implemented, it’s important for you and your doctor to work together to advocate for your needs. If you get denied on a prior authorization request, don’t be afraid to appeal.