The federal government allows health insurers to use prior authorization in Medicare Advantage with near impunity. As a result, while health insurers must cover all Medicare benefits, they too often do not. They override the decisions of treating physicians and use prior authorization to deny Medicare-covered care. To avoid this dangerous insurer game-playing with people’s health and to protect enrollees, a centralized agency should conduct all prior authorization in Medicare Advantage.
Today, a Medicare Administrative Contractor or MAC processes all claims in Traditional Medicare. The MAC permits consistency and fairness in coverage of Medicare benefits across Traditional Medicare. Moreover, Traditional Medicare rarely uses prior authorization and defers to treating physicians. In Medicare Advantage, insurers each design their own prior authorization protocols, coming between patients and their doctors about the care patients need. The insurers make it impossible to compare plans, let alone to know whether protocols are evidence-based.
We know from investigations into Medicare Advantage that insurers engage in widespread and persistent inappropriate delays and denials of care. But, neither Congress nor the Centers for Medicare and Medicaid Services, which oversees Medicare, has done anything to fix this glaring prior authorization problem in the program or let people know which Medicare Advantage plans to avoid. So, older adults in Medicare Advantage are left with no way to know whether the Medicare HMOs they choose will cover the care they need and to which they are entitled.
What’s more, insurer use of prior authorization is on the rise. It’s a revenue-generating tool for insurers. For every service insurers in Medicare Advantage subject to prior authorization, they can bank on greater revenue. Every service they deny or even delay is money in their pockets. The conflict of interest is transparent.
Having an independent contractor determine whether services are medically necessary would help ensure that people in Medicare Advantage receive the Medicare benefits to which they are entitled. It would also make it easier for people to compare Medicare Advantage plans. Right now, they are throwing darts, literally putting their lives at risk, in some cases, when they enroll in a Medicare Advantage plan. One NBER study found that if CMS cancelled contracts with the five percent of worst performing MA plans it would save tens of thousands of lives each year.
In a paper for JAMA Network, Hayden Rooke-Ley et al. estimated that MA plans subjected 50 million procedures to prior authorization in 2024, one prior authorization for every 1.5 members. Insurers use prior authorization to deter physicians from providing certain services. The time and cost of getting approvals is huge. Insurers denied more than three million services (6.4 percent).
The HHS Office of the Inspector General has found that 13 percent of denials in Medicare Advantage were inappropriate. Traditional Medicare would have covered them. In short, right now, people in Medicare Advantage get fewer benefits than people in traditional Medicare.
On top of that, insurers too often do not pay physicians and other providers for the care they provide Medicare Advantage enrollees. Having an unbiased MAC both responsible for prior authorization and for paying providers appropriately would help fix these wrongs in Medicare Advantage.
Here’s more from Just Care:
- OIG finds Medicare Advantage continues to overcharge government
- OIG finds widespread inappropriate care denials in Medicare Advantage
- Medicare Advantage inappropriate denials of care abound
- Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan
- AHA warns Medicare oversight agency about dangers of Medicare Advantage
