Here’s what you’ll need to know when covering prior authorization
By Joseph Burns
Every month or so, it seems there’s a horror story about prior authorization. Last month, for example, CNN’s Jen Christensen reported about a teenager in Massachusetts who died of a seizure after being unable to get prior authorization to renew a prescription for her medication.
Still to be determined in that case is whether the doctor or pharmacy should be held responsible for the death of Yarushka Rivera, 19, of Lowell, Mass., according to reporting by Shira Schoenberg of MassLive. In the case, the Massachusetts Supreme Judicial Court ruled in June that a pharmacist has a duty to tell both the patient and his or her physician when filling a prescription requires prior authorization, Schoenberg wrote.
In February, CNN’s Wayne Drash broke a story about how a former medical director for Aetna said in a sworn deposition that he never looked at patients’ medical records before deciding to approve or deny a prior authorization request. After that story broke, six states said they would investigate Aetna’s prior authorization practices.
In November, MedPage Today published a blog post by Milton Packer, MD, a distinguished cardiologist at Baylor University Medical Center. The headline on the post asked, “Who is actually reviewing all those pre-authorization requests?” In his blog post, Packer stirred controversy when he wrote that doctors who work for health insurers in prior-authorization roles told him at a conference that they typically deny payment requests for medications that may be too expensive.
For Health News Review, Mary Chris Jaklevic and Kevin Lomangino covered the issue. ”While many readers praised the piece for exposing what they described as unethical practices in the health care payment system, others questioned the article’s accuracy and its characterization of the preauthorization process, which is a special approval insurers require before they’ll pay for certain (often costly) treatments,” they wrote.
Each of these situations show that for health insurers, providers and patients, prior authorization is complex and often deeply controversial.
The prior authorization process itself goes by several names including preauthorization, prior approval, precertification, prior notification, prospective review and prior review. Sometimes, insurers use a more general term for prior authorization called utilization management or UM.
On Healthcare.gov, the federal Department of Health and Human Services defines prior authorization as, “a decision by your health insurer or plan that a health care service, treatment plan, prescription drug or durable medical equipment is medically necessary.” Health insurers often require prior authorization before allowing patients to get certain nonemergent services, HHS says, adding that even if the insurer approves the treatment or service, there is still no guarantee it will pay for it.
Physicians have a more skeptical view of the process. “Health plans often use prior authorization to restrict access to costly services and therapies — particularly newer treatments,” says the AMA, which defines the term as, “any process by which physicians and other health care providers must obtain advance approval from a health plan before a specific procedure, service, device, supply or medication is delivered to the patient to qualify for payment coverage.”
Among physicians and other providers, prior authorization is problematic because it can delay treatment and burdens them with hours of paperwork and time on the phone seeking approval from health insurers and their intermediaries. Not only does the process require physicians to spend extra time and money on this administrative burden, but it also can have a negative effect on patient care, according to reporting last year by Janet Kidd Stewart in Medical Economics magazine.
Last year, the American Academy of Family Physicians (AAFP) reported that surveys of physicians showed frustration with prior authorization reached a new high. At that time, AAFP and other physician organizations, including the American Medical Association, several medical societies and the American Hospital Association, called for the reform of prior authorization and utilization management requirements, saying the process bogs down physicians and impedes patient care. In the group’s announcement, Health Care Coalition Calls for Prior Authorization Reform, the members of the coalition included a list of 21 principles for reform, Prior Authorization and Utilization Management Reform Principles (pdf). For physicians, the AMA has a list of resources at this site, Prior Authorization Practice Resources, that could be useful to journalists.
This year, the health insurance industry issued a plan to improve prior authorization and increase timely access to treatment. The organizations agreed to a consensus statement that outlined this plan were America’s Health Insurance Plans (the trade association for health insurers), the American Hospital Association, the AMA, the American Pharmacists Association, the Blue Cross Blue Shield Association, and the Medical Group Management Association.
Among the goals of the plan is one to cut the number of health care professionals subject to prior authorization requirements based on their performance, adherence to evidence-based medical practices, or participation in a value-based agreements with health insurers.
In some contracts, health insurers and health systems are beginning to adopt these principles. For Modern Healthcare, Tara Bannow reported in June that the Mayo Clinic and Blue Cross of Minnesota agreed to a five-year contract beginning next year that will shift some financial risk to the Mayo Clinic and eliminate some prior authorizations.
One of the other goals of the plan is to accelerate industry adoption of national electronic standards for prior authorization. In June, Greg Slabodkin reported for Health Data Management that the U.S. House of Representatives passed a bill to improve access to electronic prior authorization (ePA) for seniors in Medicare Advantage Part D plans.