Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
If you or someone you know has ever experienced the frustration of a delayed medical procedure or a denied prescription due to prior authorization, you’re not alone. The struggle with paperwork, waiting for approval and resulting delays in care are all too familiar to many of us.
That’s why Indiana lawmakers are considering two significant pieces of legislation focused on prior authorization: House Bill 1003 and Senate Bill 480. Though both seek to address concerns about the system, they take drastically different approaches. HB 1003 offers targeted, common-sense reforms that streamline prior authorization and improve transparency, while SB 480 would significantly limit the effectiveness of prior authorization, a move that would increase health care costs.
Prior authorization serves an important purpose. It is one of the few tools to keep health care costs in check, ensuring that treatments are medically necessary and cost-effective. Prior authorization can direct patients toward clinically proven, lower-cost medications, reducing prescription costs as much as 80%. It also ensures that advanced imaging services, like MRIs and CT scans, are obtained at facilities offering the best patient value. The price of an MRI, for example, can vary by hundreds to thousands of dollars within the same city for the same scan.
The financial implications of limiting prior authorization are significant. According to a 2024 report, Indiana’s employer-sponsored health plans could see costs increase up to $241 million annually, potentially leading to raised premiums or reduced benefits. Similarly, Indiana’s Medicaid program could face an additional $395 million in costs each year, putting a strain on the state budget and diverting resources from other essential services.
While it’s clear prior authorization is not perfect, we should strive to make it more efficient and patient-friendly, offering hope of a better system for everyone.
HB 1003 takes the right approach by implementing common-sense reforms to reduce delays and improve fairness. It establishes clear approval timelines and safeguards against retroactive claim denials, ensuring that sudden reversals don’t blindside patients and providers. The bill also requires that prior authorization decisions be reviewed by a medical professional with expertise in the relevant field, preventing unqualified denials that delay necessary care.
Indiana lawmakers have a critical choice to make. They can limit prior authorization, drive up costs and reduce patient safeguards, or they can reform it correctly through the thoughtful changes proposed in HB 1003.
Patients deserve faster, fairer, more transparent medical care. They also deserve protection from runaway health care costs. The best way to achieve both goals is to fix prior authorization with HB 1003, not abandon the practice altogether.•
__________
Ober is senior vice president of business operations and finance at the Indiana Chamber of Commerce.
Please enable JavaScript to view this content.
Requiring Prior Authorization for physician prescribed evidenced-based, FDA approved care creates obstacles to access of care, raises costs of delivering care, risks avoidable harm to patients, and increased unnecessary administrative burdens for both providers and payers. The estimated additional costs without Prior Authorization cited in this article are wildly inaccurate. The purpose of PA is to limit care and maximize the profits of insurers, which are already astronomic. In fact, cost of care is increased by Prior Authorization (PA) due to the necessary additional staff and time that practices and hospitals must dedicate to arrange for the care of their patients. Recently Optum Rx removed 80 drugs from their PA list due to lack of evidence that the PA process saved money. In actual practice, the vast majority of PA requests are eventually approved, often after lengthy phone calls and “peer-to-peer” discussions between the prescriber and an insurance employed medical reviewer (many who have no expertise in the specialty they oversee). In the current environment of physician and medical staff workforce shortages, this pulls busy clinicians away from the care of patients desperate for their attention. “Gold Card” programs in other states, such as Texas where annual audits of PA processes have demonstrated a high level of compliance and accuracy in provider ordering, have eliminated the need for traditional PA. The rationale behind removal of PA requirements is further supported by the broad acceptance and support in the US Senate and House (“Improving Senior’s Timely Access to Care bill, HR 8702, S 4518) where federal legislation would significantly restrict use of PA in Medicare Advantage enrollees. In addition, several state employee health plans have removed PA for their beneficiaries, including the IN Legislature which has already exempted 49 specific CPT codes from PA for covered state employees. Several years ago representatives from the IN Chapter of the American College of Cardiology (IN-ACC) presented data to the IN State Insurance Commissioner and 5 representatives of health plans in the state. Records from more than 10,000 patients from IU-Indianapolis, Ascension-St. Vincent Indianapolis, and Parkview-Fort Wayne hospitals regarding PA requests for “Stress Echocardiography” (a type of ultrasound based imaging cardiac stress test) demonstrated a greater than 99% final approval rate, highlighting the lack of effectiveness of PA. Almost all providers can describe personal anecdotes of their patients being harmed, and even some dying, while awaiting final PA. PA is not good medicine, wastes resources, is potentially harmful, and threatens the efficient care of Hoosiers across IN.