I have been practicing long enough to remember the time when prior authorization (PA) by insurance companies for medications, procedures, testing and other medical services occurred very infrequently.
Physicians felt largely free to practice medicine consistent with what was considered medically necessary and within the established standard of care without undue interference from the insurance industry. Medical decision-making was between doctor and patient.
Unavoidably, some decisions certainly resulted in increased health-care costs, just as they do today. In fact, despite currently robust PA, health care costs have progressively increased.
PA isn’t primarily a discussion between insurance company-physicians and physicians providing care. It’s often decided by non-physicians with no or limited medical and clinical expertise looking at a computer screen with a predetermined decision tree without regarding the individual clinical case nuances.
The rationale for the rise of PA originated to mitigate fraud, abuse and waste in the health-care system. Sounds reasonable if used responsibly and judiciously. But at some point, it morphed into simply cutting costs for employers and insurance companies while not necessarily enabling the best quality medical care. Saving money and increasing profits were (and are) paramount.
Physicians agree PA is an unnecessary barrier leading to delays or interruptions in patient care that may result in worsening of medical conditions; even more costly testing, treatments and services; and avoidable or longer hospitalizations. It leads to increased administrative costs to providers by utilizing staff time and expanded office staff to submit PA requests and appeals for denials.
Denials also can result in cost shifting to patients. Could PA additionally result in increased costs to employers and insurance companies? It’s a large time-consuming, labor-intensive process. It’s interesting some insurers are actually modestly reducing their PA programs. And a new federal rule will obligate insurers participating in federal programs to shorten determination timelines and add transparency to their PA processes.
The Indiana General Assembly considered legislation to temper the PA process with SB 3 authored by Republican Senators Tyler Johnson, Ed Charbonneau and Chris Garten.
As passed by the Senate Health Committee, the basic components of this long and complex bill:
Mandate PA may only be imposed yearly on less than 1% of providers in a given specialty or health-care service and 1% of health-care providers overall.
Prohibit requiring PA for services that are considered medically necessary and appropriate within the customary standard of care.
Eliminate PA for prescription medications approved by the Federal Food and Drug Administration including those for treatment of opioid use disorder.
Bar PA for pre-hospital transportation.
Prohibit PA for emergency facility medical care for true emergencies.
Mandate all adverse PA determinations and appeals are reviewed by a physician in the same or similar specialty of the requesting physician.
Exempt providers from PA requirements who met (or would have met) at least an 80% PA approval rate in the previous 12-month period for a particular health-care service.
Require transparency of a utilization review entity’s requirements, restrictions, clinical criteria, and statistics on approvals and denials on its website.
Compel that PA determinations must be made with 48 hours of requests with shorter turnaround times for urgent and emergency services.
Unfortunately, the bill died in the Senate Appropriations Committee over cost-to-Medicaid concerns.
These are admittedly stringent requirements and undoubtedly the legislation would have faced stiff opposition in the House by powerful insurance and employer groups.
The Legislature must meaningfully address the out-of-control PA system. Probably not this year.
Dr. Richard Feldman is an Indianapolis family physician and the former state health commissioner. Send comments to [email protected].