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If it feels as though prior authorization is more prevalent than it used to be, you're right — and Medicare Advantage isn't helping. According to a new report from the Kaiser Family Foundation, the explosive growth of MA plans over the past 10 years has been accompanied by increased use of prior authorization — more than 35 million determinations were made by MA plans in 2021 alone — with little consistency among plans as to what requires prior authorization, what gets denied, and how appeals are resolved.

Authors write that their findings show "how little is known about the implications [of prior authorization] for enrollees, including delays in treatment or differences in criteria used in making coverage decisions." The report underscores the concerns of APTA and other organizations pressing for improvements to prior authorization use in MA and other federal programs as well as commercial settings.

An Average of 1.5 Prior Authorization Requests per Enrollee in 2021, and a 6% Denial Rate — With a Lot of Variation
Using U.S. Centers for Medicare & Medicaid Services data gathered on prior authorization in 515 MA contracts — about 87% of total MA enrollment — during 2021, the KFF researchers were able to assemble a snapshot of not only the extent of prior authorization use, but also differences among various MA plan providers’ reliance on prior authorization and patterns surrounding appeals of denials.

Overall, the 35.2 million prior authorization determinations made by MA plans in 2021 average out to about 1.5 requests per MA enrollee, but authors of the report say that doesn't tell the whole story — namely, that the use of prior authorization varies widely among MA firms, from a rate of 0.3 requests per enrollee in Kaiser Permanente plans to a high of 2.9 requests per enrollee in Anthem MA offerings.

Of the prior authorization requests submitted, an average of 6% were denied across plans, but again, variation among plan providers is high. Among the firms studied, Humana recorded the lowest rate of denials, at 3%, with CVS and Kaiser Permanente topping the list at 12% each. Authors point out that the variation tended to be linked to the number of authorization requests received by each firm — the higher the number of requests, the lower the rate of denials. In the end, they write, that means that the overall average rate of denials is fairly consistent among plans, at about 0.07 per enrollee in 2021.

Appeals Don't Happen Often
According to the report, only 11% of denials are appealed, a figure that includes claims that were fully and partially denied. Of the denials appealed, 82% were overturned with results favorable to patients.

Again, variation was significant, with CVS at the top, receiving appeals for 20% of its denials, followed by Cigna at 19%. At the other end of the spectrum, Blue Cross Blue Shield plans, MA plans from Centene, and Anthem MA plans each received appeals for 7% of their denials, with Kaiser Permanente at the bottom with a 1% appeal rate.

In terms of denials eventually overturned (fully or partially), the 82% average encompasses a range of individual firm averages, from a high of 94% at Centene to a low of 70% among Humana plans. Kaiser Permanente was even lower, at 30%, but authors believe that this number, in addition to lower rates of appeals and initial prior authorization requests, could be due to Kaiser Permanente's "atypical" ownership of hospitals and contracts with medical groups.

Across payer settings, APTA urges PTs to appeal denials that they believe were made in error, and offers resources on appeals, including templated letters for addressing denials associated with CMS.

Patterns That Raise Questions
Authors of the report say the limited data they were able to study points out the need for additional analysis around the ways prior authorization requests may vary around types of services, the reasons for denials, differences among plan types, and the timeliness of determinations and appeal decisions. Answers to some of these questions eventually may be brought to light if CMS follows through on its APTA-supported proposed rule on prior authorization, but a clear picture may be years away.

As for the data that was available to the researchers, authors of the report believe even those more general numbers give rise to concerns about the possible harm to patients caused by prior authorization.

"The high frequency of favorable outcomes upon appeal raises questions about whether a larger share of initial determinations should have been approved," they write. "Alternatively, it could reflect initial requests that failed to provide necessary documentation. In either case, medical care that was ordered by a health provider and ultimately deemed necessary was potentially delayed."

[Don't miss out on a significant opportunity to reduce the burden of prior authorization in multiple federal programs by pressing for the adoption of new rules by CMS. Read this APTA article on the proposed rule, the CMS fact sheet on the changes, and even the proposed rule itself. Then, get ready to write your letter by reviewing APTA guidance.]

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