How Emblem Health's CFO views prior authorization reform - MedCity News

There were 35.2 million prior authorization requests submitted to Medicare Advantage plans for health services in 2021, of which 2 million were denied, and analysis posted shows on Thursday.

Prior authorization is touted as a way to reduce health care costs, even though many providers say so delays care. To conduct the study, the Kaiser Family Foundation examined data from 515 master’s program contracts in 2021, representing 23 million master’s program enrollments (which is 87% of total master’s program enrollments).

The 35.2 million prior authorization requests equate to an average of about 1.5 requests per enrollee. The report found that the number of prior authorization requests varies widely by insurer. Kaiser Permanente had the lowest amount, with 0.3 claims per enrollee in 2021. Comparatively, Anthem had the highest amount, with 2.9 claims per enrollee.

About 33.2 million of the 35.2 million prior authorization requests were covered in full. Of the 2 million denied, 1.6 million were adverse decisions, meaning the claim was denied outright. The rest were only partially covered.

There were also differences in denials among insurers. CVS and Kaiser Permanente have a 12% denial rate, while Anthem and Humana have a 3% denial rate. Insurers with the most prior authorization requests denied a lower share of those requests, with the exception of Centene, the report found. Centene had 2.6 prior authorization requests per enrollee, but a denial rate of 10%.

Of the rejected applications, only 11% were appealed. CVS has the highest proportion of appealable denials (20%), compared to Kaiser Permanente at 1%. However, 82% of the total appeals resulted in the original refusal being overturned in whole or in part. The vast majority of most insurers’ denials were overturned after being appealed, with the exception of Kaiser Permanente, which had only 30% overturned.

“The high frequency of favorable outcomes on appeal raises questions about whether a greater proportion of initial decisions should have been upheld,” the KFF report said. “Alternatively, it may reflect initial requests that did not provide the required documentation. In both cases, medical care that is ordered by a health care provider and ultimately deemed necessary is potentially delayed due to the additional step of appealing the initial prior authorization decision, which can have a negative impact on the health of the beneficiaries.

The diversity among insurers shows the need for a better understanding of prior authorization, KFF added.

“This analysis suggests that Medicare Advantage insurers differ in their use of prior authorization,” the researchers stated. “Despite this variation, little is known about the implications for enrollees, including delays in treatment or differences in the criteria used to make coverage decisions.” As the number of Medicare beneficiaries enrolled in Medicare Advantage continues to grow, a better understanding of prior authorization and other cost containment and utilization management processes and programs will be important in evaluating the effects of these policies on utilization and quality, including variations in Medicare Advantage Plans and compared to traditional Medicare.”

Photo: Piotrekswat, Getty Images

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