Use of Prior Authorization in Medicare Benefit Exceeded 46 Million Requests in 2022

Nearly all enrollees in Medicare Benefit (99%) are required to acquire prior authorization for some companies – mostly, increased value companies, similar to inpatient hospital stays, expert nursing facility stays, and chemotherapy. This contrasts with conventional Medicare, the place solely a limited set of services require prior authorization. Prior authorization necessities are supposed to make sure that Health Care companies are medically mandatory by requiring approval earlier than a service or different profit might be lined. Medicare Benefit insurers sometimes use prior authorization, together with different instruments, similar to supplier networks, to handle utilization and decrease prices. This may increasingly contribute to their capability to supply further advantages and decreased value sharing, sometimes for no further premium, whereas sustaining robust monetary efficiency.

Some lawmakers and others have raised issues that prior authorization necessities and processes, together with the use of artificial intelligence to assessment requests, impose barriers and delays to receiving mandatory care. In response to a few of these issues, the Facilities for Medicare and Medicaid Companies (CMS) not too long ago finalized three guidelines. Amongst different modifications, the three guidelines clarify the criteria which may be utilized by Medicare Benefit plans to determine prior authorization insurance policies, streamline the prior authorization process for Medicare Benefit and sure different insurers, and require Medicare Benefit plans to evaluate the effect of prior authorization policies on individuals with sure social danger elements. Moreover, lawmakers in Congress have launched a number of payments to reform numerous features of prior authorization (see Field 1 on the finish).

To tell ongoing discussions about using prior authorization, this evaluation makes use of information submitted by Medicare Benefit insurers to CMS to look at the variety of prior authorization requests, denials, and appeals for 2019 by way of 2022, in addition to variations throughout Medicare Benefit insurers in 2022.

Key Takeaways:

• Greater than 46 million prior authorization requests have been submitted to Medicare Benefit insurers on behalf of Medicare Benefit enrollees in 2022, up from 37 million in 2019.
• In 2022, there have been 1.7 prior authorization requests per Medicare Benefit enrollee, just like the quantity in 2019. The rise within the whole variety of prior authorization requests corresponded to growing enrollment in Medicare Benefit and so translated into an identical variety of requests per enrollee.
• In 2022, insurers totally or partially denied 3.4 million (7.4%) prior authorization requests. Although insurers authorized most prior authorization requests, the share of requests that have been denied jumped between 2021 and 2022. The share of all prior authorization requests that have been denied elevated from 5.7% in 2019, 5.6% in 2020 and 5.8% in 2021 to 7.4% in 2022.
• Only one in ten (9.9%) prior authorization requests that have been denied have been appealed in 2022. That represents a rise since 2019, when 7.5% of denied prior authorization requests have been appealed. The low fee of appeals could also be attributed to enrollees not figuring out that they’ll enchantment a denial or discovering the enchantment course of intimidating. A previous KFF survey discovered that many individuals who expertise denials, together with these with Medicare, are confused by their protection and don’t know tips on how to file an enchantment with their plan.
• The overwhelming majority of appeals (83.2%) resulted in overturning the preliminary prior authorization denial. Although a small share of prior authorization denials have been appealed, greater than 80% of appeals resulted in partially or totally overturning the preliminary determination in 2022, and in annually between 2019 and 2021. These requests signify medical care that was ordered by a Health Care supplier and in the end deemed mandatory however was probably delayed due to the extra step of interesting the preliminary prior authorization determination. Such delays could have detrimental results on an individual’s Health.
• Medicare Benefit insurers range of their use of prior authorization. In 2022, the quantity of prior authorization determinations various throughout Medicare Benefit insurers, as did the share of requests that have been denied, the share of denials that have been appealed, and the share of selections that have been overturned upon enchantment, that means individuals could have totally different experiences relying on the Medicare Benefit plan wherein they enroll.

Use of Prior Authorization in Medicare Benefit

As a part of its oversight of Medicare Benefit plans, CMS requires Medicare Benefit insurers to submit information for every Medicare Benefit contract (which normally contains a number of plans) that features the variety of prior authorization determinations made throughout a 12 months, and whether or not the request was authorized. Insurers are moreover required to point the variety of preliminary selections that have been appealed (reconsiderations) and the result of that course of. These information are helpful for assessing total and insurer stage developments, however don’t include the Information mandatory to grasp how using prior authorization varies by sort of service or sort of plan.

In 2022, greater than 46 million prior authorization requests have been submitted to Medicare Benefit insurers.

After dropping in 2020 amid the preliminary part of the COVID-19 pandemic, prior authorization requests elevated steadily (Determine 1). The decline in 2020 was doubtless as a result of each a decline in utilization, in addition to some insurers’ determination to briefly Information-plans.pdf”>pause prior authorization necessities through the public Health emergency.

The latest improve within the whole variety of prior authorization requests corresponds to a rise in Medicare Benefit enrollment. Between 2019 and 2022, the variety of Medicare Benefit enrollees rose from 22 million individuals to twenty-eight million individuals. In 2019, there have been roughly 1.7 prior authorization requests per Medicare Benefit enrollee. That quantity dropped on the onset of the COVID-19 pandemic to 1.4 in 2020 and 1.5 in 2021, earlier than returning to the pre-pandemic stage of 1.7 requests per enrollee in 2022 (Determine 2).

Medicare Benefit insurers denied 3.4 million (7.4%) prior authorization requests in 2022.

Of the 46.2 million prior authorization determinations in 2022, greater than 90% (42.7 million) have been totally favorable, that means the requested merchandise or service was authorized in full. The remaining 3.4 million (7.4%) have been denied in full or partially. As compared, between 2019 and 2021, lower than 6% of prior authorization requests have been denied (Determine 3). Throughout all years, antagonistic determinations, wherein the request was denied in full, represented the vast majority of denials. In annually, a smaller share of determinations have been partially favorable, that means that solely a part of the request was authorized. For instance, the insurer could have authorized 10 of 14 requested remedy periods.

Simply 9.9% of denied prior authorization requests have been appealed in 2022.

The vast majority of the three.4 million denied prior authorization requests weren’t appealed, just like earlier years. In 2019, simply 7.5% of all denials have been appealed. That share elevated considerably in 2020 to 10.2% and was comparatively steady in 2021 (10.6%) and 2022 (9.9%) (Determine 4). These embody appeals of claims that have been each totally and partially denied.

The overwhelming majority of denied prior authorization requests that have been appealed have been subsequently overturned.

From 2019 by way of 2022, greater than eight in ten denied prior authorization requests that have been appealed have been overturned. That share was barely increased in 2022 (83.2%) than in 2019 (81.6%), 2020 (81.4%) and 2021 (81.3%) (Determine 5). This raises questions on whether or not the preliminary request ought to have been authorized, though IT might additionally point out that the preliminary request was lacking the required documentation to justify the service. In both case, sufferers probably confronted delays in acquiring companies that have been in the end authorized due to the prior authorization course of.

Variation in Use of Prior Authorization Throughout Medicare Benefit Insurers in 2022

Whereas all Medicare Benefit insurers require prior authorization for not less than some companies, there may be variation throughout insurers and plans within the particular companies topic to those necessities. As well as, insurers have the choice of waiving prior authorization necessities for sure suppliers, for instance, as a part of risk-based contracts or by way of “gold carding” applications that exempt suppliers with a historical past of complying with the insurer’s prior authorization insurance policies.

Prior authorization requests have been commonest amongst Humana plans.

The variety of prior authorization requests per enrollee ranged from a low of 0.5 requests per enrollee in Kaiser Permanente plans to a excessive of two.9 requests per enrollee in Humana plans (Determine 6). Kaiser Permanente is atypical amongst insurers in that IT usually operates its personal hospitals and contracts with an affiliated medical group. Trying throughout insurers which are extra comparable, the low finish of the vary was 0.9 requests per enrollee in each Cigna and UnitedHealthcare plans. Variations throughout Medicare Benefit insurers within the variety of prior authorization requests per enrollee doubtless mirror some mixture of variations within the companies topic to prior authorization necessities, the frequency with which contracted suppliers are exempted from these necessities, how onerous the prior authorization course of is for a selected insurer relative to others, and variations in enrollees’ Health circumstances and the Health Care companies they use.

CVS denied the best share or prior authorization requests.

The denial fee ranged from 4.2% of prior authorization requests for Anthem plans to 13.0% of prior authorization requests for CVS plans (Determine 7). The general denial fee contains requests that have been each totally and partially denied (antagonistic and partially favorable determinations, respectively).

Most insurers that had extra prior authorization requests per enrollee than common denied a smaller share of these requests than common and vice versa. The exceptions have been Centene, which had each a comparatively excessive variety of prior authorization requests (2.2 per enrollee) and above common denial charges (9.5%), and Cigna, which had one of many lowest variety of requests per enrollee (0.9) and denial charges (5.8%) that have been additionally beneath common.

Throughout most insurers, a small share of denials have been appealed.

Throughout most Medicare Benefit insurers, a small share of denied prior authorization requests have been appealed. The exception was Cigna, wherein 50.4% of all denials have been appealed. Throughout different insurers, the shares ranged from 3.5% for Kaiser Permanente to fifteen.2% for BCBS Anthem (Determine 7). The substantial variation could mirror variations in each the prior authorization request and the appeals processes throughout insurers. For instance, Cigna additionally had one of many lowest variety of prior authorization requests per enrollee and denied a beneath common share of requests. Altogether, the variety of appeals per enrollee amongst individuals enrolled in Cigna plans was extra just like these enrolled in plans sponsored by different insurers than the appeals fee would possibly counsel. The variations might current challenges for suppliers who usually should work together with a number of non-public insurers. Alternatively, IT might mirror variations in how the insurers interpreted the info reporting necessities. The excessive fee of enchantment throughout Cigna plans could be very a lot an outlier. Sadly, the info don’t enable for a extra in-depth examination as a result of they lack further element.

Throughout all companies, not less than two-thirds of appeals have been profitable.

Though most denials weren’t appealed, once they have been, many of the preliminary selections have been partially or totally overturned. The share of appeals that resulted in favorable selections was lowest for Humana (68.4%). Two insurers overturned greater than 9 in 10 of the preliminary selections that have been appealed, with CVS overturning 90.8% and Centene overturning 95.3% of denials upon enchantment (Determine 9).