Medicare Advantage plans denied two million prior authorization requests for health care services in whole or in part in 2021, or about six percent of the 35 million requests submitted on behalf of enrollees that year, a new KFF analysis finds.
Prior authorization is intended to ensure that health care services are medically necessary by requiring providers to obtain approval before a service or other benefit is covered. While prior authorization has long been used to contain spending and prevent people from receiving unnecessary or low-value services, there are some concerns that it may create barriers to receiving necessary care. (Traditional Medicare does not require prior authorization except for a limited set of services.)
The analysis also finds variations in both the volume of prior authorization requests and denial rates across insurers. In general, insurers with higher numbers of prior authorization requests denied a lower share of those requests. The variation across insurers likely reflects differences in the services subject to prior authorization and the frequency with which contracted providers are exempted from these requirements, as well as variations in the use of other tools to manage utilization by plan enrollees.
Only about 11 percent of denials of prior authorization requests were appealed, the analysis finds. However, of the appeals that were filed, the vast majority (82%) resulted in fully or partially overturning the initial denial.
The high rate of successful appeals raises questions about whether a larger share of the initial prior authorization requests should have been approved. Alternatively, it could reflect problems with documentation that were subsequently rectified during the appeal. In either case, medical care ordered by physicians or other practitioners ultimately deemed necessary by the insurers was potentially delayed by the prior authorization process.
As Medicare Advantage enrollment continues to grow, a better understanding of prior authorization will help inform how the policy affects the use of health care services and the quality of the care that beneficiaries receive.