Medicare Advantage Denials Increased Before the Implementation of New Prior Authorization Rules

The Medicare Rights Center reported that Medicare Advantage denials increased in the period preceding the implementation of new CMS prior authorization rules. This timing raises uncomfortable questions about payer behavior: are MA plans accelerating denials before new regulations restrict their ability to do so? And what should physician practices make of this pattern?

The data shows a measurable uptick in denial rates across Medicare Advantage plans in the months before new CMS rules took effect — rules that are designed to increase transparency, reduce unnecessary prior authorization, and give beneficiaries more information about coverage decisions. The correlation between regulatory deadlines and increased denials warrants serious attention from practices with significant MA patient populations.

The Timing Problem

CMS finalized its Interoperability and Prior Authorization Rule in January 2024, with phased implementation deadlines extending through 2027. The rule requires MA plans to implement electronic prior authorization systems, respond to PA requests within specified timeframes, provide specific reasons for denials, and publicly report prior authorization data.

The increase in denials ahead of these requirements suggests several possible explanations:

• Pre-regulation tightening. MA plans may be establishing more restrictive coverage criteria before regulatory requirements limit their discretion. By setting a baseline of higher denial rates now, future reductions may appear more significant than they actually are.
• Revenue protection. MA plans facing new transparency and reporting requirements may be maximizing claim denials in the period before their denial data becomes public, knowing that higher visibility will create pressure to reduce denial rates.
• Medical policy adjustments. Plans may be updating their medical policies to align with new regulatory requirements, with short-term denial increases resulting from stricter interpretation of existing policies during the transition period.

Impact on Physician Practices

Regardless of the motivation, the practical impact on physician practices is the same: more denials, more administrative work, and more revenue at risk. Medicare Advantage patients now represent a substantial percentage of the Medicare population, and many physician practices derive a significant portion of their revenue from MA plans.

The denial increase is particularly concerning because MA denials were already elevated. The HHS Office of Inspector General documented in 2022 that 13 percent of MA prior authorization denials met Medicare coverage rules — meaning the denied services were medically appropriate and should have been covered. More recent data from Health Affairs found a 17 percent initial denial rate across MA plans, with 57 percent of denials ultimately overturned on appeal.

An increase in denials on top of already-high baseline rates creates a compounding problem. Practices that were already struggling to keep up with MA denial volume face an even heavier workload. Practices that were not systematically appealing MA denials are leaving even more revenue on the table.

The Appeal Imperative

The data on MA denial overturn rates carries an important message: appealing works. When 57 percent of appealed denials are overturned, the return on investment for appeal activity is substantial. The practices most harmed by increased MA denial rates are not those that face more denials — it is those that fail to appeal.

Every denied MA claim that is not appealed represents revenue that the practice has effectively donated to the MA plan. When the clinical documentation supports the service that was provided, the appeal process exists to recover that revenue. The economics are straightforward: the cost of preparing and submitting an appeal is almost always less than the revenue recovered when the appeal succeeds.

Preparing for the Regulatory Transition

As CMS rules take effect over the coming years, the prior authorization landscape for Medicare Advantage will change. Practices should prepare for that transition by:

Building robust denial tracking for MA payers specifically, including denial rates by plan, by service category, and by denial reason. This data will become increasingly valuable as CMS requires MA plans to report their own PA data publicly — practices will be able to compare their experience against the plans' reported numbers.

Maintaining thorough appeal documentation. Every appeal that overturns a denial creates a record that demonstrates the denial was inappropriate. These records have cumulative value for regulatory complaints, contract negotiations, and advocacy efforts.

The increase in MA denials before new rules take effect is a predictable payer response to regulatory pressure. The most effective practice response is equally predictable: appeal every clinically supported denial, track the outcomes, and use the data to hold payers accountable.