Gaps in Medicare Advantage Data Limit Transparency in Plan Performance for Policymakers and Beneficiaries
Enrollment in Medicare Advantage, the private plan alternative to traditional Medicare, has increased steadily since 2010, and is poised to become the dominant form of Medicare coverage. Despite this shift in how Medicare beneficiaries receive their Medicare benefits, and the associated change in the distribution of federal spending, substantial data gaps limit the ability of policymakers and researchers to conduct oversight and assess the program’s performance, including evaluating the value provided and implications for equity. Additionally, the gaps in data prevent policymakers and other stakeholders from understanding how options to address the fiscal pressures facing the Medicare program, including extending the solvency of the Part A Hospital Insurance Trust, could impact beneficiaries.
In this brief we identify specific gaps in Medicare Advantage data and discuss the implications for program oversight and beneficiary decision making. We provide illustrative questions that cannot be answered because of the lack of data. In some instances, the information is not available because it is not collected by the Centers for Medicare and Medicaid Services (CMS). In other instances, the information is collected by CMS but not released to the public (Table 1). In general, the data gaps described below apply to all types of Medicare Advantage plans, including those available for individual enrollment, special needs plans (SNPs), and group plans sponsored by employers and unions.
Data not Reported to CMS
Medicare Advantage insurers do not report data on use and spending of supplemental benefits, such as dental, vision, and hearing, overall or by enrollee characteristics.
The vast majority of Medicare Advantage enrollees are in plans that offer some coverage of dental, vision and hearing services, as well as other supplemental benefits that are not otherwise covered under traditional Medicare. While our prior work documented substantial variation in the scope and generosity of supplemental benefits offered, no information is available to describe how many enrollees actually use these benefits, the specific items or services they receive, or associated out-of-pocket spending. Further, there is no information available to assess whether use and spending varies across subgroups of beneficiaries.
In recent years, per enrollee Medicare payments to Medicare Advantage insurers that pay for these benefits have increased rapidly, raising questions about how these dollars are being used. In the last five years, these payments, also referred to as rebates, have more than doubled, rising from $1,140 per enrollee in 2018 to $2,350 per enrollee in 2023. In total, that is over $70 billion in one year alone. CMS recently reinstated detailed medical loss ratio reporting requirements and will also require spending data for specific categories of supplemental benefits to be reported, beginning with the 2023 plan year. This additional information will be useful in assessing the value of supplemental benefits offered by Medicare Advantage plans, but gaps will still remain.
Without descriptive information about use and enrollee out-of-pocket spending on supplemental benefits, it is not possible to assess the extent to which these benefits are being used by Medicare Advantage enrollees, and whether use of supplemental benefits varies by beneficiary characteristics (e.g., race/ethnicity or health status), plan type (e.g., SNPs, group plans or individually sold plans), or region. It is also not possible to assess whether use of these benefits has a positive effect on health outcomes and affordability. Basic descriptive data could also be used to assess whether supplemental benefits are helping to address health disparities by filling specific social or medical needs, such as transportation, and whether the benefits are being targeted to those with the greatest needs.
Questions about Supplemental Benefits that cannot be answered Because Data Are Not reported
- What share of Medicare Advantage enrollees use supplemental benefits offered by their plan?
- What level of supplemental benefits do Medicare Advantage enrollees use? For example, among enrollees in Medicare Advantage plans with an annual dollar limit on dental coverage, what share use the full amount available?
- How does the use of supplemental benefits vary by enrollee characteristics (e.g., age, race/ethnicity, income, residence in underserved areas)?
- Does use of supplemental benefits vary by Medicare Advantage insurer?
- How much do Medicare Advantage enrollees spend out-of-pocket on cost sharing for supplemental benefits when covered by their plan?
- Does the availability of supplemental benefits in Medicare Advantage help mitigate health disparities?
- Do supplemental benefits, such as coverage of dental services, lead to fewer adverse events and better health outcomes?
- Do enrollees in SNPs or group plans use supplemental benefits more or less extensively than enrollees in Medicare Advantage plans available for individual purchase?
Medicare Advantage insurers do not report prior authorization requests, denials, and appeals by type of service, enrollee characteristics, or for specific plans within a contract.
Health insurers use prior authorization to both contain spending and prevent enrollees from receiving unnecessary or low-value services. Virtually all Medicare Advantage enrollees are in a plan that requires prior authorization for some services. Generally, higher cost services, such as Part B drugs (e.g., chemotherapy) and inpatient hospital stays, are more likely than lower cost services to be subject to prior authorization. Even supplemental benefits, such as hearing tests and transportation, are often subject to prior authorization requirements.
A prior KFF analysis found that over 35 million prior authorization requests were submitted to Medicare Advantage insurers in 2021, with over 2 million of those requests fully or partially denied. Just 11% of denials were appealed, though 82% of those appeals were at least in part successful.
Publicly available data from CMS includes the aggregate number of prior authorization and payment requests, including whether the request was approved or denied (in full or in part). The data also include information about the number of denied claims that were appealed and the outcome of that process.
However, there are no data to document the number of prior authorization requests, denials, and appeals by type of service. It is therefore not possible to assess whether prior authorization requests for certain types of services are denied more often by some plans than others, or whether prior authorization requests tend to be denied more for some types of services than others.
The lack of data about the services for which prior authorization is requested and the decisions made by plans also make it difficult to assess whether Medicare Advantage insurers are complying with CMS requirements to cover all Medicare Part A and Part B services. The Health and Human Services Office of the Inspector General (OIG) requested detailed information for a sample of denials from Medicare Advantage insurers, and found that the insurers may be using prior authorization to deny requests for services covered under traditional Medicare. While CMS recently clarified this requirement through rulemaking, without plan-level data, by type of service, it will not be possible to determine whether plans are complying.
In addition, plans are not required to report prior authorization data by demographic characteristics of Medicare Advantage enrollees, such as race/ethnicity, sex, age, or diagnosed health conditions. Without such data, it is not possible to assess whether prior authorization requirements have a disproportionate impact on certain subpopulations of enrollees, which could affect access to care, out-of-pocket costs, and health outcomes.
Further, plans do not report the extent to which providers in their network may be exempt from prior authorization requirements, for example as part of “gold-carding” programs that waive requirements for providers with a history of complying with the insurer’s prior authorization policies. Medicare beneficiaries might find it helpful to consider how broadly prior authorization requirements apply across providers when choosing among plans.
Additionally, the aggregate-level data reported by Medicare Advantage insurers to CMS and made available in a public use file are only available at the contract, rather than plan level. Contracts can include multiple types of Medicare Advantage plans, sometimes combining those available for individual purchase with SNPs and employer sponsored plans, and most contracts include at least three plans. By aggregating data in this way, it is not possible to assess variations in prior authorization practices across plans within a contract, including across plans that serve different populations. For example, if CMS required Medicare Advantage insurers to report prior authorization requests and denials at the plan level, beneficiaries could compare across the plan options of the same type (e.g., plans available for individual purchase) in their county.
questions about the impact of Prior Authorization decisions that CANNOT be answered because data are not reported
- For what services are prior authorization requests made most often?
- What services have the highest prior authorization denial rates?
- Are people with certain health conditions subject to more prior authorization requirements and how do denials vary by diagnoses?
- How do prior authorization request denials vary by demographic characteristics of Medicare Advantage enrollees?
- Which insurers receive the most prior authorization requests and how do denials and appeals vary across insurers and plans?
- What share of providers are exempt from prior authorization requirements, what services do they provide, and what are the characteristics of their patients?
- Are some groups of Medicare Advantage enrollees more likely to appeal prior authorization denials than others?
Medicare Advantage insurers do not report the reasons for prior authorization denials.
While Medicare Advantage insurers are required to provide enrollees with an explanation when denying a prior authorization request, CMS does not collect this information. Requests may be denied because a provider did not submit the necessary documentation, because the plan has determined the service is not medically necessary, or because the plan imposes other requirements for coverage (such as trying a more basic service first). This information would be helpful in understanding the potential effect of proposals to improve the prior authorization process. For example, if most denials of prior authorization requests are because the service was not deemed medically necessary, efforts to increase transparency of the coverage criteria, such as those recently included in a final rule published by CMS, may be more likely to have an impact.
questions about the reasons for prior authorization denials that cannot be answered because data are not reported
- What share of prior authorization denials are attributed to medical necessity compared to other reasons, such as insufficient documentation or requiring a more basic service first?
- What types of services are more likely to have prior authorization requests denied due to medical necessity?
- Do certain insurers attribute denials of prior authorization requests to medical necessity more often than others?
- Are Black Medicare Advantage enrollees more likely to have a prior authorization request denied because of medical necessity than White Medicare Advantage enrollees?
- Are Medicare Advantage enrollees with certain health conditions more likely to have a prior authorization request denied because of medical necessity than other Medicare Advantage enrollees?
Medicare Advantage insurers do not report how long prior authorization decisions take.
Medicare Advantage insurers are required to respond to prior authorization requests as “expeditiously as the enrollee’s health condition requires,” but no more than 14 days after receiving the request. Under certain circumstances, the plan can extend the timeframe by another 14 days. CMS has proposed to shorten this time limit to 7 days for non-urgent requests, and no more than 72 hours for urgent requests.
Under current law, Medicare Advantage insurers are not required to report data on the timeliness of initial decisions to CMS. This information would be useful in enforcing the current requirement that a decision is made as quickly as the person’s health condition requires. It would also be helpful in understanding variation in the average response time across types of services, for people with specific conditions, and across insurers. For example, people with diabetes might be interested in not just knowing whether they will need annual approval of their diabetes supplies, but also how long they can expect that authorization to take.
questions about the timeliness of prior authorization determinations that cannot be answered because data are not reported
- How timely are initial prior authorization determination and appeal decisions?
- How does the response rate vary for prior authorization requests for urgent versus non-urgent services?
- Do certain insurers respond to prior authorization requests more quickly?
Medicare Advantage insurers do not report complete data on denied claims for services that have already been delivered.
The Medicare Advantage encounter data do not have a field to definitively identify claims for which payment was denied. This contrasts with claims data for traditional Medicare. In a recent study, the Office of the Inspector General (OIG) concluded that the lack of this information makes it challenging or impossible to conduct oversight, including fraud investigations.
Medicare Advantage insurers also submit contract-level data on the number of payment requests by certain providers and whether those requests were approved or denied. These data currently exclude most requests for payment for services delivered by contract providers and do not include a reason for the denial, information about the type of service delivered, or the characteristics of the enrollees affected. Without this information it is not possible to determine how often Medicare Advantage insurers deny claims for services that have already been delivered, or to assess how denials vary across different dimensions.
Enhancing the Medicare Advantage encounter data and other information on payment requests submitted by Medicare Advantage insurers could help CMS and other policymakers conduct oversight. Additionally, this information may be helpful to beneficiaries who wish to assess the potential burden associated with ensuring services are paid for when choosing between plans.
questions on payment denials that cannot be answered because data are not reported
- How often do Medicare Advantage insurers deny payments for Medicare-covered services?
- Which types of services are most often denied after they have been delivered?
- What are the main reasons payments are denied and does that vary across plans and insurers?
- Which insurers deny claims after services have been delivered most often?
- How do denial rates vary across demographic characteristics of Medicare Advantage enrollees?
- Are payment denials more common among Medicare Advantage enrollees with certain health conditions than others?
Medicare Advantage insurers do not report benefit and cost sharing information for employer/union sponsored plans.
More than five million Medicare beneficiaries are enrolled in a group Medicare Advantage plan through a former employer or union. For group plans, the employer or union contracts with a Medicare Advantage insurer and Medicare pays a fixed, risk-adjusted payment per enrollee each month. The plan must cover all services covered under Part A and Part B of Medicare and may also provide supplemental benefits.
CMS requires Medicare Advantage insurers to submit information related to benefits, including cost sharing and the value of supplemental benefits, as well as anticipated gains/losses, as part of the annual bidding process for most plans they intend to offer in an upcoming plan year. However, because employer and union sponsored group plans are exempt from bidding, CMS does not collect this information. Thus, it is not possible to assess how benefits and cost sharing compare for those enrolled in a group plan versus those enrolled in a plan that is generally available for individual purchase or a special needs plan. Additionally, analyses of margins by plan type, such as those published annually by MedPAC, cannot separately consider employer and union sponsored plans.
Medicare pays more for enrollees in Medicare Advantage plans, including group plans sponsored by employers and unions, than for traditional Medicare beneficiaries. In addition, employer plans have their payments increased more on average under the quality bonus program (QBP) than other types of plans, with total spending for group plans under the QBP totaling at least $2 billion in 2022. Additional data are necessary to assess the value this higher spending provides to enrollees in these plans.
questions about employer and union retiree plan benefits that cannot be answered because data are not reported
- What supplemental benefits are offered by employer and union sponsored plans?
- How do benefit and cost sharing requirements vary across employer and union sponsored plans?
- How does the value of common supplemental benefits, such as dental, vision, and hearing, compare between employer and union sponsored plans versus individually available or special needs plans?
- Are margins for employer and union sponsored plans similar to margins for other types of Medicare Advantage plans?
Data That are Collected by CMS, but not Made Publicly Available
CMS does not publish out-of-pocket liability and other payment information for Medicare Advantage plans.
Medicare beneficiaries may be drawn to Medicare Advantage because of the potential for lower out-of-pocket spending, particularly compared to traditional Medicare without a supplemental insurance policy. The Medicare Payment Advisory Commission estimates that 39% of rebate dollars paid to Medicare Advantage insurers, or an average of $76 per enrollee per month, go toward reducing cost sharing. Additionally, unlike traditional Medicare, Medicare Advantage plans are required to have an annual out-of-pocket limit. However, little is known about actual out-of-pocket spending by Medicare Advantage enrollees.
CMS requires Medicare Advantage insurers to submit detailed encounter data that includes information about the services enrollees use and their diagnosed health conditions, as well as payment information. Based on a review of data submission requirements, it is unclear what information is reported, the level of detail of the payment information, or the extent to which reported data are accurate and complete. For example, it is not possible to determine how often Medicare Advantage insurers submit information about out-of-pocket liability. In addition, since providers in capitated arrangements or staff models do not receive a payment per service, information about payments to these providers for specific services is unlikely to be included in encounter data.
There is little transparency about both payments to providers and out-of-pocket liability because publicly available Medicare Advantage encounter data do not include information on either. Current regulations state that CMS may release data “subject to the aggregation of dollar amounts reported for the associated encounter to protect commercially sensitive data.” While this regulation may limit the level of detailed information CMS can release on payments to providers at the service level, it does not prohibit publishing any payment information, Further, it is not clear to what extent plans are required to report, or why CMS does not publish information on out-of-pocket liability. Plan-specific information about enrollee liability, which typically reflects out-of-pocket spending, and Medicaid spending for people dually eligible for Medicare and Medicaid, would help beneficiaries compare actual out-of-pocket liability both across plans and compared to traditional Medicare. It could additionally illuminate how cost-burdens vary across subgroups of Medicare Advantage enrollees, including those with particular health conditions, such as diabetes, heart disease, or cancer.
Medicare Advantage plans vary substantially in their cost-sharing structures. For many types of services, it is difficult to determine what enrollees are required to pay out of pocket, because cost sharing takes the form of coinsurance and the prices paid to providers are not reported. While current regulations may prevent CMS from publishing the prices Medicare Advantage insurers pay providers, CMS could provide information on the actual amounts for which enrollees were liable. This would be useful in examining the implications of the variation in cost-sharing structures.
Making available more detailed information about provider payments would inform our understanding of how Medicare Advantage insurers allocate resources across types of health care services, and how that compares to traditional Medicare. Medicare Advantage offers the promise of coordinated care that focuses on delivering high-value interventions before serious health care conditions develop. However, it is difficult to assess the extent to which plans incur expenditures, for example, for care coordination or preventive care, or whether they are more oriented toward reducing unnecessary and duplicative services. Such information would be useful in assessing how Medicare Advantage insurers are able to reduce their estimates of spending on Medicare-covered services relative to traditional Medicare for similar beneficiaries for these same services.
questions about out-of-pocket liability and other medicare advantage spending that cannot be answerED because data are not published
- How much spending are Medicare Advantage enrollees liable for across specific services, such as skilled nursing facility stays, MRIs, or chemotherapy?
- Does average out-of-pocket liability vary across plans or insurers?
- Do dual-eligible beneficiaries in special needs plans (SNPs) have higher or lower out-of-pocket liability than dual-eligible beneficiaries in non-SNPs? How does this vary across states and what might be the impact on state Medicaid spending?
- What share of Medicare Advantage enrollees reach their annual out-of-pocket limit each year?
- Do Medicare Advantage plans typically pay more, less or about the same as traditional Medicare for various services?
- How does spending by Medicare Advantage insurers on preventive services compare to traditional Medicare spending on these same services?
CMS does not publish the names of employers/unions that receive Medicare payments to provide Medicare Advantage group plans to retirees.
Employers are increasingly turning to Medicare Advantage to provide retiree health coverage. Often, retirees have no choice but to receive their retiree health benefits through a Medicare Advantage plan. If they are unhappy with the plan, they could opt for different coverage, but would have to give up their benefits, the value of which was arguably part of their compensation while working.
CMS collects the name and address of the employers who provide retiree coverage through Medicare Advantage plans, but does not publish it because it considers this information to be proprietary. Combined with the lack of information about plan benefits and cost sharing, not having information on which employers are offering retiree benefits through a Medicare Advantage plan makes it difficult to assess the implications for affected beneficiaries.
questions about sponsors of employer and union retiree plans that cannot be answered because data are not published
- What industries use Medicare Advantage to provide retiree health coverage most often?
- How do rebates, which fund supplemental benefits, vary across types of employers, including state and local governments?
- How is spending under the quality bonus program distributed across different types of employers?
CMS does not include characteristics of people who disenrolled from Medicare Advantage in published disenrollment data.
A relatively small share of beneficiaries in Medicare Advantage disenroll from their Medicare Advantage plan and switch to traditional Medicare, though the rates are higher for some groups, including people dually eligible for Medicare and Medicaid and those in their last year of life. While there is a contract-level composite measures for reasons for disenrollment, the data do not include characteristics of people who disenrolled. Adding information about the race/ethnicity, age, dual status, and long-term care facility residence could help promote health equity by providing the information to assess whether disenrollment is higher for certain groups, and whether the reason for disenrollment varies.
questions about disenrollment from Medicare advantage that cannot be answered because data are not published
- Do Black Medicare Advantage enrollees disenroll for different reasons than White Medicare Advantage enrollees?
- Are dual eligible beneficiaries more or less likely to disenroll from Medicare Advantage because of problems with coverage of doctors and hospitals?
- Do Medicare Advantage enrollees in poorer health disenroll more often because of problems getting the plan to provide and pay for needed care?
Payments to Medicare Advantage insurers are both higher and growing faster than spending in traditional Medicare. In 2023, the Medicare Payment Advisory Commission estimates that the Medicare program will spend 6% more per Medicare Advantage enrollee than for similar beneficiaries in traditional Medicare. Despite the higher payments, researchers have found few differences between Medicare Advantage and traditional Medicare in beneficiary experience, affordability, service utilization, and quality. However, gaps in Medicare Advantage data limit the extent to which comparisons can be made, as well as the ability to evaluate whether higher spending is leading to better value, improved outcomes, or reduced disparities.
Gaps in Medicare Advantage data also leave beneficiaries without important information to consider when choosing between traditional Medicare and Medicare Advantage, or between Medicare Advantage plans. Providing beneficiaries with the option of receiving their Medicare benefits through a private plan is meant to leverage competition to improve coverage and lower costs. To achieve those goals, beneficiaries need to be able and willing to differentiate and compare their options. Few beneficiaries compare their coverage options or change plans during the annual Medicare open enrollment period. One reason for this relatively limited engagement may be that beneficiaries do not have sufficient and easily understood information to compare plans.
CMS has the authority to require the additional data elements we discuss in this brief, though collecting some of this information will be easier than others. In some cases, filling these gaps would require substantial resources and time to be dedicated by CMS, and in others, Medicare Advantage insures would face a greater burden. However, increasing transparency in information about Medicare Advantage plans could improve program oversight and beneficiary decision making.
This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.