Medicare Advantage Plans: Prior Authorization Denial Rates

Prior authorization form with pen, calculator and glasses on desk

(Image credit: Getty Images)

When you are sick or in pain, the prior authorization process can be frustrating and will sometimes result in a denial. If you've never been through the process, prior authorization is a requirement that a health care provider obtain pre-approval from your insurer to provide a given service. This is true whether you are covered by Original Medicare or a Medicare Advantage Plan (MA). In 2023, Medicare Advantage insurers made nearly 50 million prior authorization determinations. As enrollments in MA plans have grown, the number of prior authorizations has steadily increased, according to a KKF study.

Original Medicare requires prior authorization for a substantially smaller set of procedures and services than most MA plans. Medicare services that typically require prior authorization include certain outpatient hospital services, non-emergency ambulance transport, and durable medical equipment. For 2023, just under 400,000 prior authorization reviews for traditional Medicare beneficiaries were submitted to CMS.

If you are considering signing up for an MA plan during Medicare Advantage open enrollment (from January 1 to March 31), knowing prior authorization denial rates can help inform your choice.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Prior authorization denial rates overview

The KKF study revealed that Humana Medicare Advantage plans had the highest average number of prior authorization requests per member and the lowest denial rate. Humana was one of the lowest-rated plans by patients in a U.S. Medicare Advantage Study, coming in dead last among three of the ten states included in the rankings. So, take these ratings with a grain of salt. While they reveal, on average, how many prior authorizations a particular insurer requires and the denial and appeal rates, the numbers lack some important details.

The CMS currently doesn't collect a lot of data from Medicare Advantage plans, including how prior authorization requests, denials, and appeals break down by type of service or enrollee characteristics. They don't require reasons for prior authorization denials or what share of Medicare Advantage claims that are denied after service has been provided.

That means we don't know what services have the highest prior authorization denial rates, how often certain insurers attribute denials of prior authorization requests to medical necessity more often than others, or how often Medicare Advantage insurers deny payments for Medicare-covered services.

Average number of prior authorization requests per Medicare Advantage patient

Medicare Advantage plans must cover all medically necessary services that Original Medicare covers. For some services, MA plans may use their own coverage criteria to determine medical necessity. Almost all Medicare Advantage enrollees — 99% according to KKF — must obtain prior authorization for some services. These are typically higher-cost services, such as inpatient hospital stays, skilled nursing facility stays and chemotherapy.

Prior approval determines if the service is medically necessary and should be covered by the insurance plan. Prior approvals also help control costs. On the downside, essential care for beneficiaries may be delayed as they wait for an authorization determination and appeal a denial. Below is a chart showing the average number of prior authorizations requested by patients per Medicare Advantage plan.

Humana and Anthem/ Elevance Health MA plans both had the highest number of prior authorizations per member but also had the lowest denial rates, at 3.5% and 4.3%, respectively. Due to limitations on data collection, we don't know which, if any, services were denied at a higher rate and the cost of services more likely to be denied.

Swipe to scroll horizontally

Average prior authorizations requested per patient and denial rates
Medicare Advantage plan	Average number of prior authorization requests, per member (2023)	Prior authorization denial rates (2023)
Humana	3.1	3.5%
Anthem/ Elevance Health	3.1	4.3%
Centene	2.4	13.6%
Blue Cross Blue Shield plans	2.3	5.8%
All other plans	2.1	5.3%
Cigna	1.9	7.7%
CVS Health	1.3	11%
United-Healthcare	1.0	9.1%
Kaiser Permanente	0.5	10%

Medicare Advantage plans prior authorization denial rates and success rate of overturning denial on appeal

In 2023, insurers fully or partially denied 6.4%, or 3.2 million, prior authorization requests. That represents a drop from all requests made in 2022 (7.4%), as reported by KKF. For comparison, the Centers for Medicare and Medicaid Services completed almost 400,000 prior authorization reviews for Original Medicare in 2023 and denied 28.8%, or 113,448 of requests received.

Centene and CVS Health Medicare Advantage plans had the highest denial rates for prior authorization requests. A silver lining was the high rate of successful appeals. The appealed denials were overturned at a rate of 93.6% and 89.7% respectively. Centene is one of the smaller MA insurers, only covering about 1.1 million MA enrollees or 2% of the market. CVS Health has a 12% share of the market and covers 4.1 million of the 32.8 million people enrolled in Medicare Advantage plans.

Swipe to scroll horizontally

Plan Name	Prior authorization denial rates (2023)	Share of denied prior authorization requests appealed (2023)	Share of appealed prior authorizations denials overturned (2023)
Humana	3.5%	9.1%	64.9%
Anthem/ Elevane Health	4.3%	6.4%	71.1%
Other	5.3%	8.8%	69.8%
Blue Cross Blue Shield	5.8%	10.4%	80.7%
Cigna	7.7%	18.0%	86.0%
UnitedHealthcare	9.1%	15.5%	85.2%
Kaiser Permanente	10%	1.7%	42.4%
CVS Health	11%	16.8%	89.7%
Centene	13.6%	8.8%	93.6%

The future of prior authorization

Beginning in 2026, Medicare Advantage insurers will publish certain prior authorization data on requests, denials, and appeals on their websites, but detailed data will not be reported. As the saying goes, "The devil is in the details." Knowing more specifics about prior authorization, such as the services that generate the most requests and the basis for denials, could allow beneficiaries, advocates and lawmakers to address and correct the process.

Although Original Medicare may have a smaller slate of services that require prior authorizations, it denies more authorizations and overturns fewer denials than Medicare Advantage plans on a percentage basis.

The financial state of the Medicare trust fund means that we are unlikely to see a rollback of this type of cost-control measure. The Hospital Insurance fund for Medicare Part A is in better shape than the Social Security trust fund, and is expected to be able to fully pay scheduled benefits until 2036. That leaves us less than 11 years to shore up its solvency of trust or grapple with a fund that can only pay for 89% of projected benefits.

Donna joined Kiplinger as a personal finance writer in 2023. She spent more than a decade as the contributing editor of J.K.Lasser's Your Income Tax Guide and edited state specific legal treatises at ALM Media. She has shared her expertise as a guest on Bloomberg, CNN, Fox, NPR, CNBC and many other media outlets around the nation. She is a graduate of Brooklyn Law School and the University at Buffalo.