Slowly but steadily, Marlene Nathanson was recovering. She had a stroke in November 2022 at her home in Minneapolis and spent a week in the hospital; Later, when she arrived at St. Paul's Episcopal Homes for rehabilitation, she could not walk. The weakness of her right arm and hand made her unable to feed herself and her speech remained somewhat slurred.
But after three weeks of physical, occupational and speech therapy, “she was making good progress,” said her husband, Iric Nathanson. “Her therapists were very encouraging.” Mrs. Nathanson, then 85, had begun getting around using a walker. Her arm was getting stronger and her speech was almost back to normal.
Then, one Wednesday afternoon, one of his therapists told the Nathansons that their Medicare Advantage plan had denied a request to cover additional care. “You must leave our facility by Friday,” the therapist said, apologetically.
Mr. Nathanson, then 82, felt anxious and angry. He didn't see how he could get home care aids and equipment in 48 hours. Furthermore, he said, “it didn't seem right that therapists and professionals couldn't determine the course of his treatment” and had to give in to the dictates of an insurance company. “But apparently it happens a lot.”
It does. Traditional Medicare rarely requires so-called prior authorization for services. But virtually all Medicare Advantage plans invoke it before agreeing to cover certain services, especially those that carry high prices, such as chemotherapy, hospital stays, nursing home care and home care.
“Most people run into this problem at some point if they stay in a Medicare Advantage plan,” said Jeannie Fuglesten Biniek, associate director of the Medicare Policy Program at KFF, the nonprofit health policy research organization . After years of strong growth, more than half of Medicare beneficiaries are now enrolled in Advantage plans, administered by private insurance companies.
In 2021, these plans received more than 35 million prior authorization requests, and about two million, or 6%, were denied in whole or in part, according to a KFF analysis.
“The rationale that plans use is that they want to prevent unnecessary, ill-advised or wasteful care,” said David Lipschutz, associate director of the nonprofit Center for Medicare Advocacy, who often hears complaints about prior authorization from both patients and of healthcare workers. But, he added, it is also “a cost containment measure”. Insurers can save money by limiting coverage; they also learned that few recipients challenge denials, even though they are entitled to them and usually win when they do.
Medicare Advantage plans are capitated, meaning they receive a fixed amount of public dollars per patient each month and can keep more of those dollars if prior authorization reduces expensive services. “Plans are making financial decisions rather than medical decisions,” Lipschutz said. (Medicare Advantage has never saved money for the Medicare program.)
Such criticisms have been circulating for years, reinforced by two reports from the Department of Health and Human Services' Office of Inspector General. In 2018, a report found “widespread and persistent” problems related to denial of prior authorization and payments to providers. He noted that Advantage plans overturned 75% of such denials when patients or providers appealed.
In 2022, a second Inspector General report revealed that 13% of denied prior authorization requests met Medicare coverage rules and were likely to be approved by traditional Medicare.
By then, according to a KFF analysis, the percentage of prior authorization denials overturned on appeal had reached 82%, raising the possibility that many “should not have been denied in the first place,” Dr. Biniek said.
Yet few denials – only about 11% – are challenged. Last year, a KFF study found that 35% of all Medicare beneficiaries didn't know they had the legal right to appeal; 7% mistakenly thought they did not have this right.
Additionally, the appeals process can be complex, a burden for those already struggling with health crises. “Insurers may deny more aggressively because they know people won't appeal,” Dr. Biniek added.
Faced with denials, patients may pay out of pocket for care that should be covered; if they can't afford it, some simply give up. “People are not getting the care they are entitled to,” Lipschutz said.
In response to general inspector reports and a growing wave of complaints, the federal Centers for Medicare and Medicaid Services has established two new rules to protect consumers and streamline prior authorization.
Among other actions, he clarified that Medicare Advantage plans must cover the same “medical necessary care” as traditional Medicare. “CMS will conduct oversight” to ensure compliance, the agency said in an email to the Times; its enforcement mechanisms include financial penalties.
Starting in 2026, another new rule will speed up the process, reducing the time insurers must respond to prior authorization requests to seven days from 14. (For “expedited requests,” it's 72 hours.) The rule will also require insurance plans to post prior authorization information (number of requests, review times, denials and appeals) on their websites. Next year, plans will need to adopt a new digital system so plans and providers can more efficiently share prior authorization review information.
Patients and advocacy groups have powerful allies in their efforts to reform prior authorization; Health workers also complained. The American Medical Association, the American Hospital Association, and other professional and trade groups have called for change; Congressional representatives from both parties have introduced legislation.
“Medicare Advantage takes us to the next level,” said Dr. Sandeep Singh, medical director of the Good Shepherd Rehabilitation Network in Allentown, Pennsylvania. “It has created such stress in the healthcare system.” A few years ago, his organization had an “insurance audit specialist” whose job was to handle prior authorization requests and appeals; now it employs three.
Prior authorization delayed hospitalizations, Dr. Singh said. He has steered patients away from specialty hospitals like Good Shepherd, with its intensive care programs, into standard nursing homes or home care, he added, where patients receive fewer hours of therapy and face higher rates of relapse. -hospitalisation. It takes away time that staff would prefer to dedicate to patient care.
On a recent weekend, Dr. Singh spent two hours coordinating and making an appeal for a patient with spinal cord damage and brain trauma. After 19 days at Good Shepherd, he “has come a long way, but she can't safely stay home alone,” he said. Yet her insurer “was telling us to push her out now”. He instead decided to extend his stay while the prior authorization appeals proceed. “Unfortunately we will have to absorb the costs” – about $1,800 a day, he said.
Will the new Medicare rules make a difference? So far at Good Shepherd, “we continue to see the same level of resistance” from Advantage plans, Dr. Singh said.
Mr. Lipschutz, of the Center for Medicare Advocacy, said: “It's clear the intent is there, but the jury is still out on whether it works.”
“It's about enforcement,” he said. However, she highlighted a lesson from the researchers: It's worth appealing.
Generally. In early 2022, Mr. Nathanson received a diagnosis of prostate cancer. His oncologist ordered a specialized MRI; his Advantage plan said no. But her doctor contacted the insurer and, after some back and forth, agreed to cover the ultrasound. Mr. Nathanson is in remission, although he is still exasperated about the two- to three-week delay in his treatment.
However, an appeal for further rehabilitation at Episcopal Homes for Mrs Nathanson did not overturn their insurer's refusal. She stayed for two more days, which cost the couple $1,000 out of pocket; they felt lucky to be able to pay for it.
After breaking her hip last fall, Ms. Nathanson now lives in Episcopal Homes. She also resents the fact that her insurer takes precedence over her healthcare providers. “I wish I could stay with them longer,” she said in an email. “But I had to go home before I was ready.”