Prior Authorization In Medicare Advantage: Beneficiary Exposure And Plan Disenrollment In 2021

Medicare Advantage plans use prior authorization to manage health care use. In recent years, these practices have come under intense scrutiny from policy makers. Using beneficiary enrollment data and contract-level prior authorization data from 2021, we documented three facts about prior authorization in Medicare Advantage. First, beneficiaries who live in different areas of the country enrolled in contracts with widely varying prior authorization rates. Second, Hispanic, Asian, Black or African American, and dual-eligible beneficiaries were disproportionately likely to enroll in plans with high prior authorization rates. Third, beneficiaries enrolled in contracts with higher prior authorization rates were more likely to disenroll from their contract-moving either to another Medicare Advantage contract or to traditional Medicare-than beneficiaries in contracts with lower prior authorization rates. Beneficiaries exposed to the highest quartile of prior authorization rates were 4.7 percentage points more likely to disenroll than beneficiaries exposed to the lowest quartile, a 44 percent difference. Higher disenrollment may suggest that beneficiaries are dissatisfied with plans that have higher prior authorization rates. Reducing overall rates of prior authorization could improve beneficiary retention in the Medicare Advantage program.