Health Insurance

Prior authorization: Burden on physicians and recommendations for change

Prior authorization policies may save money for payers, but they impose significant costs on patients and providers. A JAMA Viewpoint by Anderson, Darden and Jain (2022) examines various approaches for improving prior authorization in Medicare Advantage.

In a recent survey of 1004 physicians, 88% reported that the burden associated with prior authorization requirements was high or extremely high. Across payers, primary care practices reported that they completed an average of 41 prior authorization requests weekly per physician, consuming 13 staff hours per week; furthermore, 93% of physicians reported care delays and 82% reported care abandonment (either not initiating or not continuing the recommended treatment) due to prior authorization policies.

The above data largely draw from the American Medical Association Prior Authorization (PA) survey. The authors also suggest the following reforms to prior authorization policies within Medicare Advantage.

  • Plans should use an electronic-based prior authorization process with time-bound requirements for initial and appeal decisions.
  • Plans should be mandated to report guidelines used to make prior authorization decisions and seek input from respective medical societies and stakeholder groups on an annual basis.
  • The relative benefits and costs of prior authorization should be reviewed by the CMS at the procedure level. Such review could consider evidence from other care rationing mechanisms, including price. All else equal, unnecessary care is less of a concern in clinical scenarios for which demand is inelastic and there is little price sensitivity (eg, high-cost chemotherapy when there is not a lower-cost alternative). In such cases, restrictions on access due to prior authorization will introduce little change in wasteful or unnecessary care while still generating additional administrative costs.
  • Medicare Advantage insurers should report approval and denial rates annually to the CMS based on beneficiary sociodemographic characteristics and by procedure type so that the CMS can monitor whether prior authorization policies may be increasing disparities in access to care.
  • CMS should audit the denials of plans with high-denial rates. Setting thresholds for audit could be based on a comparison with other MA plans, as well as in consultation with patient, caregiver, clinician, and insurer stakeholders.

Streamlining prior authorization, insuring prior authorization does not impact care for inelastic services, and insuring that prior authorization does not exacerbate health disparities are all sensible policies to make PA less of a burden to patients and providers.

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