Virtually all enrollees in Medicare Advantage (99%) are required to obtain prior authorization for some services – most commonly, higher cost services, such as inpatient hospital stays, skilled nursing facility stays, and chemotherapy. This contrasts with traditional Medicare, where only a limited set of services, including certain outpatient hospital services, non-emergency ambulance transport, and durable medical equipment, require prior authorization (see Box 1).

Prior authorization requirements are intended to ensure that health care services are medically necessary by requiring approval before a service or other benefit will be covered. Medicare Advantage insurers typically use prior authorization, along with other tools, such as provider networks, to manage utilization and lower costs. This may contribute to their ability to offer extra benefits and reduced cost sharing, typically for no additional premium, while maintaining strong financial performance. At the same time, prior authorization processes and requirements, including the use of artificial intelligence to review requests, may result in administrative hassles for providers, delays for patients in receiving necessary care, and in some instances, denials of medically necessary services, such as post-acute care.

This analysis uses data submitted by Medicare Advantage insurers to the Centers for Medicare and Medicaid Services (CMS) to examine the trends in the number of requests for prior authorization determinations, denials, and appeals for 2019 through 2023, as well as differences across Medicare Advantage insurers. It does not include determinations or denials by type of service or plan because CMS does not collect or report this information, though such data could help inform consumers in choosing among plans. It also presents data from CMS about the use of prior authorization in traditional Medicare, including the number of reviews and denials for 2021 through 2023, and the share appealed and the outcome of the appeal for 2021 and 2022 (the 2023 data do not include this information).

Key Takeaways:

• Medicare Advantage insurers made nearly 50 million prior authorization determinations in 2023, reflecting steady year-over-year increases since 2021 (37 million) and 2022 (42 million) as the number of people enrolled in Medicare Advantage has grown. The determinations represent requests for approval that providers are required to submit before providing a service. Substantially fewer prior authorization reviews for traditional Medicare beneficiaries were submitted to CMS – just under 400,000 in fiscal year 2023 – though the number of people enrolled in Medicare Advantage and traditional Medicare were similar in these years.
• In 2023, there were nearly 2 prior authorization determinations on average per Medicare Advantage enrollee, similar to the amount in 2019. In contrast, in 2023, about 1 prior authorization review was submitted per 100 traditional Medicare beneficiaries – a rate of about 0.01 per person — which reflects the limited set of services subject to prior authorization in traditional Medicare.
• In 2023, insurers fully or partially denied 3.2 million prior authorization requests, which is a somewhat smaller share (6.4%) of all requests than in 2022 (7.4%). Though there were substantially fewer prior authorization reviews for traditional Medicare beneficiaries, a larger share was denied – 28.8% in 2023.  Denial rates varied across the limited set of services subject to prior authorization in traditional Medicare.
• A small share of denied prior authorization requests was appealed in Medicare Advantage (11.7% in 2023). That represents an increase since 2019, when 7.5% of denied prior authorization requests in Medicare Advantage were appealed. A relatively small share of denied prior authorization reviews was appealed in traditional Medicare (6.4% in 2022) as well.
• Though a small share of prior authorization denials were appealed to Medicare Advantage insurers, most appeals (81.7%) were partially or fully overturned in 2023. That compares to less than one-third (29%) of appeals overturned in traditional Medicare in 2022. These requests represent medical care that was ordered by a health care provider and ultimately deemed necessary but was potentially delayed because of the additional step of appealing the initial prior authorization decision. Such delays may have negative effects on a person’s health.

Prior authorization practices have gotten a fair amount of attention in recent years. During the Biden Administration, CMS finalized three rules related to the use of prior authorization in Medicare Advantage. Among other changes, the three rules clarify the criteria that may be used by Medicare Advantage plans to establish prior authorization policies, streamline the prior authorization process for Medicare Advantage and certain other insurers, and require Medicare Advantage plans to evaluate the effect of prior authorization policies on people with certain social risk factors. In December 2024, the outgoing Biden Administration proposed further changes, including clarifying coverage requirements in Medicare Advantage. The Trump Administration will have an opportunity to modify or finalize these proposed changes and may propose additional regulatory changes. Additionally, lawmakers in Congress have held hearings, requested detailed data from the largest Medicare Advantage insurers, and introduced several bills to improve transparency and reform other aspects of prior authorization (see Box 2). Despite bipartisan support encompassing a majority of members in both houses of Congress, legislation on the use of prior authorization has not been enacted.

Use of Prior Authorization in Medicare Advantage

As part of its oversight of Medicare Advantage plans, CMS requires Medicare Advantage insurers to submit data for each Medicare Advantage contract (which usually includes multiple plans) that includes the number of prior authorization determinations made during a year, and whether the request was approved. Insurers are additionally required to indicate the number of initial decisions that were appealed (reconsiderations) and the outcome of that process, including whether the initial decision was affirmed, partially overturned, or fully overturned. These data are useful for assessing overall trends and variations across insurers, but do not contain the information necessary to understand how the use of prior authorization varies by type of service or type of plan.

In 2023, Medicare Advantage insurers made nearly 50 million prior authorization determinations.

After dropping in 2020 amid the initial phase of the COVID-19 pandemic, prior authorization determinations increased steadily between 2021 and 2023. The decline in 2020 was likely due to both a decline in utilization, as well as the option for insurers to temporarily pause prior authorization requirements during the public health emergency.

The recent increase in the total number of prior authorization determinations since 2020 corresponds to an increase in Medicare Advantage enrollment. Between 2019 and 2023, the number of Medicare Advantage enrollees rose from 22 million people to 31 million people. In 2019, there were approximately 1.7 prior authorization determinations per Medicare Advantage enrollee. That number dropped at the onset of the COVID-19 pandemic to 1.4 in 2020 and 1.5 in 2021, before returning to the pre-pandemic level of 1.7 determinations per enrollee in 2022 and rising slightly to 1.8 in 2023 

Medicare Advantage insurers denied 3.2 million (6.4%) prior authorization requests in 2023.

Of the 49.8 million prior authorization determinations in 2023, more than 90% (46.6 million) were fully favorable, meaning the requested item or service was approved in full. However, the remaining 3.2 million prior authorization determinations (6.4%) were unfavorable, meaning they were denied in full or in part by Medicare Advantage insurers. This is slightly lower than the 7.4% of requests that were denied in 2022 (which amounted to 3.4 million denials). Both the share and number of requests denied was higher in 2023 than in 2019. Across all years, most denials (81% in 2023, data not shown) were denied in full, while a minority of denials were determined to be partially favorable, meaning that only part of the request was approved. For example, the insurer may have approved 10 of 14 requested therapy sessions.

Just 11.7% of denied prior authorization requests were appealed to Medicare Advantage insurers in 2023.

The majority of the 3.2 million denied prior authorization requests were not appealed, similar to previous years. In 2019, just 7.5% of all denials were appealed. That share increased somewhat in 2020 to 10.2% and was relatively stable in 2021 (10.6%) and 2022 (9.9%). These include appeals of determinations that were both fully and partially denied.

The vast majority of denied prior authorization requests that were appealed were subsequently overturned by Medicare Advantage insurers.

From 2019 through 2023, more than eight in ten (81.7%) denied prior authorization requests that were appealed were overturned. This raises questions about whether the initial request should have been approved, although it could also indicate that the initial request was missing the required documentation to justify the service. In either case, patients potentially faced delays in obtaining services that were ultimately approved because of the prior authorization process.

Variation in Use of Prior Authorization Across Medicare Advantage Insurers in 2023

In 2023, the volume of prior authorization determinations varied across Medicare Advantage insurers, as did the share of requests that were denied, the share of denials that were appealed, and the share of decisions that were overturned upon appeal, meaning people may have different experiences depending on the Medicare Advantage plan in which they enroll.

Across most insurers, a higher number of prior authorization determinations per enrollee was correlated with a smaller share of requests being denied and vice versa. For example, prior authorization determinations for UnitedHealthcare and Humana, the two largest Medicare Advantage insurers, were among the highest (Humana, 3.1 determinations per enrollee) and lowest (UnitedHealthcare, 1.0 determinations per enrollee) observed, and correspondingly, denial rates were below average (Humana, 3.5%) and above average (UnitedHealthcare, 9.1%) for these insurers.

While all Medicare Advantage insurers require prior authorization for at least some services, there is variation across insurers and plans in the specific services that are subject to these requirements. In addition, some insurers waive prior authorization requirements for certain providers, for example, as part of risk-based contracts or through “gold carding” programs that exempt providers with a history of complying with the insurer’s prior authorization policies.

The Use of Prior Authorization in Traditional Medicare

The use of prior authorization is relatively new to traditional Medicare and only used for a limited set of services, including certain outpatient hospital services, non-emergency ambulance transport, and durable medical equipment (see Box 1). The prior authorization process does not change any documentation requirements that are not already necessary for receiving Medicare payment – they are just required earlier in the process. CMS has recently published two reports presenting data on the use of prior authorization in traditional Medicare for fiscal years 2021, 2022, and 2023. These reports include information on the number of reviews completed and the number and share of reviews that were affirmed. For 2021 and 2022 only, the data also include information on appeals and the outcome of the appeal.

Just under 400,000 prior authorization reviews were completed by CMS for traditional Medicare in 2023.

Across the three categories of services that required prior authorization for certain services, there were 216,571 reviews completed in 2021, 260,986 reviews completed in 2022, and 393,749 reviews completed in 2023. This translates to about 1 prior authorization review per 100 traditional Medicare beneficiaries in 2023 – a rate of about 0.01 per person.

About one-quarter of prior authorization reviews in traditional Medicare denied coverage of the service.

CMS approved (or affirmed) coverage in the majority of prior authorization reviews it completed. CMS reported that 24.8% of requests were denied (or non-affirmed) in 2021, 27.6% of requests were denied in 2022, and 28.8% of requests were denied in 2023. This reflects 53,680 denied requests in 2021, 72,029 denied requests in 2022, and 113,448 denied request in 2023.

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