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 the AMA is fixing prior authorization by challenging insurance companies to eliminate care delays, patient harms and practice hassles.
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 fourth installment of an AMA series on fixing prior authorization, we closely examine the lack of transparency surrounding the practice. From which medications and services require prior authorization to clearly understanding what documentation physician offices must provide to support their prior authorization requests, learn about what needs to change and how the AMA is pushing for those fixes.
What’s the problem?
Not having a full understanding of which treatments or medications that an insurer requires prior authorization for, what documents are required to support a request for prior authorization, or the specific reason for a denial can lead to real patient harm. In some cases, this lack of transparency can even contribute to patient deaths.
“When you get a denial of a request, we often don’t know why. You don’t get told the reasoning behind the denial and it can take hours and hours to appeal a decision. And then sometimes you wait weeks or even months for a peer-to-peer consult,” AMA President Jesse M. Ehrenfeld, MD, MPH, said in an episode of “AMA Update.”
For New York City radiation oncologist Fumiko Chino, MD, even one day’s delay in treating cervical cancer equates to a 1% drop in the local control rate for her patients. A five-day delay is a 5% decrease in local control rate—and so on, she said during a webinar hosted by KFF.
“Even one day of delay can lead to worse outcomes,” said Dr. Chino, whose research on cancer patients’ experiences with prior authorization was published in JAMA Network Open.
“Increase transparency 100%,” she said. “When I face a prior authorization barrier for someone and I know the mechanism for what they are denying, I’ll [know] we need to pivot immediately because I’ve already delt with them before, and I need to get another plan ready. So, it [transparency] actually facilitates me knowing what the next steps are to provide the very best care for the patient.”
The lack of transparency about when a patient’s prior authorization will expire also poses problems for patients and physicians.
Mississippi internist and addiction medicine physician Daniel P. Edney, MD, said patients will drive over an hour to come see him when neither he nor the patient knows that a previous prior authorization has expired or is about to run out.
“We write the prescription, they go to the pharmacist back in their home community and that’s when they find out the PA [prior authorization] is up. And then we have to start the process of the PA all over again,” Dr. Edney said in a video interview that is part of a collection of AMA member physicians’ sharing their awful experiences with prior authorization in practice.
Just two weeks prior to filming his remarks, Dr. Edney had a patient “that very scenario happened to, and in the interim she relapsed on methamphetamine trying hard not to go back to heroin.”
Beyond these direct patient harms, health plans’ prior authorization programs operate behind the curtain, with neither physicians nor the general public having insight into how requirements may be impacting care. In most cases, access to data that shows just how often a particular company approves treatment or how long it typically takes a company to process a request is not available. This information is critical in holding insurers accountable for their prior authorization processes.
What are the fixes?
In a nutshell, insurers must be more transparent with physicians and patients about their prior authorization requirements. They also must compile, share statistics and report data about decisions that the company makes regarding prior authorization.
The “Prior Authorization and Utilization Reform Principles” (PDF)—which came out of an AMA-convened workgroup with 16 other state and specialty medical societies, national provider associations and patient representatives—outline what the AMA and others believe is necessary when it comes to transparency and why it is important.
Four of the documents’ 21 principles address transparency. They call for utilization-review entities to take these steps.
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Publicly disclose, in a searchable electronic format, patient-specific utilization-management requirements, including prior authorization, step therapy, and formulary restrictions with patient cost-sharing information, applied to individual drugs and medical services. The information should be accurate and current and include an effective date so providers and patients, including prospective patients engaged in the enrollment process, know that the information is up-to-date.
Clearly communicate to prescribing or ordering physicians and other health professionals what supporting documentation is needed to complete every prior authorization and step therapy override request.
Provide accurate, patient-specific and up-to-date formularies that include prior authorization and step therapy requirements in electronic health record systems.
Make statistics regarding prior authorization approval and denial rates available on their website—or another publicly available website—in a readily accessible format. Statistics should include categories related to prior authorization requests: physician type/specialty; medication, diagnostic test or procedure; indication; total annual prior authorization requests, approvals and denials; reasons for denial, such as medical necessity or incomplete prior authorization submission; and denials overturned upon appeal.
Provide detailed explanations for prior authorization or step therapy override denials, including an indication of any missing information. All utilization-review denials should include the clinical rationale for the adverse determination; for example, national medical specialty society guidelines, peer-reviewed clinical literature, etc. Denials should also include information about the plan’s covered alternative treatment and detail the provider’s appeal rights.
What progress has been made?
Physicians and patients scored a big win earlier this year when the Centers for Medicare & Medicaid Services (CMS) issued a final rule that will, among other things, significantly increase transparency on prior authorization for patients and physicians.
The rule will apply to these government-regulated health plans: Medicare Advantage; State Medicaid and Children’s Health Insurance Program (CHIP) fee-for-service programs; Medicaid managed care plans and CHIP managed care entities; and qualified health plan issuers on the federally facilitated exchanges.
“The CMS final rule is going to require insurers to provide specific, very specific denial reasons and public reporting of metrics. How often do they approve? How often do they deny things? How long does it take a process to actually give a result for a request?” Dr. Ehrenfeld noted in his “AMA Update” interview.
“Insurers are also going to be required to share that information with patients. So, the patient—our patients—can become informed decision makers when they’re buying health insurance out on the exchanges, when they’re making plan decisions. That’s going to begin in 2026 and will go a long way in bringing much needed transparency and accountability to the entire process.”
At the state level, a number of legislatures have passed laws (PDF) that require prior authorization transparency. For example, California requires that a plan must provide a clear explanation of specific reasons for a prior authorization denial or step therapy exception denial.
Washington requires, among other things, that denials must include specific reasons; and if an adverse decision is based on clinical review criteria, the criteria must be provided. Meanwhile, in Colorado, insurers must provide the patient a notice of their right to appeal when a prior auth request is denied.
And a 2018 consensus statement (PDF) with the Blue Cross Blue Shield Association, Medical Group Management Association, America’s Health Insurance Plans and others says that “effective, two-way 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, rationale and program changes.”
What’s the AMA still pushing for?
While the CMS rules goes a long way in making changes to government-regulated health plans, the changes do not impact private payors.
And despite the 2018 consensus statement, payers usually still keep the underlying prior authorization criteria out of view from patients and physicians, saying that the information is proprietary. Consequently, there’s still a need for more transparency around the criteria for prior authorization approval and the evidence-based guidelines on which the criteria are based.
Physicians have also pointed to the urgency to have access to patient-specific drug coverage and prior authorization information in their electronic health records.
When it comes to what is reported about health plans denials and other prior authorization data, the AMA would like more granularity in the data that is reported. CMS only requires plans to report rolled-up data— for example, overall appeals and denials compared with data for specific services or categories of services.
The AMA would also like to see regulators use the data that is available to enforce legislative requirements and identify additional areas that should be addressed or improved in future rulemaking or legislation.
Editor’s note: In June, a bipartisan congressional group introduced an updated version of the Improving Seniors’ Timely Access to Care Act in the House and Senate (H.R. 8702; S. 4532). Learn more about how the bill would boost older adults’ access to care by fixing prior authorization.
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.
