Disenrollment of High-Cost MA Members Raises Questions About Prior Authorization

Jan 16
Jan 16, 2025

Medicare spending is significantly higher for individuals who switch from Medicare Advantage to traditional, fee-for-service Medicare — 27% higher on average — compared to those who remain in FFS Medicare. That’s according to a KFF analysis, published last month, that examined 2021 and 2022 data from the Medicare Beneficiary Summary File. The findings support previous investigations and research suggesting that those leaving MA may have greater health care needs that aren’t being met by their plan, leading to a spike in costs when they switch to FFS Medicare, particularly during that first year.

In 2022, Medicare spent an average of $12,012 per person on beneficiaries who disenrolled from MA the previous year, vs. $9,427 on beneficiaries who had been continuously enrolled in FFS. Skilled nursing facility services drove 34% of the overall cost difference between cohorts, followed by outpatient hospital services at 23% and inpatient hospital services at 20%. KFF pointed out that MA plans often require prior authorization for post-acute services such as skilled nursing facility stays, highlighting an October 2024 report from the U.S. Senate Permanent Subcommittee on Investigations, which found that MA plans are more likely to deny PA for post-acute care than other types of services. These denials could be driving higher-needs beneficiaries to drop MA coverage in favor of FFS. MA plans also frequently use PA to manage the use of costly Part B drugs, including chemotherapy, and inpatient hospital stays, according to KFF.
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Carina Belles

Carina has been covering public-sector health care since 2018. As a data reporter for Radar on Medicare Advantage, she creates infographics and data stories on issues impacting Medicare, Medicaid and Part D. She also develops AIS Health Daily, a free daily newsletter that showcases AIS’s strong reporting across our four publications and parent company Norstella’s suite of market access and data solutions. Prior to joining the editorial team, she managed Medicare and Medicaid data for the Directory of Health Plans, AIS’s industry-standard health coverage database. She graduated from Ohio University with a B.S. in Journalism.