Prior authorizations: Containing costs or obstructing health care?

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Changes could be coming for the prior authorization process that physicians and patients love to hate.

On Feb. 22, four experts shared their insights about prior authorizations (PAs) as part of the KFF Health Wonk Shop, an online gathering to discuss various policies and aspects of health care. The most recent one was “Prior Authorization in Health Insurance: A Needed Tool to Contain Costs or an Excessive Barrier to Needed Care?”

“The fights over prior auth are reminiscent of the backlash against HMOs in the 1990s,” said Larry Levitt, KFF executive vice president for health policy. He referred to health maintenance organizations that became unpopular due to health care access. “And like then, policymakers are started to get involved with regulations and oversight. And, as with so many things these days, AI (artificial intelligence) may solve some of the problems with prior auth, but also create new ones.”

There for a reason

Prior authorizations exist due to the goal of reducing the amount of ineffective care provided to patients. In the United States, estimates of ineffective care range from 15% to 30%, said Troyen Brennan, MD, adjunct professor of health policy and management at Harvard’s T.H. Chan School of Public Health. Brennan also is a former executive at CVS Caremark and Aetna.

“From the point of view of the practicing doc this is just a source of great frustration,” Brennan said. “On the point of view of the insurance company, especially the chief medical officer office, there's just a lot of unnecessary stuff that's happening out there that doesn't fit with what you consider to be sort of reasonable practice guidelines.”

Insurance companies identify places where there may be overutilization, then design a program based on branching chain logic, Brennan said. For example, considering bariatric surgery, the insurer will ask of the patient has a body mass index greater than 30 and if they have tried dieting for six months. If the answer to both questions is yes, the surgery can be approved from the insurer’s point of view, he said.

The average insurer will probably see 5% to 7% savings from a prior authorization program, he said.

Delaying patient care

But the process also delays care, said Fumiko Chino, MD, a radiation oncologist at the Memorial Sloan Kettering Cancer Center.

“I'm a treating radiation oncologist, which means I deal with people with cancer, and cancer biology doesn't wait for a bureaucracy,” Chino said. “And I think that's really the problem that we faced with in our clinic for people who have sometimes very fast-growing cancers.”

Even appropriate PAs create delays to care that can affect patient outcomes, sometimes catastrophic outcomes, apart from wasted efforts by clinic staff and frustration for physicians that can contribute to burnout, she said.

Chino derided step therapy, insurers’ requirements for patients to fail progressive treatments before getting to a treatment the physician believes will work. She praised an advance in the denial appeals process, because she frequently deals with a peer radiation oncologist instead of a physician who does not regularly treat cancer. Those peer reviewers have not denied care, and it appears they want the best for patients just like the treating physician does, she said.

The PA process can be frustrating for patients – and costly, when a patient in pain and waiting for PA for a medication ends up going to the emergency department, said Anna Schwamlein Howard, principal for policy development for the American Cancer Society Cancer Action Network.

Patients feel powerless and delays affect everybody involved in the process, such as employers and childcare providers when cancer patients must reschedule treatments due to delays, Howard said.

Brennan noted there are surveys of physician feelings about PAs, but not much data about actual harm to patients. Insurers have published their criteria for acceptable care, he said, noting that drug approvals may be easier than procedures because procedures don’t have randomized controlled trials and labels saying what indications are.

Rules in place

Private insurance plans are regulated for PA requests – seven days for expedited requests and 14 days for typical requests for procedures, and 24 hours to three days for drugs – and insurers do pay attention to those or face fines through the federal Employee Retirement Income Security Act, Brennan said. That law governs voluntarily established retirement and health plans in private industry, according to the U.S. Department of Labor.

It is reasonable to continue some PAs, but insurers know they are facing pushback from legislators, patients and doctors, he said.

The U.S. Centers for Medicare & Medicaid Services (CMS) this year issued rules seeking to streamline the PA process, making it faster to avoid delays. Those rules apply to Medicare Advantage, not private insurance, state-based marketplaces offering insurance per the Affordable Care Act, or prescription drugs, said Kay Pestaina, KFF vice president and director of the program on patient and consumer protection.

Discussion also touched on appeals when prior authorization is denied and gold-carding, reducing or eliminating PAs for providers that typically do not submit for things the insurance company would consider ineffective.

Technology to the rescue?

Pestaina and Brennan noted the CMS rules will involve technology with a PA application programming interface (API) that can automate prior authorizations. The new CMS rules on at least 50 occasions states that the Office of the National Coordinator for Health Information Technology, known as ONC, must do its part with electronic medical records (EMRs). The PA process could be automated today through an API based in Fast Healthcare Interoperability Resources, with the API interrogating the EMR and making a decision immediately, Brennan said.

Levitt followed up on Brennan’s description of an API querying electronic medical records in an automated process, by asking whether Chino’s office technology included a facsimile machine.

Chino noted she has a linear accelerator that fires electrons and uses tungsten to shape radiation to people’s bodies for treatment. Prior authorizations are not that high tech.

“We fax all the time. It’s insane,” Chino said. “The technology requiring faxes is so frustrating, and the fact that we still have to fax things is, seems bananas.”