A huge headache for the healthcare industry is “prior authorization” – the bureaucratic nightmare of getting approvals from insurers for what doctors say is needed care.

CAQH,  a non-profit Washington, DC-based alliance of health plans and trade associations, released a report last month –  detailed by Health Data Buzz  – that shows how these prior authorizations  have hamstrung the move toward using electronic records, with a resultant significant loss of clinician time and spiraling monetary costs.

That is merely the latest in a string of concerns about payer prior authorization requirements, which increases doctor practice burdens and overwhelms patients, according to multiple organizations.

Major  healthcare associations say there has been a big push the past two years to change the prior authorization system, though progress comes slowly. At this point, there are many pleas for reform and  organizations insist they are  banding together to try to make changes happen.

A HeavyWeight Outcry

Earlier this year, the American Medical Association,  Medical Group Management Association  and other groups issued  an urgent consensus statement that outlined what they termed a shared commitment to establish industry-wide improvements  to reduce the onerous prior authorization process in which approvals are needed by health plans, benefit managers, and others. Last week,  CAQH added their major concerns.

The groups  expressing dismay include other powerhouses, insurers among them:  the American Hospital Association, America’s Health Insurance Plans, American Pharmacists Association, Blue Cross Blue Shield Association, among others.

In March, an American Medical Association  survey showed that more than nine in 10 physicians reported that prior authorization programs “have a negative impact on patient clinical outcomes.”

The problems, MGMA says,  are wrapped around agreements between health plans and participating physicians in which “the insurer has the right to determine the medical necessity of surgery, imaging studies, medication and many other procedures.”

Physicians have to divert their attention from clinical and  administrative staff time – as well as resources – to work on submitting preauthorization requests for services, MGMA says.

“Health plan demands for prior approval for physician-ordered medical tests, clinical procedures, medications and medical devices ceaselessly question the judgment of physicians, resulting in less time to treat patients and needlessly drive up administrative costs for medical groups,” said MGMA’s President and CEO Halee Fischer-Wright, MD, in a statement.

Impact on Patients

According to referralmd, while many preauthorization approvals are used for  expensive drugs, generally “66% of prescriptions that get rejected at the pharmacy require prior authorization.”  It adds:  “Not only is this negative for pharmaceutical organizations, most importantly this causes frustration to patients who don’t get the medication that could best treat their condition, or who don’t get any therapy at all.”

“Strict or bureaucratic oversight programs for drug or medical treatments have delayed access to necessary care, wasted limited healthcare resources and antagonized patients and physicians alike,” AMA President Andrew W. Gurman, MD, said in a statement. “The AMA joins the other coalition organizations in urging health insurers and others to apply the reform principles and streamline requirements, lengthy assessments and inconsistent rules in current prior-authorization programs.”

The groups wanting change have outlined a set of 21  principles aimed at helping patients receive what they term timely and medically necessary care and medications and reduce the administrative burden.

Making Things Better

Among other things, they have several suggestions for improvement.

For instance, they said there can be a regular review of medical services and prescription drugs that are subject to prior authorization requirements that would more easily  identify those which may not be necessary because of “low variation in utilization or low prior authorization denial rates.”

In addition, they added:  “effective communication channels between health plans, health care providers and patients are necessary to ensure timely resolution of prior authorization requests to minimize care delays and clearly articulate prior authorization requirements, criteria, rational and program changes”

“Clearly, industry action on prior authorization is needed,” wrote CAQH in a letter last week. “Substantially improving prior authorizations on behalf of the industry ranks among our highest priorities in 2018.”

Impact on Electronic Record and Efficiencies

According to its 2017  CAQH Index adoption of the standard prior authorization transaction by health plans and providers could result in savings of $6.84 per transaction, one of the most significant per transaction opportunity areas, it said.

But the “proportion of prior authorization transactions using that standard actually declined by more than 10 percentage points” from the previous year’s Index report. According to the CAQH Index, providers conduct 77 million prior authorization transactions manually each year. It said: “Providers could save more than $3.20 per transaction and health plans could save at least $3.64 per transaction with fully electronic prior authorizations.”

The goal of the coalition is to shed a “bright light on today’s prior authorization requirements and offer tangible recommendations for improving the current process.”

Let’s see how far, with its list of principles, and the glare of the spotlight, these organizations can go to change a process that is harming many.

— Joe Cantlupe, HealthDataBuzz.