2024 Surge in Medicare Prior Authorization Requests: Trends and Insights

In a recent report, the Kaiser Family Foundation (KFF) highlighted a surge in prior authorization requests, with nearly 53 million submissions in 2024 compared to approximately 50 million the prior year. This process, prevalent among Medicare Advantage (MA) enrollees, requires payer approval for certain services or medications before they are provided. Prior authorization is commonly applied to high-cost medical services like chemotherapy and skilled nursing facility stays to manage healthcare spending effectively.

AI-Driven Prior Authorization Delays and Regulatory Compliance

The process of prior authorization has sparked ongoing debate between insurance carriers and healthcare providers. While insurance companies argue it is essential for cost management, providers counter that it leads to delays in patient care and adversely affects health outcomes. This contention has garnered the attention of regulatory compliance officials and legislators, leading to vital policy developments.

In response, previous administrations prompted several major insurers to voluntarily refine their prior authorization protocols, removing some requirements altogether. Additionally, the Centers for Medicare & Medicaid Services (CMS) introduced a pilot program employing artificial intelligence to facilitate this process in traditional Medicare—a practice not previously common.

Insights into Insurance Industry Trends

In 2024, traditional Medicare enrollees submitted over 625,000 authorization requests, averaging 0.02 per beneficiary, according to the KFF report. A rising trend in requests appears within MA plans due to increasing enrollment. Carriers displayed variance in request numbers and outcomes, with fewer submissions per enrollee often linked to higher denial rates.

For example, UnitedHealth reported one request per enrollee with a denial rate of 12.8%, contrasting with Humana's 2.2 requests per enrollee at a 5.8% denial rate. Notably, appeals were rare, with CVS Health's appeal rate near 20% against Kaiser Foundation Health Plan's 1.6%. Successful appeals proved significant, with over half of decisions being overturned at Kaiser, and Centene reversing nearly 96% of appeals.

Regulatory Shifts and Future Implications

Efforts to enhance oversight are ongoing, as plans to boost Medicare Advantage audits and mitigate review backlogs through technological investments and the expansion of workforce in medical coding are in motion, according to CMS. Future legislative measures may surface, as suggested by Senator Chuck Grassley, indicating potential changes in healthcare policy that could impact the regulatory environment of the insurance industry.