Preauthorization—private health insurers’ requirement that physicians obtain prior payer approval to prescribe certain medications or to order certain procedures—is presented by insurers as a cost-cutting measure. But many physicians say this stipulation simply delays care and doesn’t save either time or money.
Explore This IssueAugust 2019
In December 2018, 91% of respondents to an American Medical Association survey of 1,000 primary care and specialty physicians said that prior authorizations had a “significant” or “somewhat significant” impact on patient outcomes (Available at: ama-assn.org/system/files/2019-02/prior-auth-2018.pdf).
“I’m surprised it’s not 100%,” said Gavin Setzen, MD, immediate past president of the American Academy of Otolaryngology–Head and Neck Surgery and president of Albany ENT & Allergy Services in Albany, New York. “Prior authorization is becoming more burdensome, more complex, more costly, and more frustrating. I think it is a mechanism for payers to delay or deny care, which translates into delay or denial of payment. I believe [payers] see this somewhat as a war of attrition.”
The Prior Authorization Process
Prior authorization can affect different parts of a clinical practice, but it is commonly seen with ancillary services such as advanced imaging (CT and MRI), in-office surgical procedures, facility-based implantables, and medications, said Dr. Setzen. “We’ve provided imaging for over 15 years, and at least 40% of patients require preauthorization.”
One way to speed up the process is to provide appropriate, thorough documentation in the patient’s medical record that clearly explains why the imaging, procedure, or particular medication is needed. Dr. Setzen said that, if this is done, most cases are able to go through a so-called “clean” pre-authorization process. However, he estimates that approximately 20% of preauthorization requests are denied despite these measures. The AMA survey found that, on average, practices must complete 31 prior authorizations per physician per week, equating to a total of almost two business days, or 14.9 hours, each week dedicated to administrative tasks. In addition, 36% of physicians in the survey employ staff members whose only job is to process prior authorizations, per the report.
Prior authorizations can mean additional testing and office visits, and the appeal process can be lengthy. Denials typically require a peer-to-peer review, which takes the clinician out of face-to-face care to spend time on the phone with a physician from the payer. Additional staff resources are needed to facilitate the phone call, invariably resulting in conflicts with other clinic responsibilities, Dr. Setzen said.
Traditional Medicare does not require prior authorization, said Steven Gold, MD, vice president of ENT and Allergy Associates, LLP, in Tarrytown, New York. “I saw a gentleman who clearly needed a CT scan, with swelling at the base of his tongue, and he went [for a scan] that afternoon, because we needed imaging to see what it was. If he had private insurance, I wouldn’t be able to send him over the same day. If it were urgent, I could have sent him to the ER to get the test right away, but we shouldn’t have to do that. We are board-certified specialists trying to deliver quality care to patients.”