Slowly but steadily, Marlene Nathanson was recovering. She had suffered a stroke in November 2022 at her home in Minneapolis and spent a week in a hospital; afterward, when she arrived at Episcopal Homes in St. Paul for rehabilitation, she couldn’t walk. Weakness in her right arm and hand left her unable to feed herself, and her speech remained somewhat garbled.
But over three weeks of physical, occupational and speech therapy, “she was making good progress,” her husband, Iric Nathanson, said. “Her therapists were very encouraging.” Ms. Nathanson, then 85, had begun to get around using a walker. Her arm was growing stronger and her speech had nearly returned to normal.
Then, on a Wednesday afternoon, one of her therapists told the Nathansons that their Medicare Advantage plan had refused a request to cover further treatment. “She has to leave our facility by Friday,” the therapist said, apologetically.
Mr. Nathanson, then 82, felt anxious and angry. He didn’t see how he could arrange for home care aides and equipment in 48 hours. Besides, he said, “it didn’t seem right that the therapists and professionals couldn’t determine the course of her care” and had to yield to an insurance company’s dictates. “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, particularly those carrying high price tags, such as chemotherapy, hospital stays, nursing home care and home health.
“Most people come across this at some point if they stay in a Medicare Advantage plan,” said Jeannie Fuglesten Biniek, associate director of the program on Medicare policy at KFF, the nonprofit health policy research organization. After years of steep growth, more than half of Medicare beneficiaries are now enrolled in Advantage plans, which are administered by private insurance companies.
In 2021, those plans received more than 35 million prior authorization requests, according to a KFF analysis, and turned down about two million, or 6 percent, in whole or in part.
“The rationale plans use is they want to prevent unnecessary, ill-advised or wasteful care,” said David Lipschutz, associate director of the nonprofit Center for Medicare Advocacy, which frequently hears complaints about prior authorization from both patients and health care providers. But, he added, it’s also “a cost-containment measure.” Insurers can save money by restricting coverage; they’ve also learned that few beneficiaries challenge denials, even though they are entitled to 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,” Mr. Lipschutz said. (Medicare Advantage has never saved money for the Medicare program.)
Such criticisms have circulated for years, bolstered by two reports from the Office of Inspector General in the Department of Health and Human Services. In 2018, a report found “widespread and persistent” problems related to denials of prior authorization and payments to providers. It noted that Advantage plans overturned 75 percent of those denials when patients or providers appealed.
In 2022, a second inspector general’s report revealed that 13 percent of denied prior authorization requests met Medicare coverage rules and probably would have been approved by traditional Medicare.
By that point, a KFF analysis found, the proportion of prior authorization denials overturned on appeal had reached 82 percent, raising the possibility that many “should not have been denied in the first place,” Dr. Biniek said.
Yet few denials — only about 11 percent — are appealed. Last year, a KFF study found that 35 percent of all Medicare beneficiaries didn’t know they had a legal right to appeal; 7 percent mistakenly thought they had no such right.
Moreover, the appeals process can be complex, a burden for those already struggling through health crises. “Insurers may deny more aggressively because they know people don’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 to, some just give up. “People don’t get the care to which they’re entitled,” Mr. Lipschutz said.
Responding to the inspector general reports, and to a rising tide 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, it clarified that Medicare Advantage plans must cover the same “medically necessary care” as traditional Medicare. “CMS will be conducting 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 the process, cutting the time in which insurers must respond to prior authorization requests to seven days from 14. (For “expedited requests,” it’s 72 hours.) The rule also will require insurance plans to post prior authorization information — numbers of requests, review times, denials and appeals — on their websites. The following year, plans must adopt a new digital system so that plans and providers can more efficiently share information about prior authorization review.
Patients and advocacy groups have powerful allies in their efforts to reform prior authorization; health care providers have 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 makes us jump through so many hoops,” said Dr. Sandeep Singh, chief medical officer of the Good Shepherd Rehabilitation Network in Allentown, Pa. “It’s created such stress in the health care system.” A few years ago, his organization had one “insurance verification specialist” whose job was to handle prior authorization requests and appeals; now, it employs three.
Prior authorization has delayed admissions, Dr. Singh said. It has steered patients away from specialized hospitals like Good Shepherd, with its intensive therapy schedules, to standard nursing homes or to home care, he added, where patients receive fewer hours of therapy and face higher rates of re-hospitalization. It diverts time the staff would rather spend on patient care.
On a recent weekend, Dr. Singh spent two hours coordinating and submitting an appeal for a patient with spinal cord damage and brain trauma. After 19 days at Good Shepherd, “she’s come a long way, but she can’t be home alone safely,” he said. Yet her insurer was “telling us to push her out now.” He decided instead to extend her stay while the prior authorization appeals proceed. “Unfortunately, we will have to absorb the costs” — about $1,800 a day, he said.
Will Medicare’s new 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 intention is there, but the jury’s still out on whether this is working.”
“It comes down to enforcement,” he said. He pointed out one lesson from researchers, however: It pays to appeal.
Usually. Earlier in 2022, Mr. Nathanson received a diagnosis of prostate cancer. His oncologist ordered a specialized M.R.I.; his Advantage plan said no. But his doctor contacted the insurer, and after some back and forth it agreed to cover the scan. Mr. Nathanson is in remission, although he is still exasperated at the two- to three-week delay in his care.
The appeal for further rehabilitation at Episcopal Homes for Ms. Nathanson did not reverse their insurer’s denial, however. She stayed for two more days, which cost the couple $1,000 out of pocket; they felt fortunate to be able to pay it.
After breaking a hip last fall, Ms. Nathanson now lives at Episcopal Homes. She, too, resents having her insurer overrule her health care professionals. “I wish I could have stayed with them longer,” she said in an email. “But I had to go home before I was ready.”