Pay for prior authorizations

Prior authorizations (PAs) from health insurance payers have become a necessary administrative burden for physicians and their staff to provide patient care. There are a number of legislative proposals at the federal and state level to speed up the PA process. Some advocates say the best proposal is financial: Insurance companies and payers should reimburse doctors and their staff for the time they spend applying for approval to treat patients.

under consideration

In May, the American Medical Association (AMA) will convene its CPT (Current Procedural Terminology) Editorial Panel, the board that considers creating, modifying and eliminating codes used to process claims and developing guidelines for care review medical The agenda includes a request for Prior Authorization Services, to establish codes for reporting services by physicians, qualified health plans and staff related to the authorization of payer procedures.

These deliberations may seem arcane, but PA has received national attention as doctors and patients go public with examples of how waiting for approvals is causing delays in care that cause real harm to patients. In March, the News from New York published an opinion video, Denying Your Health Care Is Big Business in America, featuring testimony from doctors and patients about how PAs are a serious drain on medicine. The video went viral in medical circles.

These doctors and patients are not the only ones.

talking with Medical Economy, Megan Srinivas, MD, MPH, an infectious disease specialist in Iowa, described waiting two days to get pre-approval for medical imaging needed for a patient fighting infection in intensive care. David Podwall, MD, a neurologist in New York, discussed the AP disputes over multiple sclerosis drugs and learning that patients could get only a limited six-month supply instead of a year.

We have to fight it, and again, you usually succeed, but it’s a lot of fighting, Podwall said.

A more disjointed and disorganized system could not be created than the one we have, he added.

The case of pay

Creating new CPT codes is a potential solution to a financial imbalance that PAs create between insurers and doctors, said Alex Shteynshlyuger, MD, a urologist and surgeon who practices in New York.

There is an incredible incentive for insurance companies to publish prior authorization because every prior authorization that I have done is a net financial benefit to the insurance companies who don’t have to pay for the care, Shteynshlyuger said. And every prior authorization currently performed by physician offices, physicians themselves, and their staff is a net loss to physician practices because it is not reimbursed.

So the only way to fix the problem is to make sure that the costs are properly allocated and that doctors are compensated for the work that they do, for the clinical work that they do, the cognitive work that they do, as well as the administrative part of it , he said. said

Now in the hundreds of millions a year, PAs have become an established practice in medicine, and payers have a financial incentive to insist on more. Neither they nor federal regulators seem ready to eliminate the process, Shteynshlyuger said. He also cited the work of Harvard economist David Cutler, whose proposal for a national clearinghouse for health information included recommending a reimbursement schedule for physicians applying for PAs.

Despite the delays, doctors comply because they care about their patients and want to get paid. Those who are tempted to skip the PA process because of cost, time, and aggravation have patients with worse outcomes because patients who receive treatments as ordered by their doctors, even if it requires PA, do better than those who do not receive the necessary treatments.

There is extensive published literature showing the need to make changes prior to physician recommendations for care, and it’s not always for the best, Shteynshlyuger said. Doctors sometimes try to avoid prior authorization by, for example, recommending less-than-ideal treatment options.

How many authorizations are there?

The new CPT codes for PA would serve another important role in health care research by recording the results of a current unknown in the health care system, said Howard A. Green, MD, a Florida dermatologist.

Doctors rely on evidence when diagnosing patients’ conditions and prescribing treatments. Clinicians, administrators, and policymakers compile data to evaluate processes and outcomes across health care. But there are no measurable equivalents for PAs, Green said.

This is a no-brainer for doctors. Let’s quantify it, let’s make it transparent, Green said.

Given the number of patients and payers in the United States, there is the potential for millions more PAs, perhaps billions.

For example, as of 2020, the US Department of Labor estimated that the nation had about 2.5 million group health plans governed by the Employee Retirement Income Security Act; in 2023, KFF reported 3,998 Medicare Advantage (MA) plans. As of 2021, Medicaid estimated that more than 200 million people were covered by private health insurance, with 92 million using Medicaid or the Children’s Health Insurance Program, and 62.5 million using Medicare or MA.

Green cited online job networking website LinkedIn, where people searching for pre-authorization turned up about 68,000 results as of mid-March 2024. Multiply that by two, three, four, five, there may be hundreds of thousands of people whose job it is to review PA applications.

Not all doctors deal with all health plans and all reviewers. But how many workers are there? How many PA requests do they receive? How many approve or deny, and why? How many resources are there? How many of these are approved?

Physicians, patients, and payers have anecdotes about PA, but no one has hard data on patient benefits or harms. Or, if they do, they don’t disclose it publicly, Green noted.

Speaking of prior authorization, nobody knows, Green said. Doctors complain, but no one communicates any data. Health insurers do not publish any data. Pharmaceutical Benefit Managers, a wholly owned subsidiary of the health insurers, does not release any data. And doctors can’t code it, so we can’t publish data. We can do surveys.

So it’s a big bureaucracy, happy or big, unhappy about nothing, because it’s not codified and there’s no accountability and there’s [are] without numbers It doesn’t exist, he said.

Undermining reform efforts

Aside from patient care, the broken PA process sometimes forces hospitals to eat the cost of patient care, while individual doctors and their staff are paid through burnout, Srinivas said. , who is also an elected state representative in Iowa.

It’s such a strange concept to people outside of health care that you do so much work that you don’t get paid, so from that point of view, billing the work would be fair and just, he said.

But the new PA codes, and ultimately doctors paying for PAs, would be a massive U-turn that would undermine years of effort to reform the process, Srinivas said.

It can take years to educate people about issues they are unfamiliar with, especially something as complex as paying for health care, and to overcome the human instinct to be suspicious of change, Srinivas said. Doctors, patients and their advocates have spent this time explaining PAs to lawmakers. There is evidence that it works.

In January, the US Centers for Medicare and Medicaid Services (CMS) announced new standards, starting in 2026, for a deadline of 72 hours for urgent PA requests and seven calendar days for non-urgent requests. Celebrating a 72-hour response time shows how bad the system is, Srinivas said. Still, the CMS rules are a big step forward, he said.

This will have far-reaching impacts for my colleagues, but ultimately for people who just need the care they need, Srinivas said. And I’m very hopeful that this will open more and more people’s eyes, people who are not in medicine, more people who are legislators at the state and federal level, and even people who work for insurance companies, commercial insurers , that there is a way. to do this which is better for everyone and that this is the direction we need to go [in].

As of spring 2024, AMA recorded 30 state legislatures considering at least 90 bills dealing with PA. Iowa, Minnesota, Wyoming, Massachusetts, Oklahoma and North Carolina have comprehensive PA reform bills pending this year, and lawmakers in New Jersey, Tennessee, Washington, DC, Arkansas, Washington, Louisiana, Montana, Rhode Island, West Virginia and Texas have been enacted. reforms, through new or updated laws in 2023.

States generally regulate commercial insurance and operate Medicaid programs under federal guidelines. Added to the CMS MA rules, state reforms can cover large percentages of the population.

People are realizing that this is a power that we can harness at the state level and still impact patients in a very positive way, Srinivas said.

Will insurers pay?

AHIP, the trade organization representing America’s health insurance payers, did not respond Medical Economy queries on this topic. In a letter to News from New YorkMike Tuffin, President and CEO of AHIP, responded to the editorial video addressing the patient care element of PAs.

Coverage decisions for treatments, surgeries or procedures follow clinical recommendations from major medical societies, clinical experts and federal health authorities, Tuffin said. Where prior authorization is used, it is designed to ensure that clinical care aligns with evidence-based recommendations so as not to deny or dissuade patients from receiving the care they need.

Tuffin did not comment on the concept of reimbursing doctors for doing them.

Even if the new CPT codes were to go on the books, insurance companies might not pay for them. But advocates said it’s a start.

There are many codes that cannot be paid, Podwall said. But that doesn’t mean it can’t be part of a negotiation. You can’t bill for something unless there’s a code, so we have to start with the code.

Federal mandates in health care are nothing new, so the federal government could legally order insurance companies to pay if doctors bill PA codes, Shteynshlyuger said.

This is a very simple solution to the problem, he said. It’s a fair solution for everyone.