Medicare Advantage Prior Authorization Denials for Post-Acute Care Are Rarely Overturned

By Jermaine Piper, MPH, and Lane Koenig, PhD
June 11, 2024

Medicare Advantage (MA) plans limit use of Medicare-covered services, in part, through pre-service (prior) authorization requirements for post-acute care (PAC), including care provided by a skilled nursing facility (SNF), inpatient rehabilitation facility (IRF), or long-term acute care hospital (LTCH). If an MA plan denies a request for PAC, MA enrollees and their healthcare providers can challenge the denial by appealing the denial decision to the MA plan (requesting a redetermination). If the MA plan again denies the prior authorization request, the appeal is automatically sent to the CMS’ Independent Review Entity (IRE) as a Level 2 appeal.

In this blog, we report trends in Medicare’s IRE decisions related to institutional post-acute care (SNF, IRF, and LTCH). We examined IRE decisions between 2020 and quarter 1 (Q1) of 2024 using data from the Medicare Parts C & D IRE Decision Database.

IRE Determinations for Post-Acute Care. In Table 1, we document that very few appeals were overturned by the IRE for LTCH, SNF, and IRF care.  The overturn rate was exceptionally low for LTCHs, less than 1 percent.

Table 1. Post-Acute Care and IRE Determinations (Between January 1, 2020 and March 31, 2024)

Source: KNG Health analysis of Medicare Parts C & D IRE Decision Database. *IRE Appeals Upheld also includes cases that were determined to be partially favorable.

Changes in Prior Authorization Requirements and Early Assessment of Impact on IRE Determinations. In April 2023, CMS released a rule that clarified clinical requirements to ensure beneficiaries in MA plans receive equal access to treatment they would be eligible for under Traditional Medicare (TM). Although CMS used the rule to clarify existing prior authorization requests, many of the provisions introduced in the rule were effective beginning January 1, 2024. The rule brings forward changes to medical necessity determinations made by MA plans to align with TM coverage guidelines and minimize disruptions in continuity of care.

Given the CMS prior-authorization requirements for MA plans, an early assessment can be conducted to determine if this resulted in any change in rates of the IRE overturning appeal denials. We observe an increase in IRE overturn rates for 2024 Q1 for LTCHs (Figure 1). However, the opposite is true for IRFs and SNFs who saw a decrease in appeals overturned, although overturn rates varied over the time period for IRFs and SNFs. As new appeals data is released in the decision database, further analysis would be required to assess whether the changes seen in IRE overturn rates persist and if there are shifts in reasonings as to why IREs might uphold MA plan denials.

Implications of Prior Authorization Denials in Accessing Care. A 2022 HHS OIG report found that MA plans denied prior authorization and payments for services that met TM coverage rules and would otherwise be covered by TM. In the report, stays in PAC facilities were one of the most commonly denied types of service by MA plans. There is a lack of transparency in the information that MA plans send to IREs for the appeals process as well as the criteria used by the IRE to makes its determinations. CMS’s clarification of MA prior authorization requirements–specifically stating that MA plans cannot use criteria more restrictive than used in TM–is an important first step in standardizing medical necessity decisions. However, there is a continued need for guidance and transparency in prior authorization decisions and redeterminations by the IRE regarding PAC. One limitation of our analysis is that the Medicare Part C & D IRE database only provides information on Level 2 appeals. Therefore, we do not have data to reflect the prior authorizations that were approved by the plan.  It is possible that MA plans are approving prior authorization requests at a higher rate.  Discussions with PAC providers suggest, however, that this is not the case.  CMS will need to ensure that IRE decisions are consistent with the requirements of the rule and increase the transparency for how the IRE reaches its determinations.

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