Health insurance carriers require prior authorization (PA) as a condition of payment for many services. Payers use PA to determine if certain medications, products, treatments or services are medically necessary before they are prescribed/rendered to beneficiaries. However, the PA process poses an administrative burden for physicians’ offices and managed care organizations, and affect patients by delaying needed care. Many providers rely on insurance authorization companies to make the process as efficient as possible. In fact, such support is extremely significant now as payers are demanding prior authorization for patient care even as the COVID-19 pandemic continues, according to a recent health leaders report. Though some payers had relaxed their PA requirements in response to the COVID-19 pandemic, many resumed their PA policies as the pandemic wore on.

New AMA Survey reveals Prevailing Prior Authorization Issues

In a new survey by the American Medical Association (AMA), 94% of physicians reported that PA demands caused care delays, and 79% said patients abandoned treatment because of authorization issues with insurers. The survey was conducted in Dec 2020 and covered 1000 practicing physicians. The other key findings of the report are as follows:

  • 90% of physicians said that PA programs have a negative impact on patient clinical outcomes
  • 30% reported that PA requirements led to serious adverse events for patients in their care
  • 85% said the burdens associated with PA were high or extremely high
  • Only 15% of physicians reported that PA criteria were often or always based on evidence-based medicine

ACR’s Recommendations on Prior Authorizations

In March 2020, the American College of Rheumatology (ACR) made several recommendations to reduce PA requirements and improve access for patients. The recommendations included:

  • Reducing the number of clinicians subject to PA requirements if they are following evidence-based practices and meeting performance measures and other requirements
  • Reducing the number of services and medications that require PA by regularly reviewing and removing unnecessary requirements
  • Improving transparency and channels of communication between payers, patients, and clinicians
  • Protecting continuity of care when changes occur in coverage, payers, or PA requirements, and
  • Accelerating adoption of national electronic standards for PA and improving transparency around formulary decisions and coverage restrictions

The Centers for Medicare and Medicaid Services (CMS) finalized a new rule in January 2021 in an effort to streamline the PA process and improve data transparency for providers, payers, and patients.

The rule will provide certain payers, providers, and patients with electronic access to pending and active prior authorization (PA) decisions. According to CMS, the new rule will:

  • give providers more time focus on providing better quality care
  • promote secure electronic access to data
  • drive interoperability
  • empower patients
  • reduce costs
  • ease the burden on the health care system

Under the new rule, designated payers will have to implement application programming interfaces (APIs), allowing providers to access data through integration with their electronic health records. This data will include claims and encounter information, including laboratory results and data on any pending and active PA decisions.

This is expected to improve the health care experience for patients as APIs will ensure that their providers will have a more complete information about their care. APIs will also allow patients to access their health information more easily.

In a statement released first week of April, CMS stated that recognizing the challenges faced by payers during the COVID-19 public health emergency, the agency will not enforce the new policies and requirements for technology for interoperability and burden reduction until July 1, 2021.

The AMA’s 2020 survey found that medical practices were significantly impacted by the prior authorization burden. Practices complete an average of 40 prior authorizations per physician, per week, which takes up two business days (16 hours) of physician and staff time.

The AMA notes that these findings point to the need to streamline or eliminate low-value prior-authorization requirements to minimize delays or disruptions in care delivery.

“Delayed and disrupted treatment due to an archaic prior authorization process can have life-or-death consequences for patients, especially during a public health emergency,” said AMA President Susan R. Bailey, MD. “This hard- learned lesson from the current crisis must guide a reexamination of administrative burdens imposed by health insurers, often without any justification,” she said.

How Outsourcing Prior Authorization can Help

Insurance authorization services can alleviate the stress of prior authorization for patients and providers. An insurance authorization company will have a team of insurance verification specialists who will work with practices to:

  • Ensure that claims for treatments or services that require PA are submitted promptly
  • See that PA requests meet all of the payer’s criteria before submission
  • Minimize submission hassles and eliminate duplicate procedures

These companies have a streamlined, centralized process in place which minimizes errors. They also have experience working with all government and private insurers. Partnering with an expert helps practices will save time and resources required for getting prior authorizations and reduce risks of denials, benefiting both physicians and patients.