The first big issue for a Medicare beneficiary is whether to enroll in original Medicare or a Medicare Advantage plan. The decision can be reviewed each year during the open enrollment period, which runs from October 15 through December 7.
A major difference between original Medicare and Advantage plans is that most Advantage plan require prior authorization before a type of medical care is covered by the plan. The plan often has to approve not only the care or service but also the doctor or other medical provider.
There have been negative reports about prior authorization in Advantage plans in recent years. For example, an Inspector General report in 2022 found that 13% of denials were for benefits that should have been covered.
The report said that some Advantage plans used clinical guidelines not contained in Medicare or requested additional documentation that wasn’t necessary.
Some beneficiaries complain that it takes too long for plans to rule on prior authorization requests and that the appeal process isn’t clear and takes too long.
A consequence is that disenrollments in Advantage plans increased to 17% in 2021 from 10% in 2017. But Advantage plans continue to be popular, enrolling more than 50% of Medicare beneficiaries in 2023 for the first time.
In response to the complaints, earlier this year the federal government issued new prior authorization rules for Advantage plans that are set to take effect in 2024.
The rules require Advantage plans to issue more information about prior authorization requests to beneficiaries, establish clearer guidance on how to submit a request that’s likely to be successful, and release more data to the public.
Authorization isn’t supposed to be denied for financial reasons. An Advantage plan member is supposed to receive the same types and levels of care they would receive under original Medicare.
Advantage plans still can limit coverage to doctors and other medical providers in their networks.
Before deciding to enroll in a Medicare Advantage plan, know the rules on prior authorization for care and the ability to appeal an unfavorable decision. Consider asking the plan for details about the percentage of requests for care that are denied.