The time-wasting, care-delaying, insurance company cost-control process known as prior authorization has gone from a rarely employed tool to discourage use of extremely pricey interventions to a form of utilization management that comes as naturally to payers as breathing does to the rest of us.
Prior authorization is overused, and existing processes present significant administrative and clinical concerns. That is why fixing prior authorization is a critical component of the AMA Recovery Plan for America’s Physicians.
Prior authorization is a multifaceted problem that needs to be tackled from numerous angles. High on the hit list are the sluggish response times, an overwhelming and increasing volume of requirements, inadequate peer-to-peer reviews and more. As the physician’s powerful ally in health care, the AMA is tackling prior authorization with research, practice tools and reform resources.
In this second installment of an AMA series on fixing prior authorization, we take a look at the problem with the number of prior authorization requests physicians must make on a weekly basis, its impact on physicians and patients and how the system can be improved.
What’s the problem?
When it began decades ago, prior authorization was used sparingly as a way for insurers to determine if costly medical procedures or medications were needed.
Today, prior authorization has deteriorated into a system that requires physicians to get the OK to prescribe even the most routine medications and procedures. It’s often even required for medications that a patient has been on for years to manage an illness and for chemotherapies known to be the only effective treatments for a particular cancer—a circumstance when timely treatment is particularly important.
A KFF analysis of Centers for Medicare & Medicaid Services (CMS) data found that in 2021:
- Medicare Advantage insurers saw more than 35 million prior authorization requests submitted on enrollees’ behalf.
- Medicare Advantage insurers partially or fully denied more than 2 million of those requests.
- Among the denials, 11% were appealed.
- Among denials that were appealed, 82% saw the initial prior authorization denial fully or partially overturned.
- 99% of Medicare Advantage patients are enrolled in a plan with prior authorization on at least some services.
And that’s just a slice of what is going on with prior authorization in the U.S., considering that most patients are covered by other insurers such as Medicaid and commercial payers. The process is costing physicians time and resources that could be better dedicated to patient care.
An AMA survey of 1,001 physicians (PDF) found that:
- On average, practices complete 45 prior authorization requests per physician, per week.
- Physicians and their staff spend an average of 14 hours—almost two business days—completing those requests each week.
- 35% of physicians have staff who work exclusively on prior authorizations.
- 88% of physicians describe the burden associated with prior authorization as “high” or “extremely high.”
- About 80% of physicians report that the number of prior authorizations required for prescription medications and medical services has risen over the last five years.
“When I prescribe a medication, I would say 95% of the time, I have to obtain a prior authorization. We have four full time employees who their sole focus is on obtaining prior authorization for medications to treat Crohn’s disease and ulcerative colitis. And that’s for just one disease state,” Bethesda, Maryland, gastroenterologist Jessica Korman, MD, told The New York Times in an opinion video that was recently posted: “‘What’s My Life Worth?’ The Big Business of Denying Medical Care.”
AMA Immediate Past President Jack Resneck, MD, a dermatologist, said in an AMA video that “for the amount of time it takes myself and my office staff to go through that process now for almost all the prescriptions we write has gotten to be an enormous problem both for us and for our patients.”
He added that “we’re spending something like 15 hours a week per physician just filling out these forms and waiting on hold for the insurance companies.”
But the prior authorization process is sucking up more than just time and money. In the worst-case scenarios, the volume of prior authorizations is harming patients’ health. One-third of the 1,001 physicians the AMA surveyed (PDF) reported that prior authorization has led to a serious adverse event for a patient in their care. These shares of surveyed physicians reported that prior authorization led to:
- A patient’s hospitalization—25%.
- A life-threatening event or one that required intervention to prevent permanent impairment or damage—19%.
- A patient’s disability or permanent bodily damage, congenital anomaly or birth defect, or death— 9%.
Explore this video collection of AMA member physicians’ prior authorization horror stories.
What are the fixes?
The bottom line is that the volume of prior authorizations that payers are requesting must be reduced. The AMA supports eliminating prior authorization requirements for regularly approved care, as well as gold-carding programs that allow physicians who routinely have their requests approved for certain medications and procedures to not be required to go through the prior authorization program for those treatments.
Gold carding is part of the “Prior Authorization and Utilization Reform Principles” (PDF) that came out of an AMA-convened workgroup with 16 state and specialty medical societies, national provider associations and patient representatives. It includes 21 principles covering five main areas, including three principles related to prior authorization alternatives and exemptions.
The principles further say that:
- “Health plans should restrict utilization management programs to ‘outlier’ providers whose prescribing or ordering patterns differ significantly from their peers after adjusting for patient mix and other relevant factors.”
- “Health plans should offer at least one physician-driven, clinically based alternative to prior authorization, such as but not limited to ‘gold-card’ or ‘preferred provider’ programs or attestation of use of appropriate use criteria, clinical decision support systems or clinical pathways.”
- “A provider that contracts with a health plan to participate in a financial risk-sharing payment plan should be exempt from prior authorization and step-therapy requirements for services covered under the plan’s benefits.” Those physicians are already incentivized to contain unnecessary costs because they are sharing in the financial risk.
What progress has been made?
The GOLD CARD Act of 2023, H.R. 4968, has been introduced in the U.S. House of Representatives and has bipartisan support.
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The bill incorporates a number of solutions the AMA is pushing for. The GOLD CARD Act would exempt physicians from Medicare Advantage plan prior authorization requirements if 90% of the physicians’ prior authorization requests had been approved in the preceding 12 months. The Medicare Advantage plan-issued gold cards would apply only to items and services, not medications, and be in effect for at least one year.
The proposed federal legislation is modeled on a similar Texas law that went into effect in 2021. That law was the first of its kind in the United States, and it allows physicians who have a 90% prior authorization approval rate over a six-month period on certain services to be exempt from prior authorization requirements for those services.
Arkansas, Louisiana, Michigan and West Virginia are among the states that have since passed laws (PDF) that require a form of gold carding, and Vermont began running a pilot program in 2022. Other jurisdictions have passed some exemptions. For example, Connecticut does not allow prior authorization for opioid antagonists and Washington, D.C., doesn’t allow prior authorization for medications for opioid use disorder, or emergency services, including screening, stabilization, and prehospital transportation.
Last fall, UnitedHealthcare announced that several plans would start eliminating the prior authorization requirement for a number of procedure codes, which the insurer said accounted for nearly 20% of its overall prior authorization volume. UnitedHealthcare also announced it would implement a gold card program in 2024 to let those who qualify follow a “simple administrative notification process for most procedure codes” instead of prior authorization.
Meanwhile, Cigna announced last year that it would remove nearly 25% of medical services from its prior authorization requirements.
These announcements have been a long time coming after the AMA issued a 2018 consensus statement (PDF) with the Blue Cross Blue Shield Association, Medical Group Management Association, AHIP and others that included an agreement to “encourage the use of programs that selectively implement prior authorization requirements based on stratification of health care providers’ performance and adherence to evidence-based medicine.”
What’s the AMA still pushing for?
The AMA continues to push for payers to reduce the volume of prior authorizations through gold carding or eliminating which services and medications even require it in the first place. The AMA also continues to push for laws that establish national and state gold carding programs.
AMA CEO and Executive Vice President James L. Madara, MD, wrote in a letter to the CMS administrator that “the AMA stands ready to work with CMS to develop meaningful guidelines for gold-carding programs that would reduce the volume of PAs to the benefit of all stakeholders.”
How can patients and physicians help?
An AMA model bill (PDF) can help physicians get started on advocating change in their own state legislatures. Patients, doctors and employers can learn more about reform efforts and share their personal experiences with prior authorization at FixPriorAuth.org.
AMA survey data shows that’s the average weekly workload for one physician. Learn how the AMA is fighting for prior auth reduction.
