Prior Authorization

CMS takes big steps to fix prior authorization in Medicare Advantage

Kevin B. O'Reilly , Senior News Editor

What’s the news: The AMA and nearly 120 physician organizations are strongly supporting proposed reforms of prior authorization in Medicare Advantage and the Medicare prescription drug benefit.

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The physician organizations sent a letter (PDF) to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure thanking her and urging the agency to finalize proposed reforms that target the inappropriate use of prior-authorization requirements by Medicare Advantage plans to delay, deny and disrupt the provision of medically necessary care to patients.

“Physicians appreciate the efforts of CMS to address the significant and multifaceted challenges that prior authorization requirements pose to Medicare beneficiaries and physicians,” said AMA President Jack Resneck Jr, MD. “We applaud CMS for listening to physicians, patients, federal inspectors, and many other stakeholders, and recognizing a vital need to rein in Medicare Advantage plans from placing excessive and unnecessary administrative obstacles between patients and evidence-based treatments.”

Among other things, CMS should finalize provisions requiring that Medicare Advantage plans:

  • Only use prior authorization to confirm diagnoses or other medical criteria and ensure the medical necessity of services. That is, prior authorization is not a tool to be used to delay or discourage care.
  • Give their beneficiaries access to the same items and services as they would under traditional Medicare. When no applicable coverage rule exists under traditional Medicare, plans must use current evidence from widely used treatment guidelines or clinical literature for internal clinical coverage criteria, which must then be made publicly available.
  • Establish a utilization-management committee to review their clinical coverage criteria and ensure consistency with traditional Medicare guidelines.
  • Not be allowed to deny care ordered by a contracted physician based on a particular provider type or setting, unless medical necessity criteria are not met.

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Reforms proposed by CMS must be implemented amid mounting evidence that Medicare Advantage plans are delaying or even preventing Medicare beneficiaries from getting optimal care, resulting in alarming effects on patient health.

Why it’s important: The most recent AMA survey (PDF) found that 93% of physicians reported care delays while waiting for health insurers to authorize necessary care. Meanwhile, 82% said patients abandon treatment due to authorization struggles with health insurers, and 34% of physicians reported that prior authorization led to a serious adverse event such as hospitalization, disability—or even death—for a patient in their care.

An investigation by the Department of Health and Human Services’ Office of the Inspector General found that Medicare Advantage plans improperly applied Medicare coverage rules to deny 13% of prior-authorization requests and 18% of payments, in some cases ignoring prior authorizations or other documentation necessary to support the payment. 

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Meanwhile, a Kaiser Family Foundation analysis found Medicare Advantage plans denied 2 million prior-authorization requests in whole or in part, representing about 6% of the 35 million requests submitted in 2021. While about 11% of denials were appealed, the vast majority—82%—of appealed denials were fully or partially overturned, raising serious concerns about the appropriateness of many of the initial denials.

“Waiting on a health plan to authorize necessary medical treatment is too often a hazard to patient health,” said Dr. Resneck. “To protect patient-centered care for the 28 million older Americans who rely on Medicare Advantage, physicians urge CMS to finalize the proposed policy changes and strengthen its prior authorization reform effort by extending its proposals to prescription drugs. We stand ready to continue our work with federal officials to remove obstacles and burdens that interfere with patient care.”

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CMS also should finalize proposals requiring that Medicare Advantage plans:

  • Keep prior-authorization approvals valid for the duration of the course of treatment.
  • Provide beneficiaries with a 90-day transition period where a prior authorization would remain valid for any ongoing course of treatment when beneficiaries change plans or enter Medicare Advantage.
  • Not be permitted to retroactively deny coverage for a lack of medical necessity after a prior-authorization approval.

The AMA and the other physician organizations also support CMS’ proposal to require that Medicare Part D “plans implement the National Council for Prescription Drug Programs Real Time Prescription Benefit standard.”

Doing so would enable physicians to check prior-authorization “requirements and drug formulary status at the point of prescribing in EHRs and support informed conversations with patients about therapy costs,” says the physician organizations’ letter to Brooks-LaSure, who addressed the 2023 AMA National Advocacy Conference last week.

Learn more: Fixing prior authorization is a critical component of the AMA Recovery Plan for America’s Physicians.

Prior authorization is overused and existing processes present significant administrative and clinical concerns. Find out how the AMA is tackling prior authorization with research, practice resources and reform resources.

Patients, physicians, and employers can learn more about reform efforts and share personal experiences with prior authorization at