Prior authorization is a common strategy that insurance companies use to manage or limit access to certain drugs, treatments, tests, and other medical services. The process requires physicians to obtain pre-approval for procedures or services ordered as part of the patient’s treatment. PA has to be obtained before services are delivered, failing which the claim will be denied. Many providers rely on an insurance authorization company to manage this time and resource consuming task. These companies have staff who specially trained to work with insurance companies and can simplify the process.

AMA Survey Points to Need for Industry-wide PA Improvements

Recent reports indicate that PA is affecting physicians’ ability to provide proper care. Conventionally, health plans used PA to check access to newer, expensive services and medications. However, in a recent survey conducted by the American Medical Association (AMA), physicians reported an increase in prior authorizations to include requirements for even drugs and services that are not new or costly (www.ama-assn.org). Up to one in three respondents said that PA was responsible for a serious adverse event.

Conducted online in December 2018, the AMA survey covered U.S. based physicians who provide at least 20 hours of direct patient care and complete PAs during a typical week of practice. Of the total respondents, 40 percent were primary care physicians and 60 percent were in other specialties. The main findings of the survey can be categorized under two heads: PA’s impact on care and its administrative burden.

  • Negative Impact on Care
    • More than 9 in 10 respondents reported PA had a significant or somewhat negative clinical impact.
    • 28 percent reporting that PA had led to a serious adverse event (death, hospitalization, disability or permanent bodily damage, or other life-threatening event) for their patient.
    • 91 percent think that PA delays patients’ access to care.
    • 75 percent believe that PA can lead to patients discontinuing their treatment.
  • High turnaround time from health plans was reported to be a key reason for delays in providing care:

    • 65 percent of physicians reported waiting an average of one business day for a prior-authorization decision from a health plan.
    • 26 percent reported waiting a minimum of 3 days.
    • 7 percent reported waiting an average of more than five days.
  • Increased Administrative Burden
    • 86 percent of the physicians found the administrative burden associated with PA to be “high or extremely high”.
    • 88 percent said the burden had increased over the last 5 years.
    • Physicians processed an average 31 PAs per week, with this workload taking up almost two business days of physician and staff time.
    • Up to 36 percent reported that their practice has staff dedicated exclusively to PA.

AMA Board of Trustees Chair Jack Resneck Jr., MD reiterates that the AMA is committed to removing the obstacles and burdens that interfere with patient care.

“The time is now for insurance companies to work with physicians, not against us, to improve and streamline the prior authorization process so that patients are ensured timely access to the evidence-based, quality health care they need,” says Resneck.

Study: PA Requirements for Patients with MS Increasing

EurakAlert recently reported on a new study by researchers with OHSU and the OHSU/Oregon State University College of Pharmacy in Portland, Oregon which found trends in insurance coverage that restrict access and burden Medicare patients with multiple sclerosis (MS) with increased out-of-pocket cost to patients. According to the study, rates of pre-authorization have increased from 61 percent in 2007 to as high as 90 percent in 2016.

The authors note that MS involves many chronic conditions whose treatment increasingly involves the use of high-cost specialty drugs that are often strictly managed. They point out that narrowing options stresses patients and that providers should have access to all therapies because the effect varies from patient to patient.

Failed Preauthorizations – A More Pressing Concern

When a failed authorization occurs, it puts a temporary halt on the prescribing or treatment process. Practice Suite describes various scenarios involved in turning the denial into an approval:

  • The physician may have to submit more information or fuller documentation.
  • The physician may have to call the insurer’s medical expert to explain the need for a certain prescription, procedure, or piece of medical equipment.
  • The insurance company may require the patient to go through a separate process known as step therapy, which takes a few days to complete. The product or treatment will be approved if the prescription matches the criteria.

Having Experts Manage PA can Speed the Process

Having prior authorization handled by a reliable insurance authorization company can speed the process and prevent denied claims. Experts in insurance authorization can ensure prior authorizations with the right procedures and codes, which in turn, will speed up the approval process.

Experienced medical billing outsourcing companies have insurance verification and authorization experts onboard who are well versed in the rules of medical necessity requirements. They have expertise in managing prior authorization for inpatient and outpatient surgeries, hospital admissions, and diagnostic imaging. Along with their skills in CPT and ICD-10 coding, they also have extensive experience with government and private payers across all the states. Having an expert manage the PA process can minimize delays in the delivery of care, help reduce the costs of care, and, prevent claims denials and reduce administrative burdens that reduce time for patient care.