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It does. Traditional Medicare rarely requires so-called prior authorization for services. But virtually all Medicare Advantage plans invoke it before agreeing to cover certain services, especially those that carry high prices, such as chemotherapy, hospital stays, nursing home care and home care.
“Most people run into this problem at some point if they stay in a Medicare Advantage plan,” said Jeannie Fuglesten Biniek, associate director of the Medicare Policy Program at KFF, the nonprofit health policy research organization . After years of strong growth, more than half of Medicare beneficiaries are now enrolled in Advantage plans, administered by private insurance companies.
In 2021, these plans received more than 35 million prior authorization requests, and about two million, or 6%, were denied in whole or in part, according to a KFF analysis.
“The rationale that plans use is that they want to prevent unnecessary, ill-advised or wasteful care,” said David Lipschutz, associate director of the nonprofit Center for Medicare Advocacy, who often hears complaints about prior authorization from both patients and of healthcare workers. But, he added, it is also “a cost containment measure”. Insurers can save money by limiting coverage; they also learned that few recipients challenge denials, even though they are entitled to them and usually win when they do.
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