What is prior authorization in medicare plans? ​

Prior authorization is preapproval for medical services or prescription drugs that health insurance plans often require before they’ll cover the cost. Typically, a provider or supplier

submits forms to a health insurance plan to verify the need for a specific drug, piece of equipment or service. Plans put these requirements in place to avoid paying for unnecessary services

or expensive procedures and drugs when a lower-cost version that’s available could work just as well. Prior authorization also lets patients know ahead of time if their plan will approve

something that’s not always covered rather than having to appeal a denial after the fact. But how often and under what circumstances prior authorization is required depends on the health

plan. While original Medicare has a few prior authorization requirements, private Medicare Advantage plans and Part D prescription drug plans use this procedure more often. In fact, a new

study by KFF, formerly the Kaiser Family Foundation, released in August found Medicare Advantage prior authorization requests increased significantly from 37 million in 2019 to more than 46

million in 2022. The share of denied prior authorization requests also increased after several years of being stable, from 5.8 percent in 2021 up to 7.4 percent in 2022. What’s more, KFF

uncovered that the majority of denials in Medicare Advantage plans were overturned on appeal. WHAT IS PRIOR AUTHORIZATION IN ORIGINAL MEDICARE? Original Medicare rarely requires prior

authorization. The government program covers medically necessary services without requiring you or your doctor to submit special forms in advance or even a referral to see a specialist.

ORIGINAL MEDICARE PRIOR AUTHORIZATION Original Medicare requires prior authorization only for three types of services. In 2022, most of the requests were approved in an average of about four

days.  OUTPATIENT SERVICES, PRIMARILY DERMATOLOGY • PERCENTAGE APPROVED: 78.6 percent • AVERAGE TIME: 4.5 days • DENIALS OVERTURNED ON APPEAL: 0.3 percent   DURABLE MEDICAL EQUIPMENT •

PERCENTAGE APPROVED: 66.9 percent • AVERAGE TIME: 4.7 days • DENIALS OVERTURNED ON APPEAL: 0.3 percent  NONEMERGENCY AMBULANCE SERVICES • PERCENTAGE APPROVED: 63.2 percent • AVERAGE TIME: 

4.1 days • DENIALS OVERTURNED ON APPEAL: 3.9 percent  _Source: __Centers for Medicare & Medicaid Services___ In the few instances when authorization is needed, a Medicare

administrative contractor (MAC) reviews the request and makes a decision WHAT IS PRIOR AUTHORIZATION IN MEDICARE ADVANTAGE? Prior authorization requirements are more common in Medicare

Advantage plans. A separate KFF study found that almost all Medicare Advantage enrollees in 2024 — 99 percent — are in plans that require prior authorization for some services, the most

common being: * DURABLE MEDICAL EQUIPMENT: 99 percent * SKILLED NURSING FACILITY STAYS: 99 percent * SUDDEN, SHORT-TERM INPATIENT HOSPITAL STAYS, called acute care: 98 percent * PART B

DRUGS, which are generally given in a doctor’s office or outpatient center, such as chemotherapy: 98 percent * PSYCHIATRIC INPATIENT HOSPITAL STAYS: 93 percent * DIAGNOSTIC LAB WORK AND

TESTS: 92 percent * HOME HEALTH SERVICES: 90 percent * DIABETIC SUPPLIES AND SERVICES: 87 percent * COMPREHENSIVE DENTAL SERVICES: 86 percent “Virtually all Medicare Advantage enrollees are

in plans that require prior authorization for at least some services,” says Jeannie Fuglesten Biniek, associate director for KFF’s program on Medicare policy and coauthor of the recently

released MA study. “These are often for higher-cost services, such as inpatient hospital stays, skilled nursing facility and chemotherapy. These are things people are using at a time when

they’re particularly vulnerable.” Medicare Advantage plans are prohibited from applying prior authorization requirements on emergency services, and they must disclose rules and other review

requirements to enrollees. Before choosing a Medicare Advantage plan, read the plan’s evidence of coverage (EOC) to find out more about its prior authorization rules.   In 2022, the U.S.

Department of Health and Human Services Office of Inspector General studied a random sample of 250 prior authorization denials issued by 15 of the largest MA plans from June 1–7, 2019. The

government found that original Medicare likely would have covered 13 percent of the services denied. In 2024, the Centers for Medicare & Medicaid Services (CMS) started to require

Medicare Advantage plans to streamline their prior authorization process to ensure people with Medicare Advantage receive access to the same medically necessary care they would receive in

original Medicare. “We know how frustrating it can be when people have their care denied by their health plan, and we want to make sure there is access to necessary medical care,” Meena

Seshamani, M.D., and director of the CMS Center for Medicare said in an interview with AARP. “So now, if traditional Medicare has a coverage decision, Medicare Advantage has to follow it.

They cannot create additional hoops to jump through or barriers to access that care." Beginning in 2026, Medicare Advantage plans will be subject to new prior authorization rules that

will shorten the time frame for insurers to respond to requests from 14 to seven days and make the process more transparent.