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Federal Government’s Report on Medicare Advantage: What the Data Show


Published Apr 29, 2022 • by AHIP

More than 28 million Americans choose Medicare Advantage (MA) because it delivers better service, better access to care, and better value for seniors, people with disabilities, and taxpayers. For several years, seniors have awarded the MA program with satisfaction rates of 90% or higher. While some outspoken critics raise concerns about the program’s performance, a clear look at the data finds that MA is improving affordability and access to high-quality care for the people it serves.

For example, on April 28, 2022, the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) released a report on prior authorization in MA. The OIG noted that the overwhelming majority (95%) of prior authorization requests in 2018 were approved.

The OIG then looked at 247 prior authorization (PA) requests that were denied during one week in June 2019.

The report found that:

  1. Almost all (87%) of the coverage determinations where PA requests were denied raised no concerns for the OIG.
  2. Of the remaining 13% of PA requests that were denied– only 33 cases in the OIG’s sample – 7 of them were reversed within 3 months, often as part of the plan’s appeals process.
  3. Further, the main concern about many of those cases was not that they were improper, but rather that more guidance from the government was needed on criteria that plans can use to make coverage determinations.

None of the requests for payment that were denied had an impact on access to care for a patient.

In its response to the report, the Centers for Medicare & Medicaid Services (CMS) noted that plan performance is improving, with the average number of issues cited per audit declining “approximately 70 percent from 2012 to 2019.”

When looked at properly, the data actually tell a compelling story of value and access. But some critics misconstrue the report’s context and use it to mistakenly portray MA as a system where care is frequently denied to patients. That is simply wrong.

The sample used is extraordinarily small, examining just 247 prior authorization requests during one week in June 2019, and raising concerns with only 33 of them. Drawing far-reaching conclusions based on a very small sample of data and misleading headlines is not a productive way to improve our health care system for patients.

It’s also important to remember that prior authorization is an important patient safety, cost-saving, and waste-prevention tool. When 65% of physicians themselves have reported that at least 15-30% of medical care is unnecessary, Medicare Advantage plans have a responsibility to use prior authorization in areas prone to waste and abuse to protect seniors from unsafe, unnecessary, costly, low-value care.

In fact, one recent study found that the estimated cost of waste in the U.S. health care system ranged from $760 billion to $935 billion – about 25% of total health care spending. Potential savings from interventions that reduce waste ranged from $191 billion to $286 billion – a potential 25% reduction in the total cost of waste.

With a comprehensive view of the health care system and each patient’s medical claims history, health insurance providers work to ensure that the medications or treatments prescribed are safe, effective, and affordable to meet each patient’s health care needs. This results in better outcomes and lower costs for patients.

Medicare Advantage is a program that works for tens of millions of Americans, and it’s growing as a result of personal choice. 28 million Americans would not choose coverage that did not meet their needs. Going forward, Medicare Advantage plans look forward to continuing their work with HHS and CMS to ensure that Americans continue to receive the high-quality, affordable care they’ve become accustomed to receiving through Medicare Advantage.