Widespread PA Use in Medicare Advantage Restricts Health Care Utilization


Researchers analyzed the prior authorization requirements of private insurers applied to various Medicare services.

A large portion of Medicare Part B fee-for-service spending and utilization would have been subject to prior authorization (PA) based on the PA policies of Medicare Advantage insurers, according to a new study.1 The findings support the authors’ previous research that PA is widespread within the private insurance landscape.2

They highlighted that PA is a controversial tool that insurers use to assess the necessity of a service before it is approved and provided. “As with other utilization management techniques used by insurers, PA could serve to curb wasteful spending if it discourages care that is of low value,” the authors wrote.1 While PA has been used since the 1980s, it has recently garnered more scrutiny, they added. “Provider groups, scholars, and policy makers have expressed concerns that PA is administratively burdensome and can discourage appropriate care.”

Key Takeaways

  • Researchers analyzed how prior authorization (PA) would be applied to Medicare services.
  • They found that PA is significantly widespread within the private insurance sector serving Medicare.
  • They suggested that PA policies should be targeted at services considered to be low-value care.

The researchers detailed the complexity of valuing specific types of clinical care and found that insurers can egregiously apply PA to a slew of Medicare services, whether they are low-value or high-value, much to the dismay of clinicians and patients.

In cross-sectional analyses aiming to measure the scope of PA, researchers assessed the differences in PA policies between private insurers and government-administered insurance by analyzing Medicare Part B spending and utilization if it followed the same PA requirements that Medicare Advantage follows.1,2

prior authorization form covered in pills

Researchers assessed the differences in PA policies between private insurers and government-administered insurance. | image credit: Maksim Shchur / stock.adobe.com

PA Utilization Across Multiple Private Insurers

Gupta et al’s study applied PA policies of the top 5 Medicare Advantage insurers to utilization and spending patterns in Medicare Part B. The 5 insurers analyzed were UnitedHealthcare, Humana, CVS Health, Centene/Wellcare, and Cigna.

“In this cross-sectional study, the coverage policies of private insurers in the US would have required PA for a large portion of fee-for-service Medicare Part B spending, particularly spending on medications,” wrote the authors.1

Of 14,130 Medicare Part B services, insurers required PA for 944 to 2971 services, at least 1 insurer required PA for 4044 services, and all insurers required PA for 239 services.1 Overall, these statistics account for 17% to 33% of Part B spending and 9% to 41% of utilization.

“We found widespread use of PA for medical services in Medicare Advantage, which is in marked contrast to traditional Medicare. These findings add to previous literature suggesting that Medicare Advantage reduces healthcare use relative to traditional Medicare,” they continued.1

With PA requirements high across the board, the issue with its administration lies in insurers’ inability to define low-value care that should not require PA.

“There was little consensus among insurers, however, about which medical services required PA. This lack of uniformity suggests it can be challenging to identify and discourage some low-value services,” they continued.1

Furthermore, the authors concluded, “the results may inform ongoing efforts to focus PA more effectively on low-value services and reduce administrative burdens for clinicians and patients.”

READ MORE: Understanding Prior Authorization to Ensure Timely Medication Access

Applying a Private Insurer’s PA Policies to Medicare Part B Services

To capture a larger scope of PA across Medicare services, researchers from a previous study applied Medicare Advantage PA policies to that of Medicare Part B spending and utilization. They used 2017 PA data from a single insurer, Aetna.

Of nearly 6.5 million beneficiaries, 41% received at least 1 service a year that would have required PA under Medicare Advantage.2

Furthermore, the mean number of annual services requiring PA was 2.2 per beneficiary, equaling a mean annual spend of $1661 for each beneficiary; also encompassing 25% of total Part B spending.2

Finally, among all beneficiaries who received at least 1 service requiring PA, the mean number of services per beneficiary was 5.3, corresponding to $4027 in Part B spending for each beneficiary.2

“Explicitly focusing on the clinical appropriateness of medical services can allow insurers to manage care with more clinical nuance than blunt cost-sharing tools or blanket restrictions on service coverage,” wrote the authors.2

With PA use being widespread as of the past few years, Gupta et al further suggested that these services should highlight low-value care.

“Given the continued growth of privately administered Medicare insurance plans, PA is likely to remain an important feature of the Medicare program. This aspect of managed care may be improved if PA policies can be narrowly targeted at the specific services most likely to represent low value care,” they concluded.1

READ MORE: Congress Members Urge Biden to Address Prior Authorizations in Medicare Advantage

1. Gupta R, Fein J, Newhouse JP, Schwartz AL. Comparison of prior authorization across insurers: cross sectional evidence from Medicare Advantage. BMJ. 2024;384:e077797. Published March 7, 2024. doi:10.1136/bmj-2023-077797
2. Schwartz AL, Brennan TA, Verbrugge DJ, Newhouse JP. Measuring the scope of prior authorization policies: applying private insurer rules to Medicare Part B. JAMA Health Forum. 2021;2(5):e210859. doi:10.1001/jamahealthforum.2021.0859
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