View Series

What is prior authorization in Medicare?

6-minute read

Article 8 out of 11 in Medicare Terms

Kimberly Lankford,

Updated August 13, 2024

AARP

En español

Published December 11, 2023

/ Updated August 13, 2024

In this story

Prior authorization circumstances • Original Medicare • Medicare Advantage • Part D • Steps to appeal

Prior authorization is preapproval for medical services or prescription drugs that health insurance plans often require before they’ll cover the cost.

Typically, a provider or supplier submits forms to a health insurance plan to verify the need for a specific drug, piece of equipment or service. Plans put these requirements in place to avoid paying for unnecessary services or expensive procedures and drugs when a lower-cost version that’s available could work just as well.

Prior authorization also lets patients know ahead of time if their plan will approve something that’s not always covered rather than having to appeal a denial after the fact.

But how often and under what circumstances prior authorization is required depends on the health plan. While original Medicare has a few prior authorization requirements, private Medicare Advantage plans and Part D prescription drug plans use this procedure more often.

In fact, a new study by KFF, formerly the Kaiser Family Foundation, released in August found Medicare Advantage prior authorization requests increased significantly from 37 million in 2019 to more than 46 million in 2022. The share of denied prior authorization requests also increased after several years of being stable, from 5.8 percent in 2021 up to 7.4 percent in 2022. What’s more, KFF uncovered that the majority of denials in Medicare Advantage plans were overturned on appeal.

What is prior authorization in original Medicare?

Original Medicare rarely requires prior authorization. The government program covers medically necessary services without requiring you or your doctor to submit special forms in advance or even a referral to see a specialist.

Original Medicare prior authorization

Original Medicare requires prior authorization only for three types of services. In 2022, most of the requests were approved in an average of about four days.

Outpatient services, primarily dermatology

• Percentage approved: 78.6 percent
• Average time: 4.5 days
• Denials overturned on appeal: 0.3 percent

Durable medical equipment

• Percentage approved: 66.9 percent
• Average time: 4.7 days
• Denials overturned on appeal: 0.3 percent

Nonemergency ambulance services

• Percentage approved: 63.2 percent
• Average time: 4.1 days
• Denials overturned on appeal: 3.9 percent

Source: Centers for Medicare & Medicaid Services

In the few instances when authorization is needed, a Medicare administrative contractor (MAC) reviews the request and makes a decision

What is prior authorization in Medicare Advantage?

Prior authorization requirements are more common in Medicare Advantage plans. A separate KFF study found that almost all Medicare Advantage enrollees in 2024 — 99 percent — are in plans that require prior authorization for some services, the most common being:

Durable medical equipment: 99 percent
Skilled nursing facility stays: 99 percent
Sudden, short-term inpatient hospital stays, called acute care: 98 percent
Part B drugs, which are generally given in a doctor’s office or outpatient center, such as chemotherapy: 98 percent
Psychiatric inpatient hospital stays: 93 percent
Diagnostic lab work and tests: 92 percent
Home health services: 90 percent
Diabetic supplies and services: 87 percent
Comprehensive dental services: 86 percent

“Virtually all Medicare Advantage enrollees are in plans that require prior authorization for at least some services,” says Jeannie Fuglesten Biniek, associate director for KFF’s program on Medicare policy and coauthor of the recently released MA study. “These are often for higher-cost services, such as inpatient hospital stays, skilled nursing facility and chemotherapy. These are things people are using at a time when they’re particularly vulnerable.”

Medicare Advantage plans are prohibited from applying prior authorization requirements on emergency services, and they must disclose rules and other review requirements to enrollees. Before choosing a Medicare Advantage plan, read the plan’s evidence of coverage (EOC) to find out more about its prior authorization rules.

In 2022, the U.S. Department of Health and Human Services Office of Inspector General studied a random sample of 250 prior authorization denials issued by 15 of the largest MA plans from June 1–7, 2019. The government found that original Medicare likely would have covered 13 percent of the services denied.

In 2024, the Centers for Medicare & Medicaid Services (CMS) started to require Medicare Advantage plans to streamline their prior authorization process to ensure people with Medicare Advantage receive access to the same medically necessary care they would receive in original Medicare.

“We know how frustrating it can be when people have their care denied by their health plan, and we want to make sure there is access to necessary medical care,” Meena Seshamani, M.D., and director of the CMS Center for Medicare said in an interview with AARP. “So now, if traditional Medicare has a coverage decision, Medicare Advantage has to follow it. They cannot create additional hoops to jump through or barriers to access that care."

Beginning in 2026, Medicare Advantage plans will be subject to new prior authorization rules that will shorten the time frame for insurers to respond to requests from 14 to seven days and make the process more transparent.

What is prior authorization in Medicare Part D?

Many Part D prescription drug plans that require prior authorization include:

Expensive specialty drugs
Drugs that may be misused, such as some cannabis-derived medications
Drugs that may be used in ways that aren’t FDA-approved, such as Ozempic, which Medicare covers for diabetes but not weight loss

You or your prescriber must contact the plan to show the drug is medically necessary before you can fill certain prescriptions.

Part D plan documents usually include a list of drugs that require prior authorization or you can check if plans in your area have restrictions on your medications by entering your drugs and doses into the Medicare Plan Finder.

Keep in mind

Appealing a prior authorization denial can be worthwhile, especially with Medicare Advantage plans.

Of the 46 million-plus prior authorization requests submitted to Medicare Advantage plans in 2022, insurers fully or partially denied 3.4 million, KFF found. Only 9.9 percent of the denials were appealed; of those appealed, some 83 percent were fully or partially overturned.

Steps to appeal: Contact your Medicare Advantage insurer to learn how to appeal a denial, which can take up to 14 days. However, the plan must make an expedited decision in 72 hours if your doctor deems waiting may jeopardize your health.

If you or someone you know is in the midst of a significant medical situation, waiting can be difficult. Biniek says some providers will assist with the process on your behalf or they will work with the insurer to figure out how to get it approved.

“You get a letter in the mail that says this has been denied, and it can be overwhelming to figure out how to argue that you need this — you have to put together a case” she says.

For more information about appealing each type of prior authorization denial, see the Medicare appeals resource at Medicare.gov.

%{postComment}%

Kimberly Lankford is a contributing writer who covers Medicare and personal finance. She wrote about insurance, Medicare, retirement and taxes for more than 20 years at Kiplinger’s Personal Finance and has written for The Washington Post and Boston Globe. She received the personal finance Best in Business award from the Society of American Business Editors and Writers and the New York State Society of CPAs’ excellence in financial journalism award for her guide to Medicare.