Do You Know If Your Medicare Advantage Plan Requires Prior Authorization?

My 90-year-old uncle, a retired county employee, has had a Medicare Advantage preferred provider organization (PPO) plan for the last eight years. He sees his primary physician once or twice a year. However, now he has been experiencing dizzy spells and falls. His physician ordered a slew of medical tests. I asked my uncle, “Does your plan require prior authorization for these tests?” His reply was a shoulder shrug.

Because my uncle has no idea what prior authorization is, let alone whether or not his plan has those rules, I asked about any medical procedures he might have had recently. Four years ago, he had several medical tests without any issues. But that was before authorization was the big deal it is today. (In 2018, 61% of Medicare Advantage enrollees were in plans requiring authorization for procedures and lab tests. That increased to over 90% in 2021.)

It became clear that my uncle needed a crash course on prior authorization.

What is prior authorization?

Prior authorization, sometimes called preauthorization or prior approval, is a health insurer or plan’s decision that a healthcare service, treatment, prescription drug or durable medical equipment is medically necessary. Today, 99% of Medicare Advantage members are in plans that require prior approval for services including inpatient admissions, skilled nursing facility stays, mental health services, home health care, chiropractic services, outpatient surgery and services, ambulance transport, medical equipment, diagnostic tests, and laboratory and radiology services. (Plans cannot require authorization in emergency situations.)

For my uncle’s medical tests, the plan will either approve or deny the request. If the test is not authorized, the Medicare Advantage plan may not pay. In a plan’s Evidence of Coverage (EOC), the legal contract between the plan and you, there is language something like, “If prior authorization is required and not obtained, no benefits will be payable under the plan.” Translation: Pay attention to the fine print. If you don’t, you could be responsible for full payment.

How do you identify the requirements?

Prior to the fall Open Enrollment Period, Medicare Advantage plans will send a copy of the EOC or a link to it on the plan’s website. One of the easiest ways to locate whether or not these rules apply to your plan is to search the document for “prior authorization.” With his daughter’s help, my uncle accessed his EOC and found that the procedures he needs “may require” authorization. They are going to contact the physician and a plan representative for details, so he doesn’t end up on the hook.

What should you do about prior authorization?

A friend has lived with these requirements for several years. After determining that prior authorization applies in a specific situation, he follows a process that he shared with me.

• Find a copy of your insurance company’s form or process. Check the website or call a plan representative. Your physician may need it and you’ll know exactly what information must be included.
• Confirm that whoever in your physician’s office is in charge of this process knows that you need an authorization and the date due.
• Double check that documentation is submitted, and that approval is received before the service. You may want to confirm your costs.
• Remember, if you move forward without authorization, you might have to pay the full cost.

From a Medicare Advantage plan’s perspective, prior authorization can promote safe, timely, evidence-based, affordable, and efficient care. However, the American Medical Association believes that prior authorization “is overused, costly, inefficient, opaque and responsible for patient care delays” and is implementing measures to reform the process. Until then, for my uncle and all those with Medicare Advantage plans caught in the middle, it’s simply a fact of life. Knowing what to do will help you get the medical care you need.