RESOLVING THE LEDGER
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0 Share Newsweek is a Trust Project member See more of our trusted coverage when you search. Prefer Newsweek on Google to see more of our trusted coverage when you search. Health insurers participating in Medicare Advantage, Medicaid managed care and Affordable Care Act (ACA) marketplace plans denied at least one in eight standard prior authorization requests last year, according to a new analysis from KFF.
The report found denial rates ranging from 12 percent in Medicare Advantage plans to 18 percent in ACA marketplace coverage, but there were significant differences between insurers.
“I am shocked the numbers are not higher in some cases,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek . “As I was recently in the ICU with a family member, I was informed by the administrative staff that they would need to send up the authorization multiple times because the first ones are almost always denied by Medicare Advantage plans. They said it takes at least two or three times for most approvals.”
Prior authorization has received increased scrutiny in recent years as it is a process insurers use to approve certain tests, treatments, medications and hospital services before they are covered.
Some feel the practice can delay or prevent needed care, but insurers say it helps control costs and reduce unnecessary treatment.
Newsweek reached out to Centene, UnitedHealth, Elevance and CMS for comment via email.
More than half of Medicare beneficiaries are enrolled in Medicare Advantage plans, making prior authorization decisions a significant factor in whether seniors can access services recommended by their doctors.
The new KFF report showed that while most requests are approved, a notable percentage are denied, and many of those denials are later reversed on appeal.
The report was based on insurer data that companies are required to publish under Centers for Medicare & Medicaid Services (CMS) transparency rules that took effect this year.
Among the largest Medicare Advantage insurers included in the KFF analysis, denial rates for standard prior authorization requests varied widely. KFF found that denial rates ranged from 5 percent at Elevance to 17 percent at UnitedHealth Group.
“What's most surprising is not simply that insurers are denying care, but how dramatically denial rates can differ depending on the company and type of coverage, suggesting that a patient’s access to treatment can be as much about their insurance card as by the recommendation of their physician,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek .
He continued: “Insurers generally argue these decisions reflect medical-necessity standards or incomplete information, but the substantial variation raises questions about whether those standards are being applied consistently.”
The report found even larger variation in other government-backed coverage programs.
For Medicaid managed care plans, denial rates ranged from 2 percent at L.A. Care Health Plan to 23 percent at Independence Health Group. For ACA marketplace plans sold through the federally facilitated exchange, denial rates ranged from 3 percent at GuideWell to 25 percent at Centene.
One of the report's most striking findings is how often denials are overturned when patients appeal.
KFF found that 67 percent of Medicare Advantage denials were overturned on appeal. Meanwhile, 47 percent of Medicaid managed care denials were overturned, and 43 percent of ACA marketplace denials were overturned.
However, appeals remain relatively uncommon, meaning many denials may never be challenged.
“Automatic denials in many cases typically lead to people no longer asking for that particular procedure or authorization. If they continue to push for approval, they likely believe the procedure is medically necessary,” Thompson said. “It could be a way to weed out authorizations that are illegitimate, but with that, we know there are some who will never receive what they need in a timely manner.”
The KFF report follows earlier findings from the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) raising concerns about Medicare Advantage prior authorization practices.
In a June report, federal investigators found substantial variation in denial rates for certain post-acute care services among Medicare Advantage organizations and said that many denials were later overturned after appeals.
This suggests many patients may have initially been denied medically necessary care.
“The greater concern for Medicare is that when few patients appeal but large percentages of appealed Medicare Advantage denials are ultimately overturned, it suggests the system may sometimes be creating barriers to appropriate care rather than just eliminating waste,” Beene said.
Another OIG report found that Medicare Advantage organizations overturned 95 percent of appealed denials involving skilled nursing facility admissions.
CMS has required plans to publicly report their prior authorization data to improve transparency for patients.
Health insurers have also been under pressure from regulators and lawmakers to simplify their prior authorization procedures.
“For-profit health insurance in a program that is seen as a necessity, while being government-backed in many cases as the government reduces reimbursements for care, seems like a double-edged sword that many cannot wrap their heads around,” Thompson said.
Contact Newsweek editors for this story: Jason Lemon and Anthony Murray .
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