Prior Authorization in Medicare Advantage

Prior authorization is the tool that most distinguishes Medicare Advantage from traditional Medicare in a member’s daily experience, and it generates more complaints than any other MA practice. Recent rules have constrained it substantially, and knowing those constraints is essential for anyone working in or with MA.

What the CY2024 rule changed

The Contract Year 2024 Medicare Advantage rule imposed several requirements that narrowed how plans may use utilization management:

• Coverage criteria must align with traditional Medicare. Plans must follow traditional Medicare’s coverage requirements, including national and local coverage determinations, rather than applying stricter internal criteria.
• A Utilization Management Committee is required. Each plan must convene one to review all utilization management and prior authorization policies annually and confirm they are consistent with Medicare coverage rules.
• Prior authorization has a limited purpose. It may be used only to confirm the presence of a diagnosis or determine medical necessity, or, for supplemental benefits, clinical appropriateness. It is not a general cost-control lever.
• Reviewers must be qualified. A clinician reviewing a prior authorization request must have expertise in the relevant medical discipline.

Worth remembering: the alignment requirement is the substantive heart of the rule. It closes the gap where a plan could nominally cover everything traditional Medicare covers while applying internal criteria strict enough to deny care Medicare would have approved. If MA must cover what Medicare covers, then MA’s own criteria cannot be tighter.

What the interoperability rule added

The prior authorization rule covered in the data course, CMS-0057-F, layers timing and technology requirements on top. Beginning in 2026, affected payers including MA plans must decide prior authorization requests within 72 hours for expedited requests and seven calendar days for standard requests, and by 2027 must operate FHIR-based APIs including a Prior Authorization API so requests move electronically rather than by fax and phone.

The honest assessment

These rules address real problems: unjustified denials, opaque criteria, and delays that harm patients. They do not eliminate prior authorization, and they do not settle the underlying tension. Utilization management exists because someone bearing risk has an incentive to prevent unnecessary care, and that same incentive can suppress necessary care. The rules narrow the space for the second without removing the first. Whether they work in practice is an enforcement question, which the field is still watching.

Key takeaways

• MA coverage criteria must align with traditional Medicare, including national and local coverage determinations.
• Plans must run a Utilization Management Committee reviewing policies annually, limit prior authorization to diagnosis and medical necessity, and use appropriately qualified reviewers.
• From 2026, decisions are due within 72 hours (expedited) or seven calendar days (standard), with FHIR prior authorization APIs required by 2027.

Sources

• CMS, 2024 Medicare Advantage and Part D Final Rule (CMS-4201-F) (opens in a new tab)
• CMS, Interoperability and Prior Authorization Final Rule (CMS-0057-F) (opens in a new tab)