Prior Authorization Denials in Medicare Advantage Plans Increasing

In 2022, more than 46 million prior authorization requests were submitted to Medicare Advantage insurers, according to a new analysis from KFF. This is an increase from 37 million in 2019, which KFF analysts said is the result of increased enrollment.

But more prior authorizations are being denied. In 2022, insurers fully or partially denied 3.4 million (7.4%) prior authorization requests. And the share of all prior authorization requests that were denied increased from 5.7% in 2019 to 7.4% in 2022.

In Medicare Advantage plans, 99% of enrollees are required to obtain prior authorization for some services such as inpatient hospital stays, skilled nursing facility stays, and chemotherapy and other high-cost medications, the KFF analysis finds. But in traditional Medicare, only a limited set of services is subjected to prior authorization.

KFF’s analysis uses data submitted by Medicare Advantage insurers to CMS to examine the number of prior authorization requests, denials, and appeals for 2019 through 2022, as well as differences across Medicare Advantage insurers in 2022.

The KFF analysis found that just under 10% of denials are appealed, which analysts suggests is a result of beneficiaries not knowing they can appeal. A KFF survey last year found that many people who experience denials, including those with Medicare, are confused by their coverage and don’t know how to file an appeal with their plan.

Of these denials that are appealed, 83.2% of them are overturned. “These requests represent medical care that was ordered by a health care provider and ultimately deemed necessary but was potentially delayed because of the additional step of appealing the initial prior authorization decision. Such delays may have negative effects on a person’s health,” KFF analysts wrote.

KFF also found that there is variation across the plans in terms of the number of prior authorizations requested, with Humana plans having the most requests per enrollee. Kaiser Permanente plans had the lowest number of requests per enrollee.

Of the plans assessed, KFF found that CVS/Aetna denied the highest share of prior authorization requests, denying 13% of requests. Cigna had one of the lowest number of requests per enrollee (0.9) and denial rates (5.8%) that were also below average. (See Table below)

The denial rate ranged from 4.2% of prior authorization requests for Anthem plans to 13.0% of prior authorization requests for CVS plans. The overall denial rate includes requests that were both fully and partially denied (adverse and partially favorable determinations, respectively).

Over the last year, CMS has issued three separate rules on prior authorizations. The first rule, effective June 2023, clarifies the criteria for establishing prior authorizations. The second rule, effective April 2024, focuses on electronic prior authorizations. The third rule, effective June 2024, requires Medicare Advantage plans to assess the impact of prior authorizations on certain patient populations.

KFF analysts point out that the data assessed, however, do not contain enough information to assess prior authorization by type of service or type of plan or reasons for denials. Other information is collected but not reported, KFF analysts wrote in April 2024 about the gaps that exist in assessing Medicare Advantage data.

In 2024, MedPAC estimates that the Medicare program will spend 22% more per Medicare Advantage enrollee ($83 billion) than for similar beneficiaries in traditional Medicare.

“Though recent CMS actions aim to increase transparency in Medicare Advantage, substantial data gaps remain that limit the ability of policymakers and researchers to conduct oversight and assess the program’s performance, and for Medicare beneficiaries to compare Medicare Advantage plans offered in their area,” KFF officials wrote in April.