Well, that’s not going to work in the context of healthcare coverage and reimbursement. Where an insurance company requires a provider to obtain a pre-authorization before performing and billing a procedure, the “mother, may I?” is mandatory. The fact is that pre-authorizations are becoming more prevalent as payers seek new strategies to reduce outlays. An unfair accusation? Maybe, but as a revenue cycle management company, we labor daily in the trenches with insurance companies that employ a clever array of methods to deny, delay and dispute payment for services. The imposition of pre-authorization requirements for certain procedures is just one more arrow in the insurer’s quiver of obstruction. At least that’s the way it might appear to many.
The Practical Problems
A 2022 American Medical Association (AMA) survey found that 88 percent of surveyed physicians reported that prior authorizations put a “high or extremely high” burden on their practice, with practices completing an average of 45 authorizations per physician each week. According to FMP, a peer-reviewed journal published by the American Academy of Family Physicians, this high volume of pre-authorizations requires physicians and their staff to take valuable time away from patient care to make phone calls, wait on hold, obtain and fill out forms, collect and submit medical documents and appeal denials. Some practices have to hire additional staff just to handle these add-on tasks.
For certain types of practices, the median value of all the time spent interacting with health plans is nearly $48,000 per physician each year. There is also the issue of delayed care. Wading through the red tape and waiting for approval can eat up critical time that could have been spent on actual patient treatment. And it’s not just procedures that are being affected. Prescribing and dispensing vital medications are also subject to the pre-authorization process. The AMA addressed this topic last year, pointing out the particular burden physicians are facing relative to drugs. They gave an example of one doctor who explained his experience thusly:
A majority of the prescriptions I write now are for things that some health plans are requiring us to go through this arcane process to get permission to use. Prior authorization has been around for decades, but it's really been in the last several years that physicians and patients have seen it massively expanded—even to cover generics.
Addressing the issue in a June 12 news release was U.S. Senator Roger Marshall, MD of Kansas, who said: "Prior authorization is the number one administrative burden facing physicians today across all specialties.” With that established, are there any solutions to this problem?
Meeting the Challenge
There may be some positive signs for a bit of relief when it comes to at least one payer: Medicare Advantage (MA). A group of U.S. lawmakers have introduced legislation aimed at reforming the MA prior authorization process. According to one news source, the bill is sponsored by 130 members of the U.S. House of Representatives and 42 U.S. senators. Included within the legislation are the following provisions:
- Establish an electronic prior authorization process for MA plans including a standardization for transactions and clinical attachments.
- Increase transparency around MA prior authorization requirements and its use.
- Clarify the HHS' authority to establish timeframes for electronic prior authorization requests, including expedited determinations, real-time decisions for routinely approved items and services, and other prior authorization requests.
- Expand beneficiary protections to improve enrollee experiences and outcomes.
- Require HHS and other agencies to report to Congress on program integrity efforts and other ways to further improve the electronic prior authorization process.
In January, the Centers for Medicare and Medicaid Services (CMS) finalized a rule to streamline the prior authorization process and improve the electronic exchange of health information. The requirements generally apply to Medicare Advantage organizations, state Medicaid and Children's Health Insurance Program agencies, Medicaid managed care plans, CHIP-managed care entities and qualified health plan insurers on the federally facilitated exchanges. Beginning primarily in 2026, certain payers will be required to include a specific reason when denying requests, publicly report certain prior authorization metrics and send decisions within 72 hours for urgent requests and seven calendar days for standard requests.
Of course, this rule and the above-referenced proposed legislation may not affect every payer and may not kick in for another couple of years. So, what do providers do in the meantime? Here’s an example of what you shouldn’t do. We believe it would be a mistake, from a compliance perspective, to force your insured patients to agree to pay out of pocket for services that require a prior authorization, just to avoid the headache of obtaining approval. That doesn’t really meet the standard that would trigger the use of an ABN (advanced beneficiary notice) or similar waiver of liability form. Instead, providers are encouraged to hang in there and wait for the cavalry to arrive. The government knows this is a growing issue; they are in the process of addressing it; and, hopefully, there will be a more comprehensive solution put forth in the same way surprise billing was addressed by the federal No Surprises Act. In the meantime, make sure you add your voice to the debate by contacting your representatives in Congress, state insurance commissions and medical societies. There should be a balanced approach that upholds payer efficiencies, reduces the provider’s administrative burden and safeguards the patient’s access to medical care.