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Medicare Advantage Prior Authorization Survey

Access to Inpatient Rehabilitation for Medicare Advantage Beneficiaries: An Examination of Prior Authorization Practices

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Abstract: ‎
The use of prior authorization (PA) by Medicare Advantage (MA) plans is a pressing ‎concern among rehabilitation providers. A nationwide survey of rehabilitation hospitals ‎and units (RHUs) was conducted to determine how frequently PA was used to deny ‎admission to an RHU, how timely those decisions were rendered, and the resulting ‎consequences for patients. The survey, which tracked data for one month (August ‎‎2021), found that MA plans overrule rehabilitation physician judgment at a rate of 53%. ‎In addition, patients wait on average more than two and half days for a determination. ‎This resulted in more than 30,000 days waiting for determinations during the single ‎survey month. Since the vast majority of patients being referred to an RHU are ‎hospitalized in an acute hospital, enormous cost and burden results from the use of PA. ‎In addition, seriously impaired MA beneficiaries may be harmed by denials and delays in ‎access to care. ‎

Introduction and Background
Medicare Advantage (MA) plans offer various premium and cost-sharing arrangements ‎that differ from traditional Medicare (TM), as well as health and wellness benefits not ‎offered to beneficiaries enrolled in TM. In addition to financial flexibilities, MA plans are ‎permitted to employ various utilization management strategies not regularly used in TM, ‎including requiring prior authorization (PA) of an item or service as a condition of ‎payment. When PA is required by MA plans, the plan must pre-approve the service, or ‎payment will not be made to the provider. While the use of PA to manage benefits is ‎permitted, MA plans are nonetheless obligated by law to provide all of the benefits ‎offered in TM.‎ 

The number of beneficiaries who have chosen to enroll in MA plans has grown at an ‎accelerated pace in recent years. Of the approximately 64 million Medicare beneficiaries, ‎an estimated 28 million now receive their Medicare benefits through private insurers that ‎have contracted with CMS to offer MA plans.‎ ‎ ‎

As enrollment in MA has grown, providers have reported that PA determinations and ‎subsequent denials have increased and often do not follow appropriate evidence-based ‎guidelines.‎ ‎  In addition, physicians report the PA process often delays care and has a ‎negative impact on clinical outcomes.‎ ‎ Concerns have also been raised about the lack of ‎accountability for the use of PA by MA plans. These concerns are due to high overturn ‎rates of denials and due to insufficient publicly reported data.‎ ‎ ‎
‎In the context of rehabilitation hospitals and units (RHUs), PA delays the discharge of ‎patients from an acute hospital, and denies or delays access to needed therapeutic ‎interventions. RHUs (referred to by Medicare as Inpatient Rehabilitation Facilities or ‎IRFs) provide specialized physician-directed care that includes close medical ‎management and an intensive program of rehabilitation. The goals of care in a RHU ‎include continuing medical management of the patient’s underlying health problems and ‎improving the patient’s functional capacity so that the patient can return to the ‎community. The vast majority of patients referred for admission to an RHU are in an ‎acute hospital due to serious illness or injury. ‎

The Medicare coverage criteria stipulate that a RHU stay is eligible for payment if the ‎patient would practically benefit from and tolerate intensive, multi-disciplinary therapy and ‎requires ongoing supervision by a rehabilitation physician.‎ ‎ The Medicare rules also ‎require that a rehabilitation physician approve each patient for admission. Due to the ‎stringent Medicare rules and the intensity of services offered, RHUs treat more seriously ‎ill and functionally impaired patients than lower intensity post-acute care settings.  ‎

Medicare does not have regulatory requirements for PA response times that are specific ‎to hospitalized patients. This has increasingly become a concern since many providers ‎have reported exacerbation of the process burden and high rates of denials for PA ‎requests for admissions. In addition, there is essentially no publicly available data to ‎determine the consequences of PA requirements at the initial determination level or at ‎the initial appeal level. Medicare and its contractors do report the outcomes of the ‎second level of appeal (formally referred to as “Reconsideration by an Independent ‎Review Entity”). However, this level of appeal is rarely utilized for patients seeking ‎admission to an RHU given the lengthy and time-consuming process, which is ‎impractical for patients in need of immediate care decisions.  ‎
Given the lack of available data on PA practices and outcomes, the American Medical ‎Rehabilitation Providers Association (AMRPA) conducted a survey of RHUs across the ‎nation to gain more quantitative and qualitative information, including the pervasiveness ‎of PA use as a benefits management practice, frequency of denials, and associated ‎delays in care. ‎

Survey Objectives
The goals of this survey were to determine how common denials of authorization for ‎RHU care are, how timely those determinations are made, and what the consequences ‎of those determinations may be. ‎

RHUs were solicited to participate prospectively in a data collection effort for the month ‎of August 2021. The survey was publicized through trade association and professional ‎channels to the RHU community, including disclosure of the specific questions that would ‎be included on the survey and a spreadsheet form that could be used to capture the PA ‎activity as it occurred. Participants submitted their data via an online portal.‎

The survey consisted of nine questions, shown below in Table 1.‎


Data were submitted by 102 respondents who provided information about a total of 475 ‎RHUs, representing approximately 40% of the RHUs nationwide.‎ ‎ The responses ‎included RHUs from 47 states and Puerto Rico. Data on 12,157 PA requests for the ‎month of August 2021 were included in the survey. ‎

Of the 12,157 PA requests reported for the month, 6,482 of those requests were initially ‎denied by the MA plan (53.32% of all requests). 84% of respondents reported that 30-‎‎70% of initial requests were denied during the survey month. Figure 1 shows the ‎distribution of denial frequency cited by RHUs. ‎

Figure 1. Distribution of Hospitals by denials ‎

Wait times of greater than 2 days for requests were typical for the vast majority of ‎respondents, with 84% of respondents waiting more than 2 days on average for all ‎requests. The average wait time for the initially approved requests was 2.49 days. The ‎average wait time for the initially denied requests was 2.59 days. ‎
The wait times were very consistent across all IRFs. 84% of RHUs also reported an ‎average wait time of 2.1 days or greater for denied requests. For approved requests, the ‎majority (56%) had wait periods over two days. Figure 2 shows the distribution of wait ‎time for a negative response. Figure 3 shows delays experienced when an initial ‎favorable response was received.‎

Figure 2. Distribution of Hospitals by wait time for negative response

Figure 3. Distribution of Hospitals by wait time for favorable response

A total of 14,152 acute hospital days were spent waiting for requests that were ultimately ‎approved, and 16,774 acute hospital days were spent waiting for denied requests, ‎totaling ‎30,926 total acute hospital days spent waiting for a determination‎. ‎
Respondents provided information regarding any additional effort required to seek ‎authorization for 4,823 requests. 35.39% of these requests required additional effort on ‎behalf of the hospital, physician, patient or family. For requests that required this ‎additional effort, 28.94% were approved for admission as part of the initial request. ‎
The most commonly provided reason for a denial cited by RHUs was that the patient ‎‎“could be treated at a lower level of care/intensity.” The next most common reason was ‎that the patient “does not meet medical necessity criteria.” Some respondents indicated ‎multiple rationales for denying payment so the total of reasons reported exceeds 100%. ‎Finally, 29% (136) of respondents indicated that PA was waived at some point during the ‎survey month by plans or regulators due to the COVID-19 pandemic.‎

PA is being commonly used to deny patient access to RHU care. These determinations ‎are difficult to challenge, since subsequent appeals take additional days, and the patient ‎typically must be transferred more promptly than that. The data presented here shows ‎that even when a MA plan agrees with the request, there are substantial delays in ‎communicating that decision. With these delays and denials, there is an associated risk ‎that patients may be harmed.‎ ‎ ‎
The high frequency of denials suggests that there is a striking disagreement between the ‎medical decisions of practicing rehabilitation physicians and the judgments being ‎rendered by MA plans. Since rehabilitation physicians determined that each of these ‎referred patients required RHU admission, the widespread denials by MA plans calls into ‎question what criteria and expertise plans utilized to render decisions. ‎

Although MA plans are not required to disclose the specific expertise and guidelines they ‎use to reach determinations, respondents reported the primary reason cited for a denied ‎request was that the patient “could be treated at a lower ‎intensity setting of care.” This is ‎disconcerting because Medicare has stated that this shall not be a basis for denying ‎RHU coverage, yet denials for this reason appears to be a common practice by MA ‎plans.‎ ‎  Whether a patient could be treated elsewhere is not one of the Medicare criteria ‎used by physicians to determine whether the patient is appropriate for inpatient ‎rehabilitation admission. Instead, that determination is made based on whether the ‎patient meets the enumerated Medicare standards, referenced above. This finding is ‎consistent with other surveys that have found that plans utilize improper medical ‎guidelines for PA requests.‎ 

If any of the denied patients been enrolled in TM, they likely would have been admitted ‎to the RHU without delay. Instead, because the beneficiary chose to enroll in MA, and ‎due to the opaque review process and criteria utilized by MA plans, the patients were ‎denied access to the RHU. ‎

Medicare regulations require MA plans to issue determinations “as expeditiously as the ‎enrollee's health condition requires, but no later than 72 hours after receiving the ‎request.”‎ ‎ This survey shows that MA plans consistently do not issue determinations as ‎expeditiously as the beneficiary’s condition requires, since such a response would be ‎made within minutes to hours, not days. It is likely that in many cases, PA unduly delays ‎the initiation of needed therapeutic interventions and hampers patients’ recovery. This ‎finding is again consistent with other surveys that indicate PA detrimentally impacts ‎clinical outcomes for patients.‎ 

The data presented here represent only one month of activity during the COVID-19 ‎Pandemic and National Public Health Emergency. Since the vast majority of patients ‎seeking admission to an RHU are hospitalized in an acute hospital, each day of delay in ‎transfer represents increased risk and cost. Since MA plans typically pay for hospital ‎admissions on a prospective basis, the immediate additional cost is borne by the ‎hospital.‎ ‎ As these additional lengths of stay are captured through Medicare’s tracking ‎of resource utilization, payments may be increased due to extended length of stay for ‎these patients, costing Medicare additional unnecessary dollars. ‎

MA plans’ use of the PA process to delay and deny patient transfers of from acute ‎hospitals to RHUs is a widespread and common problem that can harm patients. PA ‎processes increase administrative burden, delay necessary care, and increase waste ‎and cost to the health care system.‎
There is an urgent need to eliminate these unnecessary delays in providing care to ‎patients and mitigate denials based on opaque and inconsistent criteria. These needs ‎can be addressed by regulatory and contractual changes to the MA plan operational ‎requirements, and by ensuring that qualified clinicians are making proper and timely ‎determinations about RHU referrals. ‎


‎1.‎     ‎ 42 C.F.R. § 422.101.‎
‎2.‎     ‎ Bob Herman, Medicare Advantage enrollment soars almost 9%, Axios (Jan. 18, 2022), ‎‎‎4e69-9eba-420c0ee4ef6e.html.‎
‎3.‎     ‎ American Medical Association, 2020 AMA Prior Authorization (PA) Physician Survey, ‎‎(April, 2021)‎survey.pdf &‎reform-progress-update.pdf.‎
‎4.‎     ‎ American Medical Association, 2021 AMA Prior Authorization (PA) Physician Survey, ‎‎(February, 2022)
‎5.‎     ‎ HHS Office of Inspector General (OIG), Medicare Advantage Appeal Outcomes and ‎Audit Findings Raise Concerns About Service and Payment Denials (Sept. 25, 2018) ‎‎(‎
‎6.‎     ‎ 42 C.F.R. 412.622.‎
‎7.‎     ‎ CMS Inpatient Rehabilitation Facility Data, General Information Data Set (December ‎‎2021),‎
‎8.‎     ‎ Assessment of Patient Outcomes of Rehabilitative Care Provided in Inpatient ‎Rehabilitation Facilities (IRFs) and After Discharge; Dobson & Davanzo (July 2014) ‎‎(‎‎%20Patient%20Outcomes%20of%20IRF%20v_%20SNF%20-‎‎%207_10_14%20redated.pdf)‎
‎9.‎     ‎ CMS IRF PPS Coverage Requirements Nov. 12, 2009 National Provider Conference ‎Call (“Notice that nowhere on the slide and nowhere in this presentation are we going to ‎talk about whether the patient could have been treated in a skilled nursing facility or ‎another setting of care. Under the new requirements, a patient meeting all of their ‎required criteria for admission to an IRF would be appropriate for IRF care whether or ‎not he or she could have been treated in a skilled nursing facility.”) (Available for ‎download:‎Payment/InpatientRehabFacPPS/Coverage).‎
‎10.‎     ‎ American Medical Association, 2020 AMA Prior Authorization (PA)‎
‎11.‎    Physician Survey, (April, 2021)‎authorization-survey.pdf & ‎‎authorization-reform-progress-update.pdf. ‎
‎12.‎     ‎ 42 C.F.R. § 422.572(a).‎
‎13.‎     ‎ American Medical Association, 2020 AMA Prior Authorization (PA)‎
‎14.‎    Physician Survey, (April, 2021)‎authorization-survey.pdf & ‎‎authorization-reform-progress-update.pdf. ‎
‎15.‎     ‎ Why Medicare Advantage Plans Pay Hospitals Traditional Medicare Prices, Robert A. ‎Berenson, Jonathan H. Sunshine, David Helms, and Emily Lawton, Health Affairs 2015 ‎‎34:8, 1289-1295 ( ‎