Forbes Innovation Healthcare How Health Insurance “Prior Authorization” Works. And How To Fix It Jesse Pines Contributor Opinions expressed by Forbes Contributors are their own. Expert in healthcare innovation and wellness. Following Mar 23, 2024, 07:30am EDT Share to
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Twitter Share to Linkedin Health insurer prior authorization has increased considerably in recent years. A result is that ... [+] patients experience delays in care and doctors often spent considerable time and energy justifying their patients' care. State-level policies have started to address the problem, and reducing administrative burdens. Getty Images Picture the last time you went to the doctor. If you needed a new medication or expensive test, chances are your health insurance company tried to restrict it. If so, your doctor needed to spend considerable time explaining your care to your insurer. You may have experienced a treatment delay. At worst, maybe you never received care. Welcome to a process called “ prior authorization .” It’s how insurers tamp down on costs. Originally created to review the necessity of expensive, experimental procedures, today it results in blocking all kinds of care. It’s also increasing in frequency, according to a recent study . What Is Prior Authorization? Prior authorization is used by insurers to determine the necessity of medical services before they’re delivered, like MRIs and expensive
cancer drugs. When prior authorization is used, your doctor must justify your case by communicating clinical information with your insurer. This takes loads of time. The process is opaque. Doctors commonly employ multiple staff to navigate prior authorization. On the other end, an insurance company doctor determines whether they’ll pay. Yet the reviewing doctor might not even share the same specialty with your doctor. For example, a neurologist might be the decision-maker on whether your insurance company pays for an expensive cancer drug. About 11% of prior authorization requests initially are rejected, yet 82% of those are ultimately reversed. All this rejection and reversal creates delays, friction in the system, and increased costs . Prior authorization also impacts hospitalized patients who often await prior approval before nursing home placement. When delayed, this creates a logjam. Tying up hospital beds with dischargeable inpatients worsens boarding in the emergency department where sick, admitted patients wait for hospital beds in unsafe conditions . MORE FOR YOU iOS 17 4 1 Update Now Warning Issued To All
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Artificial intelligence in prior authorization. This past summer, the insurance giant Cigna was sued for using an AI-algorithm to automatically reject services that were never reviewed by their doctors. United HealthCare faces a similar lawsuit . A recent
British Medical Journal study reported on prior authorization policies in the top five Medicare Advantage plans, which are run by for-profit insurers for government-funded Medicare patients. Across the five plans, between 17% to 33% of physician payments required prior authorization. About a third were cancer drugs, which are often time sensitive. Delays in cancer treatment can lead to patients getting sicker or dying . What Can Be Done To Fix Prior Authorization? The
American Medical Association has advocated for legal and policy fixes. Some are being implemented. For example, the Centers for Medicare & Medicaid Services (CMS) released rules to electronically streamline prior authorization. While 90 bills have been introduced in 30 states, only New Jersey,
Washington, D.C., and Tennessee have enacted comprehensive reform. New Jersey’s law involves commonsense changes and takes effect in 2025. It requires that responses to prior authorization be timely. Insurance companies must also share information about how often they deny care and their reasons. Public information on this will be vital so people can understand how their plan works. New Jersey’s law also requires that denials involve a same-specialty physician, increasing the chance decisions are medically correct. It also requires that prior authorization be valid for a year, so doctors spend less time on renewals. Additionally, when patients change coverage, prior authorization from a previous plan must be covered by the new plan for 60 days to allow time to renew the approval so people don’t lose medication access. So what can you as a patient do? First, familiarize yourself with your plan’s prior authorization requirements. Second, if your care requires prior authorization, maintain close communication with your doctor and insurer to ensure the process doesn’t stall. Third, be proactive with renewals to avoid interruptions in regular care, like medications. Fourth, appeal denials by asking your insurer their reason and if your doctor can supply additional info. Fifth, lean on patient advocates within your health system for help. Or inquire if your insurer has patient support programs. Sixth, if your prior authorization is denied and the appeal likely won’t succeed, it’s time to discuss other options that may not require prior authorization. While the original intention of prior authorization was to reduce avoidable cost, the current situation has created delays in care and added a large administrative burden on doctors. Ultimately, broad scale advocacy will be required to change current prior authorization practices, including supporting legislation at the state and federal level. Follow me on Twitter or LinkedIn . Check out my website . Jesse Pines Editorial Standards Print Reprints & Permissions