Medicare Advantage, the privatized alternative to traditional Medicare, has increasingly denied prior authorization requests from seniors in recent years, according to a recent report by the health policy research firm KFF, published on August 9, 2024.
Serving over half of Medicare beneficiaries, Medicare Advantage offers benefits like lower premiums and additional coverage for dental and vision care.
However, it requires prior authorization for certain treatments and restricts patients to a network of approved providers as posted by Newsweek on Friday, August 9, 2024.
The KFF report reveals a significant rise in denial rates for prior authorization requests between 2021 and 2022.
The denial rate climbed from 5.8% to 7.4%, with a total of 3.4 million requests being denied.
This increase contrasts with a lower denial rate of 5.6% in 2020, indicating growing frustrations among seniors regarding their healthcare coverage under Medicare Advantage.
Prior authorization is designed to verify the medical necessity of treatments before coverage approval.
Yet, many seniors feel that their requests are being denied without adequate justification.
According to Michael Ryan, a finance expert, some seniors have reported distressing experiences, such as having their coverage denied for critical specialist visits they had waited months to receive.
The report highlights a concerning trend: although only 10% of denied requests were appealed in 2022, 83% of those appeals were successful, overturning the original denial.
This suggests that many seniors may not be aware of their right to appeal or may not pursue it, even though the appeal process often results in a reversal of the denial.
Cost pressures on insurers are likely driving the increase in denials.
As seniors use more benefits than expected, insurance companies are struggling with reduced profits.
In response, some insurers have opted to exit certain markets.
For instance, Humana plans to cut several hundred thousand members next year, and Centene Corp will discontinue its Medicare Advantage plans in at least six states by 2025.
Despite these challenges, Ryan suggests that insurers are not necessarily at fault.
They are trying to balance cost control with the need to provide quality care, although this balance sometimes results in excessive denials.
Issues often arise from discrepancies between Medicare rules and insurer policies, which can create barriers to care for many seniors.
The concentration of the Medicare Advantage market among a few large insurers may also be contributing to the problem, as these dominant players set the rules and policies that affect millions of beneficiaries.
This concentration could lead to unintended consequences, including increased denials of necessary treatments.
Seniors facing prior authorization denials are encouraged to appeal these decisions.
Alex Beene, a financial literacy instructor, advises that many seniors either do not know about the appeal process or choose not to use it.
However, those who do appeal often succeed in overturning the initial denial, underscoring the importance of pursuing this option when faced with coverage challenges.
The rise in denied prior authorization requests in Medicare Advantage reflects broader issues within the system, including cost pressures on insurers and market concentration.
Seniors experiencing denials should consider appealing to improve their chances of obtaining the care they need.
