Study Highlights Need for Medicare Advantage Prior Authorization Reform

Enrollment in Medicare Advantage—the commercial alternative to traditional fee-for-service Medicare—has been steadily on the rise since the early 2000s. With strong, bipartisan support for the Medicare Advantage program in Congress and the Biden administration finalizing earlier this year the largest rate increase to the program since the Bush presidency, the number of enrollees in Medicare Advantage is soon expected to surpass those in traditional Medicare. In fact, the Medicare Payment Advisory Commission (MedPAC) reported to Congress that 46 percent of Medicare beneficiaries with both Part A and Part B coverage were enrolled in a Medicare Advantage plan in 2021. MedPAC noted that if the current trend continues, this figure will exceed 50 percent by next year.

However, prior authorization requirements tend to be much more strenuous for Medicare Advantage plans compared to traditional Medicare, which does not require prior authorization for most services. The biggest concern with these prior authorization requirements is that they can be a barrier to patients who are accessing necessary services and treatments, leading to delays in care and potential harm to patients. Provider groups have expressed concerns with excessive prior authorization requirements in the Medicare Advantage program for years and pointed out the potential for their inappropriate use. Specifically, there is a concern with the misalignment of incentives in the Medicare Advantage payment model because these plans can increase their own profits by denying access to medically necessary care and reimbursement.

In response to these concerns, the Department of Health and Human Services’ Office of Inspector General (OIG) conducted a study to examine the appropriateness of Medicare Advantage plans’ prior authorization and payment denials. In its analysis, OIG found that among the prior authorization requests that Medicare Advantage plans denied, 13 percent met Medicare coverage rules, meaning that the services would have been approved if the patient had been covered by traditional Medicare. OIG also found that among the payment requests that Medicare Advantage plans denied, 18 percent met Medicare coverage and plan-specific billing rules. In some of the identified cases, prior authorization or payment denials that met Medicare coverage and plan-specific billing rules were reversed, often following a beneficiary- or provider-initiated appeal or dispute process.

As a result of this study, it is more evident than ever that there is a need for reform around the use of prior authorization in the Medicare Advantage program. For this reason, ACCC supports the Improving Seniors’ Timely Access to Care Act of 2021, which would require Medicare Advantage plans to standardize and streamline prior authorization processes and increase the transparency of their requirements to prevent unnecessary denials and delays in patient care. The legislation would also create an electronic prior authorization program to eliminate the need for faxes and would provide real-time determinations for items and services that are routinely approved.

If you are an ACCC member and would like to encourage your federal representatives in Congress to support the Improving Seniors’ Timely Access to Care Act, you can register for ACCC’s 2022 Virtual Hill Day. This event will allow members to experience advocacy trainings, legislative briefings, and congressional meetings from the comfort of their home or office. The prior authorization bill is one of several pieces of legislation that ACCC advocates will be encouraging members of Congress to support on Hill Day.

Learn more about Virtual Hill Day on ACCC's website.

Matt Devino, MPH, is the Director of Cancer Care Delivery and Health Policy at ACCC.