Do Medicare Supplement Plans Require Prior Authorization?

Medicare Supplement Plans, often referred to as Medigap, are private insurance policies designed to help cover some of the out-of-pocket costs that Original Medicare (Part A and Part B) does not pay. These costs can include deductibles, coinsurance, and copayments. This article clarifies whether Medigap plans impose prior authorization requirements for covered services.

Medicare Supplement Plans and Prior Authorization

Medicare Supplement Plans do not impose prior authorization requirements for medical services. Medigap policies function by paying their share of costs after Original Medicare has approved a service and paid its portion. This means that if a service is covered by Original Medicare and deemed medically necessary, your Medigap plan will cover its designated share without requiring pre-approval from the Medigap insurer.

Medigap plans adhere to Original Medicare’s rules concerning medical necessity and coverage. Therefore, if Original Medicare does not require prior authorization for a specific healthcare service, then the associated Medigap plan will also not require it for its portion of the cost. This streamlined approach allows beneficiaries to access care without the additional administrative step of seeking approval from their supplemental insurer.

How Medicare Supplement Plans Process Claims

The claims process illustrates why Medigap plans do not require prior authorization. When a Medicare beneficiary receives a healthcare service, the healthcare provider first submits the claim directly to Original Medicare. Original Medicare then reviews the claim to determine if the service is medically necessary and covered under its guidelines.

Once Original Medicare processes the claim and pays its portion, the remaining approved costs, such as deductibles, coinsurance, or copayments, are automatically forwarded to the Medigap plan. This automated “crossover” process ensures that the Medigap plan receives the claim information directly from Medicare. The Medigap plan then pays its share based on the specific policy’s benefits, without conducting a separate review for medical necessity or requiring prior authorization. While Original Medicare does not require prior authorization for most services, it does have specific instances where it is required, such as for certain durable medical equipment or some hospital outpatient department procedures. In these cases, the Medigap plan still pays its share only after Original Medicare has granted its approval, not requiring an additional authorization process itself.

Prior Authorization in Other Medicare Coverage

Prior authorization is a more common feature in other parts of the broader Medicare landscape, particularly with Medicare Advantage (Part C) plans. Unlike Medigap plans, which supplement Original Medicare, Medicare Advantage plans are offered by private insurance companies and serve as an alternative to Original Medicare. These plans incorporate provider networks, cost-sharing structures, and specific prior authorization requirements for a wide range of services.

For example, Medicare Advantage plans require prior authorization for specialist visits, certain diagnostic tests, hospital stays, and specific medical equipment. This is a notable difference from Medigap plans, which operate in conjunction with Original Medicare’s less frequent prior authorization rules.