There were 35.2 million prior authorization requests submitted to Medicare Advantage plans for healthcare services in 2021, and 2 million of those were denied, an analysis published Thursday shows.
Prior authorization has been touted as a way to reduce healthcare costs, although many providers say it delays care. To conduct the study, the Kaiser Family Foundation examined data from 515 MA contracts in 2021, representing 23 million MA enrollees (which is 87% of total MA enrollment).
The 35.2 million prior authorization requests equates to about 1.5 requests per enrollee, on average. The report found that the number of prior authorization requests vastly varies by insurer. Kaiser Permanente has the lowest amount, with 0.3 requests per enrollee in 2021. Comparatively, Anthem had the highest, with 2.9 requests per enrollee.
About 33.2 million of the 35.2 million prior authorization requests were covered in full. Of the 2 million rejected, 1.6 million were adverse determinations, meaning the request was completely denied. The remaining were only partially covered.
There was also variation in denials among insurers. CVS and Kaiser Permanente both had a denial rate of 12%, while Anthem and Humana both had a denial rate of 3%. The insurers with the most prior authorization requests rejected a lower share of those requests, except for Centene, the report found. Centene had 2.6 prior authorization requests per enrollee, but a 10% denial rate.
Of the requests that were denied, only 11% were appealed. CVS had the highest share of denials that were appealed (20%), compared to Kaiser Permanente with 1%. However, 82% of the overall appeals led to the initial denial being overturned fully or partially. Most of the insurers had a majority of their denials overturned after they were appealed, except for Kaiser Permanente, which only had 30% overturned.
“The high frequency of favorable outcomes upon appeal raises questions about whether a larger share of initial determinations should have been approved,” KFF said in the report. “Alternatively, it could reflect initial requests that failed to provide necessary documentation. In either case, 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.”
The variety amongst insurers shows the need for an improved understanding of prior authorization, KFF added.
“This analysis suggests that Medicare Advantage insurers vary in their use of prior authorization,” the researchers stated. “Despite this variation, little is known about the implications for enrollees, including delays in treatment or differences in the criteria used in making coverage decisions. 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.”
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