Prior authorization policies varied widely among insurers

Privately administered Medicare Advantage programs have substantial differences in prior authorization policies but all require prior authorization extensively, a study found, particularly for physician-administered medications.

To measure and compare the scope of insurers' policies for prior authorization and then quantify differences across insurers, physician specialties, and clinical service categories, researchers conducted a cross-sectional analysis of five insurers serving 30,540,086 beneficiaries covered by privately administered Medicare Advantage plans in the U.S. in 2021. The main outcome measures were the proportions of government-administered traditional Medicare Part B spending and utilization that would have required prior authorization according to Medicare Advantage insurer rules. Results were published March 7 by BMJ.

The private insurers required prior authorizations for 944 to 2,971 of 14,130 clinical services (median, 1,899; weighted mean, 1,429), which made up17% to 33% of Part B spending (median, 28%; weighted, mean 23%) and 9% to 41% of Part B utilization (median, 22%; weighted mean, 18%). In addition, 40% of spending ($57 billion) and 48% of service utilization would have required prior authorization by at least one insurer, the study found, while 12% of spending and 6% of utilization would have required prior authorization by all insurers. Overall, 93% of Part B medication spending, or 74% of medication use, would have required prior authorization by at least one Medicare Advantage insurer. Hematology and oncology drugs represented the largest proportion of PA spending for all Medicare Advantage insurers, ranging from 27% to 34%. Wide variation was seen in prior authorization rates across specialties.

Despite limited consensus, all insurers required prior authorization extensively, particularly for physician-administered medications, the authors concluded. They wrote that there were substantial differences in coverage policies between government-administered and privately administered Medicare. For example, nearly half of traditional Medicare Part B spending and utilization would have been subjected to a prior authorization by at least one Medicare Advantage insurer. The Medicare Advantage insurer with the broadest prior authorization policy would encompass one in three dollars spent in Medicare Part B, while the Medicare Advantage insurer with the narrowest policy would encompass one in six dollars.

"Our study informs ongoing efforts to reform PA [prior authorization] and reduce its administrative burdens. Given the continued growth of privately administered Medicare insurance plans, PA is likely to remain an important feature of the Medicare programme," the authors wrote. "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."

Reducing administrative burden, including prior authorization, is a 2024 ACP Advocacy Priority.