One of the administrative challenges that physicians have to deal with is obtaining prior authorizations for prescriptions and testing. This has led to an increase in the demand for insurance authorization services in recent years. Prior authorization is major problem in the delivery of dermatology care. In May 2019, MDEdge reported on a study which found that prior authorizations for dermatology care at the University of Utah nearly doubled in the last two decades.
Prior authorization is a process which requires physicians to obtain prior approval before delivery of a specific treatment or service in order to qualify for payment. Health plans maintain that insurance authorizations protect patients by ensuring that the prescribed treatment is safe, medically necessary and appropriate. However, an American Medical Association (AMA) survey of 1000 practicing physicians showed that payers’ prior authorization requirements delay treatment, have a negative impact on clinical outcomes. and lead patients to abandon treatment.
Previously, health plans utilized prior authorization for newer, costly services and medications. However, in recent years, physicians report that most prior authorizations are for drugs and services that are neither new nor expensive.
Insurance Authorizations a Major Roadblock in Dermatology
The University of Utah study provided the following evidence of the increasing burden of prior auths in dermatology:
- In September 2016, one prior authorization was required for every 15 patient visits (6.7%) over a 30-day period. In comparison, in September 2018, one prior authorization was required for every 9 patient visits (11.1%) over a 30-day period.
- The number of clinic visits during September 2018 was 2.4% higher than in September 2016 (9,743 vs. 9,512), and the volume of prior authorizations increased by 73.8% (1,088 vs. 626).
- In one case, 81% of the reimbursed cost for a patient visit was spent seeking a prior authorization.
- The time and cost burden (on a per-visit basis) was the highest for prior auths for biologics.
- Nonbiologic medications had the highest proportion of denials (25%).
A recent report in Practical Dermatology summed up the views of dermatologists on the prior authorization process:
- The number and types of drugs needing prior authorization is increasing and constantly changing.
- Health plans’ formularies are widely variable, and the associated processes have become more difficult.
- Dermatologists often have no idea of the clinical rationale for insurance authorization or why a drug/service is denied.
- A PA request may be denied even after provision of the requested documentation.
- In some cases, the drug approved by the plan as a first-line therapy might be outdated, ineffective, or even unsafe for the patient.
- Many plans continue to have inefficient and time-consuming prior auth processes and communications, leading to delays.
- Dermatologists being required to prescribe on-formulary medications (for conditions such as psoriasis, atopic dermatitis, and acne) that are outdated, unsafe, ineffective, or medically inappropriate for the patient.
- Lack of a proper process or designated contact person for discussing PA denials and/or lack of information provided to the dermatologist by a plan.
- Problems in obtaining approval to use non-FDA indicated medications for pediatric patients.
It can happen that a drug that the physician prescribes is the one that would really work for a complex skin condition, but the insurance company may not cover it (www.goerie.com).
The insurance authorization process requires time and resources, and also impedes timely and efficient provision of care. In an AMA survey, more than 60% of physicians said they needed to wait at least one business day to complete prior authorizations, while 30% said they have had to wait three business days or longer.
Impact on Patients
Prior auths can be extremely frustrating for patients. The AMA cited dermatologist and health policy expert Jack Resneck Jr., MD as saying that, due to the rapidly changing requirements and the number of health-plan drug lists, physicians may not know which insurers will require PA for a given medication in a particular patient. As a result, the insurance authorization process often begins when a patient is told by the pharmacist that their medication requires further approval. He said that his patients faced long delays to receive their medication, which left their condition untreated. Consequently, patients had to make additional trips to the pharmacy.
Patients whose treatment requires prior auth often abandon their recommended course of treatment. Nearly 80% of the physicians in the AMA survey said that prior auth issues led patients sometimes, often or always to abandon the recommended test or treatment.
Strategies to Overcome Prior Authorization Hurdles
Both the AAD and the AMA are working towards improving the efficiency of the prior auth process. The American Academy of Dermatology (AAD) offers several tools, including templated prior auth letters, to address drugs commonly requiring PA. The AAD also provides resources to help dermatologists communicate with patients about why PAs occur and about possible treatment-access delays.
Experts recommend standardizing processes for handling prior authorizations. Physicians also need to collaborate with health plans to build a more efficient prior authorization process. They should communicate effectively with patients regarding prior authorizations. Physicians should explain to patients that coverage for some medications, tests, and referrals are dictated by the insurance. If prior auth is required, they should educate the patient on the process and the possibility that the authorization will take time and that there may a delay in care. They should also explain that coverage may be denied.
Having pre-authorizations handled by experts is a practical solution. Insurance authorization companies have trained staff skilled in CPT-ICD coding and well versed in the rules of medical necessity requirements and each payer’s requirements, including deadlines, documentation, etc. Experts can handle prior authorization for inpatient and outpatient surgeries, hospital admissions, diagnostic imaging and more. With their expertise in the field, insurance verification and authorization experts can help practices improve workflow, drive higher reimbursement, reduce denials, and improve patient satisfaction and retention.
Julie Clements, OSI’s Vice President of Operations, brings a diverse background in healthcare staffing and a robust six-year tenure as the Director of Sales and Marketing at a prestigious 4-star resort.