Healthcare's prior authorization tug of war

States, physicians and healthcare organizations have all pushed to lessen the burden of prior authorizations on the practice of medicine in 2023.

Eliminating rigid prior authorization requirements has the potential to lower unnecessary spending, save time for patients and physicians and improve access to care, proponents have said. 

In 2022, 39% of physicians spent one to nine hours on prior authorizations weekly, according to Medical Economics' "94th Physician Report." Seventeen percent spent more than 20 hours a week on the task.  

Also, 97% of patients surveyed by the Medical Group Management Association said they experienced delays or denials for medically necessary care because of prior authorizations. 

To combat this, some states and legislators have approved or introduced legislation looking to lighten the administrative burden. In July, Congress sent a letter urging CMS to finalize a federal regulation that would overhaul prior authorization requirements within Medicare Advantage.

​​"We urge CMS to promptly finalize and implement these changes to increase transparency and improve the prior authorization process for patients, providers and health plans, the letter said. "We are pleased that these proposed rules align with the bipartisan, bicameral Improving Seniors' Timely Access to Care Act, which proposes a balanced approach to prior authorization in the [Medicare Advantage] program that would remove barriers to patients' timely access to care and allow providers to spend more time treating patients and less time on paperwork."

At the same time, a bill is under consideration by the California Legislature that would prohibit prior authorizations for any healthcare service if the plan or insurer approved or would have approved not less than 90% of the prior authorization requests a provider submitted in the most recently completed one-year contracted period. It would also authorize plans or insurers to evaluate the continuation of a prior authorization exemption once every 12 months. The bill would also require insurers to provide physicians with an electronic prior authorization process option. 

A report from the American Enterprise Institute found that administrative costs of healthcare, including prior authorizations, are estimated to make up 20% to 34% of healthcare expenditures.

However, there is a reason payers continue to adhere to the practice. The American Enterprise Institute report found that administrative costs of the status quo use of prior authorization are smaller than their spending reductions, suggesting prior authorization restrictions are worth the administrative costs.

To find middle ground, some payers, such as Blue Cross Blue Shield of Michigan, have moved to reduce prior authorization requirements. The insurer announced a new effort to reduce prior authorization requirements by 20%. UnitedHealthcare began its two-phase approach to eliminating prior authorization requirements, which also cuts prior authorizations planwide by 20%.

Cigna Healthcare has also recently removed requirements, cutting nearly 25% of medical services from prior authorization requirements — more than 600 codes. Since 2020, Cigna has removed more than 1,100 medical services with the intent to simplify healthcare for customers and clinicians.

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