A new analysis by KFF provides an insightful chart for DME/ HME providers regarding prior authorization rates and insurer practices.
Helpfully, KFF highlights three major takeaways from the study! We have taken these directly from KFF’s original study overview, but the boldened sections are ours for emphasis:
- Medicare Advantage insurers denied 12% of standard prior authorization requests, Medicaid managed care insurers denied 14%, and ACA Marketplace insurers denied 18%. Denial rates for expedited requests were slightly lower. However, the aggregated approval statistics do not allow for further analysis into which services are being denied.
- Prior authorization denials are rarely appealed, but when they are, a considerable share are overturned. Sixty-seven percent of prior authorization denials were overturned upon appeal in Medicare Advantage, 47% were overturned upon appeal in Medicaid managed care, and 43% were overturned in the ACA federally facilitated Marketplace.
- Median response times in all markets were about 1 day for standard prior authorization requests, and about half a day for expedited prior authorization requests for Medicare Advantage, and approximately 1 day for Medicaid managed care and the ACA Marketplace. Insurers are not required to report response time ranges or differences by service category.
HME News offers insight into the study as well, stating that, in 2024, “the Centers for Medicare & Medicaid Services (CMS) published a final rule aimed at streamlining and automating the prior authorization process for almost all insurance programs it oversees…. payers in these programs are now required to publicly post on their websites specified prior authorization metrics, including approval and denial rates and response times, aggregated for all medical items and services…”
What Could This Mean for DMEs/ HMEs?
- Expect denials: Prior authorization denials are common across insurance markets, as the KFF study made extremely clear, making accurate documentation and submission important.
- Appeals matter: Many denials are overturned, highlighting the value of having a consistent denial and appeals process.
- Speed matters: With insurers typically responding within about a day, DMEs/HMEs need efficient workflows to keep orders moving.
- Automation can help: Automating documentation checks, authorization tracking, and denial workflows can reduce administrative burden and delays. Prior authorization automation is absolutely worth exploring for DMEs/ HMEs interested in crafting more efficient, scalable workflows in an atmosphere of prevalent denials.
