Health insurance companies denied “at least 1 in 8 standard requests” when prior authorization of treatments and procedures was required across the largest categories of government-subsidized health insurance last year.
A new analysis by KFF shows that insurers denied between 12% and 18% of prior authorization requests last year for Americans enrolled in either privatized Medicare Advantage coverage for older adults, Medicaid coverage for poor Americans or individual coverage under the Affordable Care Act, also known as Obamacare.
The report comes at a time health insurance business practices are under fire from patients, physicians, lawmakers and regulators at both the state and federal level to reduce or get rid of prior authorization, the process of insurers reviewing hospital admissions and medications.
“Medicare Advantage insurers denied 12% of standard prior authorization requests, Medicaid managed care insurers denied 14%, and ACA Marketplace insurers denied 18%,” KFF said in its analysis of data that insurers were required to publish earlier this year under new regulations from the Centers for Medicare & Medicaid Services.
“Among Medicare Advantage insurers, the denial rate for standard requests ranged from 5% for Elevance to 17% for United Health Group,” KFF said in its analysis. “In Medicaid managed care, the range went from 2% for L.A. Care Health Plan to 23% for Independence Health Group. In the ACA Marketplace, the range went from 3% for GuideWell to 25% for Centene.”
But many of these health insurers have since made reforms to their prior authorization and in some cases have eliminated it altogether since last year. And a year ago, the biggest names in health insurance, including Centene, Cigna, CVS Health’s Aetna, UnitedHealth Group’s UnitedHealthcare and Humana were among more than 50 health insurers committing to reducing prior authorization along with simplifying business practices in general.
The KFF report said prior authorization denials are rarely appealed, “but when they are, a considerable share are overturned,” the analysis showed. “Sixty-seven percent of prior authorization denials were overturned upon appeal in Medicare Advantage, 47% were overturned upon appeal in Medicaid managed care, and 43% were overturned in the ACA federally facilitated Marketplace.”