Permission denied: Why prior authorizations aren't going away

Need a mortgage approved to buy a $400,000 house in less than an hour? Done. Want specialty pet food delivered to your door by tomorrow? No problem. Moving money between accounts at a bank? Instantaneous.

Need your patient to switch from Coumadin to Lovenox because they have surgery in three days? Sorry, there’s no way the prior authorization will be approved in time. Just have the patient reschedule and put their health at risk.

Physicians continue to wonder how we can live in a world where so many transactions are handled quickly with technology, yet decisions that affect patient health are slowed by faxes and bureaucracy, even when there is only one clear treatment option.

Why in 2021 is medicine moving at the speed of fax? Where is the progress?

In 2018, a consensus group made up of all the major medical associations and America’s Health Insurance Plans (AHIP), the industry trade group for payers, agreed on several principles on how prior authorizations should be handled and how they could be improved.

“We’ve been measuring progress against those principles, and it’s been slow at best,” says Anders Gilberg, senior vice president, government affairs, at Medical Group Management Association (MGMA). “2020 is a bit of an anomaly, but overall, there has not been significant movement toward simplifying things with the health plans as outlined in documents.”

Among the goals the group agreed to was establishing a national standard for how prior authorizations are handled and transmitted, a transparent list of services that require them, and a review of need when more than 90% of authorizations are approved.

CAQH, a nonprofit alliance focused on streamlining health care, tracks the progress of electronic prior authorizations. April Todd, a CAQH senior vice president, says that prior authorizations have the lowest electronic adoption rate of any transaction in the health care field, but there are some signs of improvement. In 2019, the most recent year studied, electronic prior authorizations increased from 13% to 21%. “We are seeing some improvement, but it is still the lowest in the industry,” Todd says.

Richard Bryce, D.O., a family medicine physician and chief medical officer for the CHASS Community Health and Social Services Center in Detroit, says he seen some improvement in the prior authorization process in recent years, mainly in the use of computer-submitted data, but that there is still a long way to go.

“The potential for doing something online is definitely an improvement, but we’re just still running into the same problem: how do you determine what’s covered and what’s not?” Bryce says. “The problem with a lot of insurance companies is they change what’s on their formularies, and one day the insulin NovoLog is covered and then next day it changes to Humalog, and now the patient has to switch and it’s very confusing. And if you want to keep them on the same one, you have to put in the prior authorization, and the insurance company wants them to try the other one first.”

Bryce says the biggest drawback to not knowing immediately to what drugs are approved is when he has given a patient detailed instructions for a specific drug, but then the pharmacy tells the patient it’s not covered. This starts a long cycle of the patient having to call the office, a new prescription being written, new instructions given and the patient returning to the pharmacy.

“Now you’ve wasted a week or two figuring this process out when a patient needed the medication to take care of their ailment,” Bryce says. “The process should be easier.”

Why is prior authorization
so difficult?

The reasons why prior authorizations are so frustrating to physicians are varied, but the lack of a unified technology standard is a major obstacle to fixing the problem.

“Health care vendors are the intermediaries that help exchange information between plans and providers, and they’ve been reluctant to put solutions in place because a federal standard for exchanging that information has not been set by CMS (Centers for Medicare & Medicaid Services) yet,” Todd says.

Companies are leery of investing a lot of money in a product that might be rendered worthless overnight if a federal standard emerges that is different than what they created.

At the end of 2020, CMS released a rule that attempted to standardize some aspects of the prior authorization process. But the rule was rushed, excluded large swaths of insured patients and was widely panned by physician groups, hospitals and insurers.

“What a missed opportunity this was,” Gilberg says. “If you are trying to move the dial on some degree of standardization, you can’t choose a handful of plans and not have them apply to bigger actors.” The Biden administration is reviewing the rule and the pandemic is likely to slow any progress, but Gilberg says he is hopeful for congressional support for future prior authorization standardization.

Without standardization, health care vendors are left either implementing their own standards, which won’t necessarily interface with other vendors or health systems, or waiting until a national standard is put in place.

Todd says that portals illustrate the problem. Portals are great for getting information into electronic form, but providers might have to log into 30 or 40 different ones to exchange information.

“That’s an increased burden for providers,” Todd says. “Even when CMS comes out with a standard, there still needs to be encouragement for the entire industry to adopt it, and that often takes a number of years to do that.”

Ultimately though, it’s up to payers whether to adopt any standards or to accept electronic prior authorizations using either third-party software or their own platform.

AHIP put together its Fast PATH initiative, a demonstration project that illustrates the efficiencies and potential cost savings a totally electronic solution can offer payers.

“From the request time to the answer, it’s much, much, much faster,” says Kate Berry, AHIP’s senior vice president, clinical affairs and strategic partnerships. “That’s good news for the provider, the patient and the health plan ... Everybody is happy when a process using phone calls and faxes that can take days can now take seconds or a few hours to get an answer.”

But the project isn’t a required component for members; it’s just a way for AHIP to show how they could proceed in the future.

Berry says information about prior authorizations that physicians want is often already available through electronic health records (EHRs), especially on the prescribing side, yet not all physicians are using it.

“There should be support for providers to adopt that, because a lot of health plans have already invested in making their data on what services are subject to prior authorization available electronically, along with what information needs to be provided to support it,” Berry says. “You can send them the information, but if they don’t receive and use it, then we’re not getting the full benefit from it.”

Gilberg points out that the lack of a standard puts all the burden on the doctor. “Health plans send them to a third party or use their own portals,” he says. “A physician might have contracts with 20 to 30 health plans, each with their own payment rules, their own rules on how to get services and how to get things approved. Each plan has their own way of doing things, and it’s extremely burdensome.”

He says ideally every physician would be able to transmit all clinical information using their EHR via one standard for all health plans. “I’m not saying there shouldn’t be any prior authorizations, but what I am saying is that the number can be reduced if we standardized the process and didn’t have 20 different systems.”

The time spent trying to navigate health plans’ proprietary systems is time not spent with a patient, Bryce notes. “Do you want me to spend five minutes focusing on improving the patient’s health or spend it going to a website to figure out if Humalog is covered or not?” he says. “The formularies also change so often and that’s part of the frustration. Do I have to check this every single time or can I use my own experience?”

He adds that even having some way of expediting a case in a timely manner would benefit patients and physicians. “If the patient can’t get the drug, that actually can cause safety issues, and there’s no doubt the insurance company wants drugs to be safe and wants people to not have health problems because that decreases costs for them as well,” Bryce says. “But there is no way, at least that I’ve seen, that I can get a prior authorization expedited.”

Who ends up paying for improvements to the prior authorization process is an open question. If a standard is created that allows a doctor to do everything through the EHR, no one knows if it would be at an additional cost. EHR vendors tend to charge for every add-on, and the programming required for a prior authorization update is a significant investment in time and money. Even if physicians finally get a better process, experts say they may have to pay to use it, assuming their particular EHR adopts the standard.

Who has an incentive
to change the system?

For sweeping change to happen, there needs to be an incentive for all involved. Gilberg says that private payers are reluctant because they have already invested in technology solutions of their own, so moving to a new system would be costly.

“Many plans are investing in electronic processes to make this whole process more efficient,” Berry says. “Just like we all use electronic tools every day in our routine activities, health plans are very committed to these types of technologies, and I think providers are, as well. It just takes time to fully adopt it and make it work really well.”

AHIP says that prior authorizations are necessary for patient safety and to confirm standards are being followed and the best care is being provided.

But Bryce says although part of that may be true, there is an incentive to use prior authorizations because then they won’t have to cover as many medications to save money. “I think the patients are the ones who get burdened the worst when you have to go through this process,” Bryce says. “But what’s the incentive for the plans to do it in a quicker way? I know a lot of doctors who don’t even do any prior authorizations at all because they don’t feel like it’s worth their time. And often, it can come back declined or denied.”

He hopes that the technology will create enough incentive for the health plans cost-wise that they will adopt it and reduce the burden on providers and patients.

“Money is the biggest issue or they wouldn’t be switching their formularies all the time,” Bryce says. “Why do I need to switch from Humalog to NovoLog, and one’s going to be covered and one we need a prior authorization? It can be very confusing for physicians, but if it’s confusing for us, think about how confusing it is for patients.”

If prior authorizations are about improving outcomes and saving money, then there’s a possibility that data-driven value-based care contracts could render them moot.

In value-based care, physicians are constantly measured on costs, utilization and outcomes. “Physicians are incentivized financially to not overutilize services, and if their cost profile goes up, they won’t get the incentive,” Gilberg says. “This makes prior authorizations completely redundant, and it could significantly reduce administrative costs.”

This would provide both physicians and health plans with incentives to reach the same goals, he says. At the very least, he says, health plans, which are very knowledgeable about every physician’s cost profile, should use that data to streamline the prior authorization process, regardless of the type of contract they are on.

“A doctor who has 100% of their requests approved on a regular basis shouldn’t have to go through it each time,” he says.

Where will prior
authorizations be in 5 years?

The only thing that’s certain about the future of prior authorizations is that they aren’t going away.

“It’s really an important tool to promote patient safety, quality and more-affordable care,” AHIP’s Berry says. “But hopefully in the next five years, electronic prior authorizations will grow and make it less burdensome for everybody, and people can get safe, effective care that’s affordable without having to worry about so many phone calls and faxes.”

Todd expects the data from 2020 to probably not show much of an increase in electronic prior authorizations because of the pandemic, but she is hopeful it will really start to accelerate in the next couple of years.

“I am hoping we are at least double of where we are today in terms of adoption,” Todd says. “I’d like to say more than that and see the industry really accelerate things, but just knowing the history of how these things work, I don’t want to be too optimistic. But in five years, I’d like to see at least 50% of our prior authorizations moving electronically in close to real time.”

Gilberg says MGMA will continue to push for legislative changes to improve the situation and hopes technology will keep making it better. “With the technology available today, and hopefully we’ll have more alignment with consumers in terms of making it easier and simpler, my hope is that the next five years will be different than the previous five. We ask physicians every year what their major frustrations are, and prior authorizations keep rising to the top.”

As for Bryce, he’ll take whatever improvements to the process he can get to help his patients.

“Safety is an important thing, so having somebody reviewed through this process is good, but when it comes down to it, money is the biggest issue,” he says. “I get that’s part of how they survive, but I just hope that as we go forward we can make this process easier so that more people can get the right drugs and not have to deal with these challenges that probably shouldn’t occur, even though they still do.”