Can’t Anything Be Done About Prior Authorization?

By Pete Mercer

March 2024 – The Journal of Healthcare Contracting

Prior authorization is the process by which physicians must obtain advance approval for a device, supply or medication from the patient’s insurance plan to ensure coverage for the recommended service, per the American Academy of Family Physicians. And it’s making family physicians – and a lot of other people – angry.

Many physicians believe it makes the insurer the ultimate arbiter on what medical care should or should not be provided to their patients. They resent that practices must complete prior authorizations via multiple platforms, including web portals, electronic portals, electronic medical records systems, fax, paper forms, and phone calls.

Much of the fuss is due to Medicare Advantage plans. KFF (formerly called the Kaiser Family Foundation) reports that in 2021:

  • More than 35 million prior authorization requests were submitted to Medicare Advantage insurers.
  • The volume of prior authorization determinations varied across Medicare Advantage insurers, ranging from 0.3 requests per Kaiser Permanente enrollee to 2.9 requests per Anthem enrollee.
  • Over 2 million prior authorization requests were fully or partially denied by Medicare Advantage insurers.
  • Just 11% of prior authorization denials were appealed.
  • The vast majority (82%) of appeals resulted in fully or partially overturning the initial prior authorization denial.

Historically, traditional Medicare rarely required prior authorization, and that is still largely the case, according to KFF. But 99% of Medicare Advantage enrollees were enrolled in a plan that required prior authorization for some services in 2022. Most commonly, higher cost services, such as chemotherapy or skilled nursing facility stays, require prior authorization.

Even the Centers for Medicare & Medicaid Services admits the whole process needs fixing. “Providers expend resources on staff to identify prior authorization requirements that vary across payers and navigate the submission and approval processes, which could otherwise be directed to clinical care,” wrote the agency in a proposed ruling in December 2022. “Patients may unnecessarily pay out-of-pocket or abandon treatment altogether when prior authorization is delayed.”

Why so galling?

“In the past, prior authorization was generally used in regard to expensive procedures and medicines,” says Steven Furr, M.D., FAAFP, president of the American Academy of Family Physicians. “It has now markedly escalated so physicians are even having to do prior authorizations for routine tests such as cardiac stress testing and generic medications. This leads to a delay in patient care. It can also sometimes lead to a loss of control of difficult medical problems such as diabetes and hypertension.”

Dr. Furr cites American Medical Association data showing that physicians and their staff spend an average of 13 hours each week completing prior authorizations. “The bottom line is our patients’ medical care and health is being impacted without any proof that most prior authorizations are necessary or needed,” he says.

Anders Gilberg, senior vice president for government affairs for the Medical Group Management Association, says “the increase in utilization of overly burdensome prior authorization requirements by health plans leaves medical groups struggling to ensure patients continue to maintain access to medically necessary care. Medical groups cite delays in prior authorization decisions for routinely approved items and services, and inconsistent payer payment policies as their top challenges.”

In its 2023 Annual Regulatory Burden Report, published in November, MGMA reported that 97% of its members report that their patients had experienced delays or denials for medically necessary care due to prior authorization requirements. Ninety-two percent report that their practice had to hire or redistribute staff to work on prior authorizations due to the increase in requests.

“While prior authorization requirements are onerous for all types of practices, certain specialties are subject to more prior authorization requests, namely because of the high expenses tied to their treatments,” says Gilberg. Specialties that face the highest rates of prior authorization are radiation oncologists, cardiologists, and radiologists.

“Primary care also bears a significant brunt of the burden of responding to prior authorization requests from insurers,” he says. “When making referrals/orders for specialty care, inpatient procedures, ancillary services, and drugs, primary care practices must often justify the request despite not receiving payment for the services ordered or performed. In cases like this, primary care practices bear 100% of the administrative costs.”

In search of solutions

In 2018, five groups signed a “Consensus Statement” on improving prior authorization: the American Hospital Association, America’s Health Insurance Plans, American Medical Association, American Pharmacists Association, BlueCross BlueShield Association and the Medical Group Management Association. In their statement, the groups agreed to:

  • Encourage the use of programs that selectively implement prior authorization requirements based on healthcare providers’ performance and adherence to evidence-based medicine. (Some call it a “gold card” system.)
  • Encourage review of medical services and prescription drugs requiring prior authorization on at least an annual basis, with the input of healthcare providers.
  • Improve communication channels among health plans, healthcare providers and patients; and encourage transparency and easy accessibility of prior authorization requirements, criteria, rationale, and program changes.
  • Encourage sufficient protections for continuity of care during a transition period for patients when there is a formulary or treatment coverage change or change of health plan. (In other words, providers of patients on an approved course of treatment would not be required to go through the prior authorization process when that patient changes carriers.)
  • Encourage healthcare providers, health systems, health plans, and pharmacy benefit managers to accelerate use of existing national standard transactions for electronic prior authorization.

Says Gilberg, “MGMA signed the consensus statement in 2018, alongside several provider groups and health plans, agreeing that selective application of prior authorization, volume adjustment, greater transparency and communication, and automation were areas of opportunity to improve upon. However, since the time this consensus statement was released, medical groups report little progress in any of these areas.”

So the search for solutions continues, much of it coming from the federal government, he says.

Earlier this year, CMS finalized its 2024 Medicare Advantage and Part D rule, which included proposals to rein in detrimental prior authorization practices in Medicare Advantage. “MGMA was pleased that the agency heeded our call to finalize the continuity of care provision, as well as the requirement for MA plans to form Utilization Management Committees,” he says.

MGMA also supports CMS’ proposed Prior Authorization and Interoperability Rule, which would implement a process to facilitate electronic prior authorizations, requiring affected payers to publicly publish aggregated prior authorization data. “Although MGMA’s principal goal is to reduce the number of prior authorization requests, an electronic program, if implemented appropriately, has the potential to alleviate administrative burden and allow practices to reinvest resources in patient care,” he says.

On the legislative front, in July 2023, the U.S. House Ways and Means Committee passed the “Improving Seniors’ Timely Access to Care Act, intended to modernize the prior authorization process in Medicare Advantage. The bill, led by U.S. Reps. Mike Kelly (R-Pennsylvania), Suzan DelBene (D-Washington), Larry Bucshon (R-Indiana) and Ami Bera (D-California) would:

  • Establish an electronic prior authorization process.
  • Require the U.S. Department of Health & Human Services to establish a process for “real-time decisions” for items and services that are routinely approved.
  • Improve transparency by requiring Medicare Advantage plans to report to the Centers for Medicare & Medicaid Services on the extent of their use of prior authorization and the rate of approvals or denials.
  • Encourage plans to adopt prior authorization programs that adhere to evidence-based medical guidelines in consultation with physicians.


Prior authorization: A glossary of terms

Step therapy. A specific type of prior authorization requiring patients to try one or more insurer-preferred medications or treatments prior to implementing a physician recommendation. This tool, primarily designed to contain the cost of prescription drugs, is used for many conditions such as cancer, arthritis, diabetes, skin conditions, heart disease, mental illness, and more, says the American Academy of Family Physicians. (The AAFP believes step therapy protocols “delay access to treatments and hinder adherence while risking severe side effects and disease progression for patients.”)

Continuity of care. Protecting uninterrupted care (i.e., care without prior authorization) to patients in an active course of treatment when there is a formulary or coverage change or change of health plan.

‘Gold card’. Formally referred to as “selective application of prior authorization,” the gold card system would fast-track prior authorization requests from physicians who rank high on quality measures and adherence to evidence-based medicine, or who engage in other contractual agreements, such as risk-sharing.

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