Skip to main content
House of Delegates
Medical Student Section
Resident and Fellow Section
CME Requirements for Relicensure
Controlled Substance Prescribing
For CME Providers
About the FMA PAC
Make a Donation
The 1000+ Club
Join The 1000+ Club
Mission / Vision
The Foundation for Healthy Floridians
Councils and Committees
House of Delegates
2023 Board of Governors
Join / Renew
The state of prior authorization, by the numbers
Prior Authorization Denials in Medicare Advantage: What the Numbers Reveal
By Jarrod Fowler, MHA, FMA Director of Healthcare Policy and Innovation | Feb. 16, 2023
According to a
from the Kaiser Family Foundation, more than 35 million prior authorization requests were submitted to Medicare Advantage (MA) plans in 2021. Additionally, prior authorization requests are substantially more common at some MA organizations than others.
There is also significant variation in the rate at which MA plans deny prior authorization requests.
As the report notes, looking at these two numbers together produces as an interesting observation: “The inverse relationship between the volume of prior authorization requests and share of requests that were denied means that there is substantially less variation in the number of denials per enrollee than in the number of requests per enrollee across Medicare Advantage insurers. For example, Humana processed more than three times the number of prior authorization requests per enrollee (2.8) than UnitedHealthcare (0.8), but Humana’s denial rate was one-third of UnitedHealthcare’s denial rate (3% vs. 9%). Thus, the two insurers denied approximately the same number of requests per enrollee (0.07).”
In addition, the report notes that just over 11% of all prior authorization requests were appealed, and there was substantial variation in the rate at which these appeals were overturned across plans.
The need to address prior authorization
According to the latest prior authorization
from the AMA, 93% of physicians report care delays as a result of prior authorization. Additionally, 82% of physicians report that prior authorization can lead to treatment abandonment. Among other findings, 24% of physicians reported that prior authorization has led to a patient being hospitalized, and 51% of physicians reported that prior authorization has interfered with a patient’s ability to perform their job responsibilities.
88% of physicians describe the prior authorization burden as high or extremely high, and 40% of physicians have staff who work exclusively on prior authorizations. Physicians complete an average of 41 prior authorizations per week.
What else is being done about prior authorization?
As the FMA has reported, the Centers for Medicare & Medicaid Services recently proposed
that are designed to shed more light on how prior authorization is used across Medicaid, CHIP, Medicare Advantage and Marketplace plans. Providing more insight into how these plans use prior authorization will help inform the public of the burden this process creates for patients and physicians alike.
Last year, the U.S. Department of Health and Human Services Office of Inspector General (OIG)
released a report
finding that Medicare Advantage plans often inappropriately delayed or denied care. According to the report, among the prior authorization requests that Medicare Advantage plans denied, 13% actually met Medicare coverage rules. In other words, these services would have been approved for beneficiaries enrolled in traditional Medicare.
As the OIG reported, “Medicare Advantage Organizations denied prior authorization requests for services that were medically necessary by applying clinical criteria that are not contained in Medicare coverage rules,” and, further, “Medicare Advantage organizations indicated that some prior authorization requests did not have enough documentation to support approval, yet our reviewers found that the beneficiary medical records already in the case file were sufficient to support the medical necessity of the services.” Supposing Medicare Advantage plans regularly deny valid prior authorizations at the frequency found in this study, this indicates that 84,812 prior authorizations were inappropriately denied in 2019 alone.
Among payments that were denied by Medicare Advantage, 18% met traditional Medicare’s coverage and billing rules. As the OIG put it, “Eighteen percent of payment denials were for claims that met Medicare coverage rules and Medicare Advantage billing rules, which delayed or prevented payments for services that providers had already delivered.” Assuming Medicare Advantage plans regularly denied medically necessary services at the same frequency found in this study, that would indicate that 1.5 million payment requests were inappropriately denied in 2019. Clearly, more needs to be done to address prior authorization. The government’s recent action is a small, first step in the right direction, and the FMA is working tirelessly to address this issue on your behalf.