This year, during the
annual Medicare Open Enrollment period, more than 60 million people on Medicare
have the opportunity to choose between traditional Medicare and Medicare
Advantage plans. In making this decision, they are encouraged to take into
account a number of factors, including premiums, cost-sharing, extra benefits,
drug coverage, quality of care, and provider networks. A potentially overlooked
consideration is access to covered services; specifically, how prior
authorization may affect beneficiaries’ access to covered services.
Medicare Advantage
plans can require enrollees to get approval from the plan prior to receiving a
service, and if approval is not granted, then the plan generally does not cover
the cost of the service. Medicare Advantage enrollees can appeal the plan’s
decision, but
relatively few do so. Traditional Medicare, in contrast, does not
require prior authorization for the vast majority of services, except
under limited circumstances, although some think expanding use of
prior authorization could help traditional Medicarereduce
inappropriate service use and related costs. Optimally, prior authorization
deters patients from getting care that is not truly medically necessary,
reducing costs for both insurers and enrollees. Prior authorization
requirements can also create hurdles and hassles for beneficiaries (and their
physicians) and may limit access to both necessary and unnecessary care.
In this data note, we
examine the share of Medicare Advantage enrollees in plans that impose prior
authorization requirements for Medicare-covered services.
FINDINGS
·
80 percent of Medicare Advantage enrollees are in plans that
require prior authorization for at least one Medicare-covered service (Figure
1).
Figure 1: 4 in 5 Medicare Advantage enrollees
are in plans that require prior authorization for some services
·
At least 70 percent of enrollees are in plans that require prior
authorization for durable medical equipment, Part B drugs, skilled nursing
facility stays, and inpatient hospital stays.
·
60 percent of enrollees are in plans that require prior
authorization for ambulance, home health, procedures, and laboratory tests.
·
More than half of enrollees are in plans that require prior
authorization for mental health services.
In general, Medicare
Advantage plans typically use prior authorization for relatively high cost
services used by enrollees with significant medical needs, such as inpatient
care and drugs covered under Medicare Part B. Prior authorization is also being
used to limit access to services for which there has been evidence of
fraud, such as durable medical
equipment, and for services, such as home health, that have
experienced disproportionately
rapid growth in Medicare spending, at least in certain parts of
the country. Beginning in 2019, Medicare Advantage plans will also be allowed
to use prior authorization in conjunction with step therapy for Part B
(physician-administered) drugs, which could result in some enrollees being
required to try a less expensive drug before a more expensive one is covered.
Whether prior
authorization serves as an appropriate tool for limiting use of unnecessary
care or a worrisome barrier to medically necessary care is an important
question for both lawmakers and beneficiaries. Recently, more than 100 Members
of Congress sent
a letter to the Centers for Medicare and Medicaid Services
(CMS) Administrator, Seema Verma, expressing concern about Medicare Advantage
plans’ use of prior authorization, and asked CMS to collect data on the scope
of prior authorization practices to enable better oversight. The HHS Office of the Inspector
General (OIG) recently found that Medicare Advantage plans deny care –
inappropriately – at relatively high rates. To the extent that the OIG findings
are more the norm than the exception, they raise concerns for enrollees and questions
as to whether prior authorization rules contribute to the relatively high
rates of disenrollment among sicker Medicare Advantage
enrollees.
Currently, CMS does
not collect or disseminate plan-specific denial rates, as
it is required to do for plans offered in the ACA marketplaces, nor
assess the extent to which prior authorization rules affect enrollees’ access
to various types of services. Greater transparency with respect to prior
authorization could help explain how Medicare Advantage plans are managing care
and costs, help beneficiaries choose
among the many Medicare coverage options offered in their area,
and help CMS carry out its important oversight responsibilities on behalf of
the rapidly growing Medicare Advantage population.
Methods
This
analysis uses data from the CMS Medicare Advantage Plan Benefits Package Files
for 2018. The data indicate the services for which prior authorization is ever
required, but do not convey the specific conditions under which prior
authorization is required for a given service. Plan data are weighted by March
2018 enrollment.
https://www.kff.org/medicare/issue-brief/prior-authorization-in-medicare-advantage-plans-how-often-is-it-used/
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