Almost all Medicare Advantage enrollees (99%) must obtain prior authorization for certain services, particularly higher-cost services such as inpatient hospital stays, skilled nursing facility stays, and chemotherapy. This change in approval is a significant difference from traditional Medicare, where only a limited set of services require prior authorization.
Objective for prior authorization
The purpose of prior authorization is to ensure the medical necessity of health care services by requiring approval before coverage. Medicare Advantage insurers use this and other tools like provider networks to manage utilization and lower costs, potentially allowing for extra benefits and reduced cost sharing without additional premiums. However, this can also lead to administrative challenges for providers, delays in care for patients, and denials of medically necessary services.
This analysis uses data submitted by Medicare Advantage insurers to the Centers for Medicare and Medicaid Services (CMS) to examine trends in prior authorization requests, denials, and appeals from 2019 to 2023 and differences across Medicare Advantage insurers. It does not include determinations or denials by type of service or plan, though this information could be helpful for consumers in choosing plans. The analysis also provides data from CMS about the use of prior authorization in traditional Medicare for 2021 to 2023, including the number of reviews and denials, share appealed, and appeal outcomes for 2021 and 2022.
Key Takeaways
In 2023:
- Nearly 50 million prior authorization determinations reflect steady year-over-year increases since 2021 (37 million) and 2022 (42 million).
- Similar to 2019, there were nearly two prior authorization determinations per Medicare Advantage enrollee on average.
- Insurers fully or partially denied 3.2 million prior authorization requests, a smaller share (6.4%) of all requests than in 2022 (7.4%).
- Most appeals (81.7%) were partially or fully overturned.
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