Medicare Advantage prior authorization and claims reviews are too often failing patients and providers. Insurers have a fundamental conflict of interest — their incentive is to delay, downgrade and deny care, using prior authorization and claims reviews as profit tools. In 2024 alone, insurers issued roughly 50 million prior authorizations — one for every 1.5 members. MA plans denied 6.4% of those requests.
Claims reviews are even bigger numbers. The result: millions of inappropriate denials, serious health consequences, including premature deaths. Providers pay a steep price too. They waste enormous time navigating opaque, proprietary prior authorization protocols — protocols that differ across plans and populations — and they face post-service payment downgrades nearly 10% of the time. The HHS Office of the Inspector General reported that MA plans denied 9.5 percent of all claims in 2024.
The Centers for Medicare and Medicaid Services (CMS) can’t effectively protect patients and providers. It can’t oversee insurer prior authorization protocols in real-time. Moreover, because insurers don’t disclose complete, accurate and timely encounter data, MedPAC, the Medicare oversight agency, has reported year after year that it cannot assess Medicare Advantage plan quality. Patients are left gambling with their lives, with no reliable way to identify and avoid bad Mediare Advantage actors.
We don’t know the extent to which allowing insurers to do Medicare Advantage claims reviews and prior authorization improves care. There is no evidence that it does. We do know that they all behave differently, and it creates huge variations in patient health outcomes among Medicare Advantage that no one understands. Thousands of people die needlessly every year in the worst performing Medicare Advantage plans.
Fortunately, there is a simple solution. Standardize prior authorization and claims reviews. Transfer responsibility for claims reviews and prior authorization from insurers to a Medicare Administrative Contractor, as we do in Traditional Medicare.
For physicians, this means standardized claims reviews, transparent evidence-based prior authorization protocols, guaranteed prompt payment, an end to post-service payment downgrades and less administrative hassle. For patients, fewer delays and greater assurance they’ll receive the care they need. For the system, complete, accurate, and timely encounter data — finally enabling analysts to assess plan quality and making it easier to address emerging issues and drive real improvements.
Insurers would focus more on what they should do: care coordination, preventive care, and care management. Of course, insurers will resist — they’ll lose the ability to profit from inappropriate care and coverage denials. But, they insist that their claims reviews and prior authorization protocols are based on evidence-based clinical standards. Moving these processes to an independent agency would ensure that their claim reviews and PA protocols would be based on clinical standards; standardizing them across all Medicare Advantage plans and simplifying the claims administration process makes sense.
In addition to helping patients and providers, transferring claims administration and prior authorization to an independent entity would ensure the availability of good, timely enrollee data that we need for oversight and accountability.
New procedures may lack PA protocols initially, though a fast-track submission pathway could address that. Insurers would no longer face a conflict of interest in ensuring their enrollees receive needed care.
Of course, insurers would still have incentives to avoid enrolling costly patients as well as to narrow networks further. And, this proposal still doesn’t help people avoid the bad actor Medicare Advantage plans, ones with inadequate networks and broad access barriers. But eliminating the insurer conflict of interest in claims administration and prior authorization and getting good timely data are a meaningful, achievable first step to improving the system for patients and providers.
Here’s more from Just Care:
- Oncologists report excessive deaths from prior authorization
- Insurers misuse prior authorization even for simple treatments
- New physician survey finds prior authorization harms cancer patients
- Medicare Advantage costs and prior authorization rules impede access to care
- Issues with network adequacy and prior authorization in Medicare Advantage persist
