Tell Me Again Why We’re Doing Prior Authorization?

Somehow, I end up writing a lot about prior authorization (PA). I’m not sure why. Maybe it’s because we’re pro market-based healthcare reform here at 4sight Health, and PA is an artificial market barrier between buyers (patients) and sellers (providers).

Whatever, as the kids would say, but here comes another blog post on PA that demonstrates what a huge waste of time and money PA really is.

The Kaiser Family Foundation earlier this month released an analysis of PA use by Medicare Advantage (MA) plans. You know MA plans. They’re the private Medicare health plans run by commercial insurers that exaggerate how sick their enrollees are to get paid more by the government, then downplay how sick their enrollees are to deny coverage of their medical care. It’s a really clever business model.

Anyway, Kaiser researchers analyzed claims data submitted to the Centers for Medicare and Medicaid Services by MA plans from 2019 through 2022. Here’s some of the more interesting things that Kaiser’s analysis found.

• MA plans made 46.2 million PA determinations in 2022 for their enrollees. That’s up nearly 27% from 36.5 million in 2021. But the jump clearly was from the boom in enrollment. More MA plan members, more PA determinations. The average number of PA requests per enrollee was 1.7 in 2022 — exactly the same as in 2019.
• Are MA plans getting tougher on PA determinations? Yes. In 2022, MA plans denied in whole or in part 7.4% of PA requests. That’s up from 5.8% in 2021. That’s a 27% increase in the denial rate.
• Are patients and providers getting more aggressive in appealing more adverse PA denials? No. In 2022, MA plans reconsidered 9.9% of their original PA determinations on appeal from patients and providers. That’s down from 10.6% in 2021.
• Are MA plans getting tougher on PA appeals from patients and providers? No. MA plans reversed in whole or in part 83.2% of appealed PA determinations. That’s actually up from 81.3% in 2021.

It all adds up to nothing other than a lot of effort only to end up in basically the same place. There are a lot of things like that in life, but I didn’t think PA was one of them.

So, I’ll stand by the statement I made in this blog post. Prior authorization is one of the biggest wastes of time and money in healthcare.

Thanks for reading.