Amid Rising Complaints About Prior Authorization Under Medicare Advantage, New Rule Leaves Gaps

For all the divisions in Congress, there are some areas of bipartisan agreement. One emerging in recent years is the need to reform prior authorization, as lawmakers hear about problems affecting patients and providers alike in Medicare Advantage (MA), which now serves more than half of the nation’s seniors in a Medicare program.

Joseph Alvarnas, MD | Image credit: City of Hope

Under prior authorization, a patient cannot receive a prescription or service without health plan approval. Insurers insist this is an essential tool to cut wasteful health care spending, but during hearings last year, members of Congress saw things differently. Congressional Progressive Caucus Leader Representative Pramila Jayapal (D, Washington) told Politico that “it has turned into a process of basically just stopping people from getting care,” whereas conversative Senator James Lankford (R, Oklahoma) shared that some hospitals in his state no longer accept MA because they “can’t afford the constant chasing from all the denials.”¹

Complaints to Congress are reflected in data: A November 2023 survey by the Medical Group Management Association reported that 89.4% of respondents found prior authorization requirements “very or extremely burdensome.”² An October 2023 study led by Fumiko Chino, MD, an expert on patient financial toxicity and quality of life, found that 22% of patients with cancer did not receive recommended care due to prior authorization delays or denials, with 40% of patients rating the experience “bad” or “horrible.”³

So far, reform efforts have brought mixed results. Starting last fall, new CMS guidance governed Medicare marketing in response to numerous complaints, but some believe legislation is needed to end abuses.⁴ Although a new CMS rule will require timely decisions in several areas, it does not address denials for drugs, which is an area of serious concern to patients with cancer.

The Rise of Medicare Advantage
The origins of MA date to 1982, with the passage of the Tax Equity and Financial Responsibility Act.⁵ The administrative rules that led to the operationalization of a risk-based model for Medicare Part C were subsequently completed in 1985. The resulting program was called Medicare+Choice (M+C). This innovative model provided a mechanism through which commercial payers could enter contracts with the CMS. The agency would pay participating plans a monthly, risk-adjusted, per-member per-month payment for which the plan would accept full financial risk for the enrolled member. This new model had several potential benefits for both CMS and Medicare beneficiaries: CMS could pass financial risk on to commercial payers, whereas commercial payers could offer augmented benefit packages⁶ that included options such as coverage for dental, vision, and hearing benefits that were otherwise unavailable under the Medicare traditional model.

In 2003, M+C was amended to increase consumer choice and to integrate the newly adopted Part D prescription drug coverage into benefit packages. Delivery models also evolved to include both health maintenance organization and preferred provider organization networks. This revised version of Medicare Part D was renamed Medicare Advantage.⁷ Since its inception, MA membership has undergone extraordinary growth. Data from KFF indicate that there are now more than 3950 MA plans available for member enrollment. Just in the past few years, Medicare beneficiaries have flocked to MA plans in unprecedented numbers.⁸ As of 2023, more than 51% of all current Medicare beneficiaries are enrolled in MA plans; this represents 33 million members.⁹

Aggressive Marketing Fuels Enrollment
Much of this growth has occurred due to an annual pattern of aggressive sales and marketing directed toward potential enrollees. In 2023, KFF noted that during the 2022 open enrollment period (October through December), there were 643,852 TV ads about Medicare on English language media outlets, along with 40,000 Spanish language advertisements, of which 86% promoted an MA plan.¹⁰ Many of these ads have come under fire for promoting misleading messages; ads typically present active seniors and rarely highlight the needs of disabled seniors who might benefit from traditional Medicare. KFF notes that “a large majority of [MA] airings sponsored by brokers and other third-party entities [83%] featured a ‘Medicare’ hotline other than the 1-800-Medicare line run by the federal government.”⁶

The authors further state that “more than 50,000 [MA] ad airings used language that suggested people with Medicare are ‘missing out’ on important benefits if they are not enrolled in a [MA] plan. Additionally, some ads tell viewers that they are ‘entitled’ to receive supplemental benefits or cost savings offered by some [MA] plans.”¹⁰

These aggressive marketing campaigns provoked complaints from both consumers and the National Association of Insurance Commissioners, who have called on Congress to pass legislation allowing regulation to rein in the deceptive claims found in some ads.¹¹

As MA Enrollment Climbs, So Do Denials
As beneficiaries’ care experiences are challenged by delays in the authorization process and patients are excluded from accessing care at the centers best suited to their needs because of narrow provider networks, MA plans are under growing scrutiny. A 2022 report from the Department of Health and Human Services Office of Inspector General found that MA organizations (MAOs) “denied prior authorization and payment requests that met Medicare coverage rules by using MAO clinical criteria that are not contained in Medicare coverage rules, requesting unnecessary documentation, and making manual review errors and system errors.” The report further noted that 13% of denied claims would have been paid by traditional Medicare and that 18% of payment requests that were denied would have met Medicare traditional coverage rules and did, in fact, meet MAO billing rules.¹² Up to 99% of all MA beneficiaries receive their care through a model that requires authorization prior to service delivery. A KFF analysis found that MA plans denied 2 million of 35 million prior authorization requests submitted in 2021, or 6% of all claims. Of special concern, the KFF report found that only 11% of these denials were appealed.¹³

The report further finds that when an appeal was attempted, 82% of the denials were revered reversed.¹³ A survey performed by the Commonwealth Fund found that MA enrollees reported a higher rate of delays in care due to the prior authorization process and frequently had higher levels of cost sharing. In a summary of the survey, the authors of the report noted that “larger shares of beneficiaries in MA plans than in traditional Medicare reported they experienced delays in getting care because of the need to obtain prior approval [22% vs 13%] and couldn’t afford care because of co-payments or deductibles [12% vs 7%].”¹⁴

In 2021, these data and numerous patient stories relating to remarkable disruptions in the access to care created a fever pitch around MA. This was exacerbated by the growing costs of the MA program; some estimates put the cost of MA at $140 billion above traditional Medicare per year.⁹ In turn, this provoked Congress to step in to address the rise in care denials. The Improving Seniors’ Timely Access to Care Act of 2021 (HR 3173) was introduced, which would create new requirements and patient protections, including the following:

• MA plans must establish an electronic prior authorization program that meets specified standards, including the ability to provide real-time decisions in response to requests for items and services that are routinely approved;
• MA plans must annually publish specified prior authorization information, including the percentage of requests approved and the average response time; and
• MA plans must meet other standards, as set by CMS, that relate to the quality and timeliness of prior authorization determinations.15

In September 2022, the Congressional Budget Office (CBO) estimated the financial impact of this legislation by noting the legislation would likely increase patient access and utilization of services, and that this would ultimately lead to higher payments to plans by the federal government. The CBO estimated the overall financial impact at $16.245 billion in increased government payments between 2022 and 2032 due to higher participation bids by health plans.¹⁶ The American Medical Association pronounced the CBO estimate “flawed,” but the CBO analysis caused reform advocates to look toward the CMS rulemaking for near-term relief.¹⁷

On January 17, 2024, CMS released the Interoperability and Prior Authorization Final Rule; the rule was published and takes effect April 8, 2024. The rule addresses several issues that are fundamental to addressing delays in prior authorization and inappropriate denials by MA plans. The rule shortens the time for urgent prior authorization decisions to 72 hours while tightening the time line for completing nonurgent requests to 7 days. In addition, plans must provide a clear and specific rationale for the denial. The rule also establishes additional levels of transparency around the prior authorization process and will establish models of decision-making that will require physician participation in process.^18,19 Key elements of the rule take effect January 1, 2026.

What About Cancer Drugs?

The new rule leaves a significant gap of interest to patients with cancer—it does not cover oncology drugs, which is a core element of cancer care. The Federal Register notes that “commenters stated that by failing to include administered drugs throughout the proposed rule, CMS is failing to address the biggest culprit of delay to timely care and administrative burden for patients [with cancer]. Commenters described barriers to access for prescriptions for specialty drugs, cancer drugs, and certain drugs for chronic conditions that require ongoing reauthorizations.” CMS’ response states that it will separately address prior authorization for drugs.¹⁸

Critics cite a recent study in the Journal of Clinical Oncology that found when new prior authorization rules are applied to an existing prescription for an established oral cancer therapy, the likelihood of discontinuation increases and the average increased time to the next 30-day fill increased by 9.7 days.²⁰ Instead, advocacy groups prefer “gold card” systems, such as those adopted in Texas and Louisiana, that require automatic refills if the provider has an established record of following clinical guidelines.²¹

When it comes to treating patients with cancer, urgency matters. For many patients, time is as great an enemy as their malignancy; with each delay, a potentially lifesaving opportunity or option may be irrevocably lost. Thus, prior authorization is a first step toward more patient-centered care. Although the new rule represents an important first step in improving health plan accountability and patient protections for Medicare Advantage beneficiaries, there is still a long way to go. In addition to the need to address prior authorization of cancer therapies, challenges of the narrow network model used by many MA plans can lead patients to receive their surgical cancer care at centers that are ill-suited to meet their needs.²² Reform efforts for MA remain in their infancy. Over the coming years, there remains a significant need for continued scrutiny and iterative improvements to the program.

Author Information

Joseph Alvarnas, MD, is vice president for government affairs, City of Hope, and chief clinical adviser Access Hope. He is editor-in-chief, Evidence-Based Oncology.

Mary Caffrey contributed to this report.

References
1. King R. ‘It was stunning’: bipartisan anger aimed at Medicare Advantage care denials. Politico. November 24, 2023. Accessed March 10, 2024. https://www.politico.com/news/2023/11/24/medicare-advantage-plans-congress-00128353
2. Medical Group Management Association. Annual Regulatory Burden Report. November 2023. Accessed March 10, 2024. https://www.mgma.com/getkaiasset/423e0368-b834-467c-a6c3-53f4d759a490/2023%20MGMA%20Regulatory%20Burden%20Report%20FINAL.pdf
3. Chino F, Baez A, Elkins IB, Aviki EM, Ghazal LV, Thom B. The patient experience of prior authorization for cancer care. JAMA Netw Open. 2023;6(10):e2338182. doi:10.1001/jamanetworkopen.2023.38182
4. CMS finalizes new Medicare marketing requirements. Sidley Austin LLP. April 12, 2023. Accessed March 10, 2024. https://www.sidley.com/en/insights/newsupdates/2023/04/us-cms-finalizes-new-medicare-marketing-requirements
5. Tax Equity and Fiscal Responsibility Act of 1982, HR 4961, 97th Cong (1981). March 9, 2024. https://www.congress.gov/bill/97th-congress/house-bill/4961
6. McGuire TG, Newhouse JP, Sinaiko AD. An economic history of Medicare Part C. Milbank Q. 2011;89(2):289-332. doi:10.1111/j.1468-0009.2011.00629.x
7. Health plans - general information. CMS. Updated March 5, 2024. Accessed March 10, 2024. https://go.cms.gov/49OOZtg
8. Freed M, Damico A, Fuglesten Biniek JF, Neuman T. Medicare Advantage 2024 spotlight: first look. KFF. November 15, 2023. Accessed March 10, 2024. https://www.kff.org/medicare/issue-brief/medicare-advantage-2024-spotlight-first-look/
9. Cunningham-Cook M. Between you and your doctor: how Medicare Advantage care denials affect patients. American Prospect. March 6, 2024. Accessed March 9, 2024. https://prospect.org/health/2024-03-06-how-medicare-advantage-care-denials-affect-patients/
10. Biniek JF, Cottrill A, Sroczynski N, et al. How health insurers and brokers are marketing Medicare. KFF. September 20, 2023. Accessed March 10, 2024. https://www.kff.org/report-section/how-health-insurers-and-brokers-are-marketing-medicare-report/#85-percent-of-airings
11. Letter to Senate leadership. National Association of Insurance Commissioners. May 5, 2022. Accessed May 10, 2023. https://content.naic.org/sites/default/files/State%20MA%20Marketing%20Authority%20Senate%20Letter%20.pdf
12. Grimm CA. Some Medicare Advantage organization denials of prior authorization requests raise concerns about beneficiary access to medically necessary care. US Department of Health and Human Services Office of the Inspector General. April 2022. https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf
13. Biniek JF, Sroczynski N. Over 35 million prior authorization requests were submitted to Medicare Advantage plans in 2021. KFF. February 2, 2023. Accessed March 10, 2024. https://www.kff.org/medicare/issue-brief/over-35-million-prior-authorization-requests-were-submitted-to-medicare-advantage-plans-in-2021/
14. Jacobson G, Leonard F, Sciupac E, Rapoport R. What do Medicare beneficiaries value about their coverage? Commonwealth Fund. February 22, 2024. Accessed March 10, 2024. https://www.commonwealthfund.org/publications/surveys/2024/feb/what-do-medicare-beneficiaries-value-about-their-coverage
15. Improving Seniors’ Timely Access to Care Act of 2021, HR 3173, 117th Cong (2021). March 9, 2024. https://www.congress.gov/bill/117th-congress/house-bill/3173
16. CBO’s estimate of the statutory pay-as-you-go effects of H.R. 3173, Improving Seniors’ Timely Access to Care Act of 2021. Congressional Budget Office. September 14, 2022. Accessed March 9, 2024. https://www.cbo.gov/system/files/2022-09/hr3173_0.pdf
17. O’Reilly KB. Big step forward in Congress to fix prior authorization. American Medical Association. August 2, 2023. Accessed March 10, 2024. https://www.ama-assn.org/practice-management/prior-authorization/big-step-forward-congress-fix-prior-authorization
18. CMS. Medicare and Medicaid Programs; Patient Protection and Affordable Care Act; Advancing Interoperability and Improving Prior Authorization Processes for Medicare Advantage Organizations, Medicaid Managed Care Plans, State Medicaid Agencies, Children’s Health Insurance Program (CHIP) Agencies and CHIP Managed Care Entities, Issuers of Qualified Health Plans on the Federally-Facilitated Exchanges, Merit-based Incentive Payment System (MIPS) Eligible Clinicians, and Eligible Hospitals and Critical Access Hospitals in the Medicare Promoting Interoperability Program. Federal Register. 2024. Accessed March 9, 2023. https://www.federalregister.gov/documents/2024/02/08/2024-00895/medicare-and-medicaid-programs-patient-protection-and-affordable-care-act-advancing-interoperability
19. Feds finalize significant prior auth reform regulation. California Medical Association. January 23, 2024. Accessed March 10, 2024. https://www.cmadocs.org/newsroom/news/view/ArticleId/50424/Feds-finalize-significant-prior-auth-reform-regulation-160
20. Kyle MA, Keating NL. Prior authorization and association with delayed or discontinued prescription fills. J Clin Oncol. 2024;42(8):951-960. doi:10.1200/JCO.23.01693
21. Tallent A. Prior authorization rule won’t fix oncology drug problem. OBR Oncology. January 30, 2024. Accessed March 10, 2024. https://www.obroncology.com/article/prior-authorization-rule-wont-fix-oncology-drug-problem
22. Raoof M, Ituarte PHG, Haye S, et al. Medicare Advantage: a disadvantage for complex cancer surgery patients. J Clin Oncol. 2022;41(6):1239-1249. doi:10.1200/JCO.21.01359