Prior authorization is the process by which the payers determine the medical necessity of a procedure or service provided to the patients. It acts as a check and balance for the payers which flags newer and better treatments to patients. Though it started as a cost and quality control method, the preauthorization process has now become a “necessary evil” in the industry. In the United States, private payers place codes on procedures, diagnostics, drugs, and sites of care since doing so prompts PAs to act before the service is delivered. There is approximately 5000 PA codes used across private payers. The average direct cost of PA is $40-$50 per submission for private payers while for providers it is $20-$30.
Prior authorization has been identified as one of the most invasive administrative tasks that affect physicians and consumes a lot of their valuable time and energy in a vain attempt at performing it. A 2022 AMA survey revealed that 86% of the physicians claimed that prior authorizations led to the use of excess healthcare in the system hence being wasteful contrary to what insurance companies said about saving expenses. As few as 30% of respondents claimed that prior authorization requirements did not cause diversion either to ineffective initial treatments, or additional office visits; as few as 36% of respondents disagreed that prior authorization requirements had no negative impact on diversion to ineffective initial treatments, as few as 38% disagreed that prior authorization had no negative impact on additional office visits. In the same survey, it was established that practices submit 45 prior authorizations to 1 physician per week while physician and their staff spend 14 hours weekly on prior authorization.
The 2023 AMA survey shows even worse conditions. 94% of the physicians claimed preauthorization adds to excessive administrative burden and results in care delays. The report also reveals that 78% of the physicians have experienced patients abandoning care due to delays in the authorization.
Impact of Prior Authorization on Patients and Practices
Currently, Medicare Advantage plans are preferred over traditional Medicare. These plans may need prior approval for expensive services such as admission to a hospital, a nursing home, or some prescription. Though these strategies are aimed at discouraging irresponsible and expensive remedies, they produce delays and refusals of necessary treatments.
Karen Miller from Denver suffered a stroke in February 2023 and she was taken to a rehabilitation facility to help her regain function. With the help of instructors in physical, occupational, and speech therapy her condition improved significantly. However, her Medicare Advantage plan suddenly rejected her right to continue the treatment, and was allowed only 48 hours to discharge. This placed the burden on her husband, David, to arrange for home care and to rage against an insurance company that would buck the advice and treatment of doctors.
Karen’s story is quite typical of suddenly jobless people whose employers are not used to the idea of remote work. The same experiences are true for many patients with Medicare Advantage plans that will only approve expensive treatments after prior authorization. About 51 % of Medicare enrollees are now in these plans, said Sarah Johnson, deputy director at the Health Policy Research Institute. Exclusive of fully capitated arrangements, these plans processed over 37 million prior authorization requests in 2022 and rejected around 5% of them.
The financial implications of PA denials can be severe. Patients often end up paying out-of-pocket for services that were supposed to be paid for by insurers. On the other hand, providers like you face excessive administrative burdens and threats to their reimbursements.
Efforts to Solve Prior Authorization Issues
1) Legal Advocacy
Currently, both federal and state governments are not idle to address the issue of the prior authorization process. For instance, the Improving Seniors’ Timely Access to Care Act proposed in Congress will address prior authorization of Medicare Advantage plans. Specifically, the bill would require such plans to implement the use of electronic prior authorization systems, set timeframes for the processing of such approvals, and ensure more disclosure on the rate of approvals as well as denial.
2) Technological Innovations
One of the most effective solutions for the existing problems in using the PA system is using advanced technology. Real-time ePA applications embedded in EHR facilitate providers to submit and monitor authorization requests in a systematic method. Such systems mitigate paperwork.
Big data and data analytics are also used to make predictions of approval outcomes, thus allowing providers to make correct prognoses on treatment plans. Such innovations help to minimize the need for extra manual interventions which will add more working hours to physicians’ schedules.
3) People strategy
You can consider efficient resources from outsourced prior authorization companies. These companies have a team of experienced professionals who can eliminate all the hurdles in the preauthorization process and optimize your workflow in the long run.
4) Looking Ahead
To provide a solution to the prior authorization problem a combination of regulation, technology solutions, and stakeholders is essential. However, further work is needed in order to ensure that the adaptation of the PA process does not hamper timely and effective care delivery. If these and other problems are faced accordingly, it is possible to balance between cost and patient-centered care.
Ref Link:
https://www.aha.org/news/headline/2024-12-17-aha-releases-final-health-care-plan-accountability-update-2024
https://www.congress.gov/bill/118th-congress/senate-bill/4532/text
