Insurers Release Prior Authorization Denial Rates

Most insurers have been compliant with public reporting requirements for prior authorization issued by the CMS, but whether the increased transparency actually helps patients is still an open question.

In keeping with the CMS Interoperability and Prior Authorization Final Rule, a subset of insurers are required, on an annual basis, to publicly share certain prior authorization metrics. The rule applies to Medicare Advantage plans, state Medicaid and Children’s Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, and plans on the Affordable Care Act exchanges. It specifically directs plans to publish approval rates, denial rates, and the turnaround times for decisions, as well as the outcomes of appeals for medical items and services, excluding drugs, on their websites.

State of Play

As of April 1, these metrics were available for the three largest Medicare Advantage insurers, UnitedHealthcare, Humana, and Aetna.

For UnitedHealthcare Medicare Advantage plans, only 2.5% of claims require prior authorization, excluding certain requests, such as those for prescription drugs or transitions to post-acute care; 95.4% of such requests are approved, including after having been appealed. The average time to a decision is 24 hours.

“As we’ve shared in the past, prior authorization remains an important clinical checkpoint that helps ensure care is covered, evidence‑based, and safe,” a UnitedHealthcare spokesperson said, pointing out that the company also published data on commercial, individual, and family plan metrics voluntarily.

Prior authorization in Medicare Advantage has grown in recent years — from 37 million requests in 2019 to more than 46 million in 2022 — with nearly 53 million determinations by 2024.

Nearly all Medicare Advantage beneficiaries are enrolled in plans that require prior authorization for some services, often pricier ones, such as inpatient hospital stays or chemotherapy. By contrast, prior authorization is far less common in traditional Medicare.

“Health plans have made meaningful initial progress in streamlining the use of prior authorization, with more advancements underway to enable greater standardization, so that the vast majority of patients can get real-time answers when their provider submits requests electronically,” said a spokesperson for AHIP (formerly America’s Health Insurance Plans).

“Now we need our provider partners to integrate this technology into their [electronic health records] and within their workflow so we can move beyond fax machines and bring healthcare technology into the 21st century,” added the spokesperson, who noted that almost half of requests are currently submitted by phone, fax, or mail.

Compliance, Not Clarity

Insurers are complying with the requirements of the rule, Jeannie Fuglesten Biniek, PhD, associate director of the Program on Medicare Policy at KFF in Washington, D.C., told MedPage Today. “I think there are questions about whether what is required is sufficient to meet the aims of improving transparency,” she said.

One challenge is that there’s nothing to link approval or denial rates to specific services.

A patient with diabetes, for example, can determine whether their supplies are subject to prior authorization, but not much else, she noted. “They can’t see whether the plan routinely approves those requests, or if it has a higher denial rate, or how long it takes for those particular requests to be approved, since everything here is an average or aggregated to a very high level.”

In a KFF Quick Takes post, Kaye Pestaina, a vice president at KFF where she directs its program on patient and consumer protections, zeroed in on UnitedHealthcare’s reporting, highlighting approval rates of about 80% for HealthCare.gov plans, nearly 92% in Medicaid/CHIP, and 95% in Medicare Advantage.

“Because the information is aggregated across all items and services (except prescription drugs), with no breakdown about what types of services are being approved and denied, these statistics provide limited insight into insurers’ prior authorization practices,” she wrote.

Fuglesten Biniek said it’s also “quite difficult” for potential enrollees to even locate the data, noting that she was only able to find the reports using very specific search terms in Google. To find the right data for their plan, enrollees would need to know what contract the plan they’re enrolled in is part of, which, she noted, “is knowable, but it’s not obvious.”

For example, one insurer’s website includes more than 20 individual documents detailing Medicare Advantage prior authorization rates, each one representing a single contract. Each contract can include multiple plans, some of which encompass multiple counties, or even states, Fuglesten Biniek said.

To make comparisons, an enrollee would have to locate the right contract on each individual insurer’s website, and even then some enrollment-weighted numbers and high-level math would be necessary, she pointed out.

According to Pestaina, another shortcoming of CMS transparency requirements is that because insurers aren’t required to share why requests are denied, there is no way to gauge whether a denial is appropriate.

Certain states, namely Washington and Massachusetts, offer more detailed data on prior authorization, including metrics by service category, and even prescription drugs (which the CMS rule excluded). Pestaina suggested that those states’ work “could serve as models for more useful data collection.”

While it would take some effort on CMS’s part, Fuglesten Biniek said having a single database and a “plan-specific prior authorization rate for certain common services” available for download on the agency’s website would go a long way in helping enrollees to understand and to compare insurers’ behavior on prior authorization.