How To Avoid Prior Authorization in Medical Billing

Avoiding Prior Authorization in Medical Billing

Medicare Advantage plans are extremely low cost – especially for those in good health who are unlikely to need care. They provide some excellent supplementary benefits, especially for those with special medical needs.  And because they bring all your care under one roof, they can also simplify case management and improve continuity of care.

But there are some disadvantages, too, including the frequent delays and outright denials of care thanks to the practice of prior authorization.

Prior authorization, once a rarely used tool designed to prevent the overuse of expensive medical interventions, is becoming a pervasive issue, especially in Medicare Advantage plans.

Originally intended to curb unnecessary tests and procedures, prior authorization has evolved into a standard cost-control measure for insurance companies. Unfortunately, this has led to significant delays in care and, in some cases, dire consequences for patients.

Challenges Accessing Recommended Treatments

A study published in October 2023, led by Dr. Fumiko Chino, who specializes in patient financial toxicity and quality of life, revealed that 22% of cancer patients were unable to access the recommended treatments due to delays or denials related to prior authorization. Additionally, 40% of the patients involved in the study described their experience with prior authorization as “bad” or “horrible.”

Doctors across the country are raising the alarm: What was once an occasional hurdle has turned into a daily challenge. 8 out of 10 doctors report that prior authorization demands have increased over the past five years, and physicians now grapple with an average of 45 prior authorization requests each week. These requests consume an estimated 14 man-hours per week—nearly two full business days—forcing many practices to employ staff whose sole responsibility is managing these bureaucratic demands.

The financial burden of this system is staggering: The extra man-hours and administrative costs in complying with onerous prior authorization rules costs an estimated $35 billion every year.

The impact on patient care is profound. According to recent reports, more than a third of doctors say that the system has devolved into one where denials occur without just cause, leaving patients with limited options: pay out of pocket, appeal the decision, or give up entirely. Alarmingly, 80% of patients choose the latter, too often forgoing or delaying necessary treatment, according to the Kaiser Family Foundation.

The burden of dealing with so many prior authorization demands from insurance companies has become so severe that many healthcare providers are taking their ball and going home. Many have dropped Medicare Advantage patients entirely. Why? It’s simply not worthwhile for them to spend so many man hours and physicians’ effort chasing down prior authorization requirements from Medicare Advantage

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What is Prior Authorization in Medical Billing?

In the Medicare context, prior authorization is a process through which your healthcare provider must obtain approval from Medicare or a private Medicare Advantage insurance company before performing a service or providing a medical product.

This process ensures that the service or item is medically necessary and falls under Medicare’s coverage guidelines before the item or service is provided.

How Prior Authorization Works

What Are The Odds?

Most prior authorizations go through with no problem––though they still represent a major administrative expense for care providers, who must spend hours and hours every week preparing even the successful ones to go through on the first attempt.

Medicare Advantage officials fielded over 46 million prior authorization requests in 2022 alone, according to the Kaiser Family Foundation. That’s an average of 1.7 requests per Medicare Advantage enrollee.

Of those 46 million requests, Medicare Advantage companies fully or partially denied more than 2 million of them.

Patients and their doctors appealed only about 9.9% of these denials, according to Department of Health figures. But out of those appeals, doctors and their patients prevailed 82% of the time.

That indicates that the government still gets a significant number of these denials flat wrong.

Services Typically Requiring Prior Authorization

Prior authorization may be required for certain medical services and products, including:

Importance of Prior Authorization

The prior authorization process helps manage costs and ensures that services provided to Medicare beneficiaries are necessary and appropriate.

But problems can arise when prior authorization. However, it can also lead to delays in receiving care if the approval process takes time. Beneficiaries and providers must be aware of which services require prior authorization to avoid unexpected costs and coverage issues.

Learn More: How To Get Out of Medicare Advantage Nightmares

Some Companies are More Stringent Than Others

Medicare Advantage companies vary widely when it comes to prior authorization requirements and denials.

According to Becker’s Payer Issues, an insurance industry journal, here is a ranking of major Medicare Advantage Carriers, and how they compare.

Prior Authorization Rates and Denials, Major Medicare Advantage Carriers 2022

Avoiding Prior Authorization Problems

So how can you avoid getting an initial denial, or quickly overcome a denial for a needed medical procedure, drug, or device? Here are some of our top recommendations for Medicare beneficiaries – especially if you’re enrolled in a Medicare Advantage plan.

1. Know Your Plan’s Requirements

Each Medicare Advantage plan has its own rules about which services, treatments, or medications require prior authorization.

It’s important to become familiar with them. You can find your plan’s prior authorization requirements details in your plan’s “Summary of Benefits” or “Evidence of Coverage” document, which you should review annually. Knowing these details can prevent unexpected denials and help you prepare in advance. If you’re unsure about what your plan covers, and whether your plan will require prior authorization for an anticipated treatment, medication, or medical advice, call your plan’s customer service and clarify.

If they tell you there will be a prior authorization requirement, try to get them to be as specific as possible about their requirements, and send you the information in writing, if possible.

This information could help guide your doctor in writing the needed letter of medical necessity (LMN) to get your planned treatment approved on the first try.

2. Communicate with Your Provider

Effective communication with your healthcare provider is key to avoiding prior authorization issues.

Make sure your doctor or specialist is aware that you’re enrolled in a Medicare Advantage plan and understand the need to obtain prior authorization for certain services. Providers often have staff dedicated to handling prior authorizations, but ensuring they are fully informed about your plan’s requirements can help prevent mistakes.

3. Submit Complete and Accurate Information

Medicare Advantage plans often deny requests due to missing or incomplete information, so double-check everything before submission.

Ensure that your documentation includes all required medical records, test results, and justifications for the requested service, device, or medication subject to prior authorization. . If the service or treatment is critical, make sure your provider clearly documents why it’s medically necessary, as this justification is often scrutinized during the review process.

4. Request Prior Authorization Early

Submit your request as early as possible, especially for non-emergency services.

Medicare Advantage plans can take time to process these requests, and any delays could affect your access to necessary care. By starting the process early, you give yourself and your healthcare provider ample time to respond to any issues or additional documentation requests from the plan.

Early submission is particularly important if you have a scheduled procedure, as delays can result in rescheduling or even cancellation.

5. Follow Up Regularly

Don’t assume your prior authorization request will be approved automatically.

You should regularly follow up with both your healthcare provider and your Medicare Advantage plan to check the status of your request. Being proactive can help catch any issues early, such as missing information or processing delays, and allows you to address them promptly.

Keep a record of your communications, including dates, names of representatives, and what was discussed, to help track the process and resolve any disputes.

6. Keep Your Own Records

Doctors’ offices are notorious for misplacing records and prior authorization requests.

Even if your doctor’s office staff keeps impeccable records, it can be difficult to get them to release records to other providers when you need it to happen.

It’s a good idea to keep detailed records of every interaction you have with your healthcare provider and your Medicare Advantage plan––especially where prior authorization is an issue.

Document every phone call, email, letter, and any other correspondence. Document the dates, times, and names of the people you spoke with, as well as the information provided. This documentation can be invaluable if you need to appeal a denial or if there are discrepancies in the information your provider and the plan have.

If you have a phone call, follow it up with an email summarizing your understanding of everything you and the other party discussed and have them confirm the information.

7. Understand Your Appeal Rights

If your prior authorization request is denied, you have the right to appeal the decision.

Read the full details on the Medicare and Medicare Advantage appeals process.

The first step is typically a “reconsideration” request, where your plan re-evaluates the decision. If this is also denied, you can escalate the appeal to an independent review entity. Be sure to submit all necessary documentation and adhere to all deadlines to increase your chances of a successful appeal.

Generally, you have just 60 days to initiate your appeal, according to Medicare officials.

If the medical justification is there, don’t hesitate to pursue the appeal. You have an excellent chance of prevailing, as more than 8 out of 10 appeals were successful in 2022, according to the Centers for Medicare and Medicaid Services.

8. Use Expedited Review for Urgent Cases

In urgent situations request an expedited review of your prior authorization request.

Medicare Advantage plans must respond to expedited requests within 72 hours.

To qualify for expedited review, your provider must indicate that the standard review time could seriously jeopardize your life, health, or ability to regain maximum function. If your request for expedited review is denied, the plan must process your request through the standard review process, which can take up to 14 days.

9. Switch To A Better Medicare Advantage Plan

If you don’t like the look of your Medicare Advantage plan’s prior authorization data or denial rates, or you’ve been having a bad experience with your current carrier, you can use your annual Medicare Advantage Open Enrollment Period to switch to a better one.

The Medicare fall enrollment period runs from October 15th through December 7th each year.

During that window of time, you can switch to a different Medicare Advantage plan without having to go through medical underwriting.

If you need to make a change, contact your Personal Benefits Manager with MedigapAdvisors. If you aren’t already a client, or you aren’t sure, you can make an appointment for a free consultation with one of our subject matter experts.

10. Consider Switching to Medigap Instead of Medicare Advantage

If you want to reduce your exposure to the risk of prior authorization hassles, consider dropping Medicare Advantage altogether, and switching to Original Medicare with a Medigap (Medicare Supplement) plan.

Medigap plans, which work alongside Original Medicare, typically do not require prior authorization for services covered by Medicare. This can make accessing care easier and faster.

You can switch from Medicare Advantage to Medigap at any time. However, if you switch to a Medigap plan outside of your initial Medigap open enrollment period, you may have to pass medical underwriting. That means the insurance company could deny you coverage based on your health history.

If you’re already experiencing prior authorization difficulties on your Medicare Advantage plan, it may be hard to get accepted to a new Medigap plan, due to medical underwriting. Don’t quit your current plan until you’ve been formally accepted into a new one!

Learn More: Can I Change or Switch My Medigap Plan?

11. Work with a Medicare Counselor or Advocate

Consider engaging a professional Medicare counselor or advocate.

Programs like the State Health Insurance Assistance Program (SHIP) offer free, personalized counseling to Medicare beneficiaries. These counselors can help you understand your plan’s prior authorization requirements, assist with the appeals process, and even suggest alternative options like Medigap. Having an advocate on your side can make the process less stressful and increase your chances of a successful outcome.

By taking these steps, you can reduce the risk of prior authorization denials, streamline the approval process, and ensure you get the care you need when you need it.

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Conclusion

Medicare Advantage plans can be a great solution. Especially if you’re on a tight budget every month, or you need the specialized services of a Medicare Advantage Special Needs Plan or the many supplemental benefits that Medicare Advantage plans frequently offer.

But you should be aware of the high potential out-of-pocket costs of Medicare Advantage plans in the event you need care, as well as the potential for delays and hassles arising from Medicare Advantage prior authorization requirements.

If this is a concern for you, be sure to take a close look at the eleven steps for minimizing or avoiding prior authorization problems.

Questions? Need to look at changing plans? We can help! Just make an appointment with a MedigapAdvisors Personal Benefits Manager.  It’s free, and we can walk you through your options, including alternative plans available in your area.

For Further Reading: Medicare Appeals|What are Managed Care Plans in Medicare?|Medicare 101: How Does Medicare Work?