Dr. Richard Feldman: Prior authorization is burden on health system

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Dr. Richard FeldmanI have been practicing medicine long enough to remember the time when prior authorization required by insurance companies for medications, procedures, testing and other medical services occurred 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 prior authorization, 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 regard for 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 that PA is an unnecessary barrier leading to delays or interruptions in patient care that might 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 using staff time and expanded office staff to submit PA requests and appeals for denials.

Denials can also result in cost shifting to patients. Could PA also result in increased costs to employers and insurance companies? It’s a large, time-consuming, labor-intensive process. It’s interesting that 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 is considering legislation to temper the PA process with Senate Bill 3, authored by Republican Sens. Tyler Johnson, Ed Charbonneau and Chris Garten.

The basic components of this long and complex bill (as passed out of the Senate Health Committee):

◗ Mandate that a utilization review entity may only impose PA requirements 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 that 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 within 48 hours of requests, with shorter turnaround times for urgent and emergency services.

These are stringent requirements. The bill will undoubtedly change as it moves through the legislative process, especially in the House, where the insurance industry and employers have greater influence.

Hopefully, this legislation will survive in a meaningful form.•

__________

Feldman is a family physician, author, lecturer and former Indiana State Department of Health commissioner for Gov. Frank O’Bannon. Send comments to ibjedit@ibj.com.


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One thought on “Dr. Richard Feldman: Prior authorization is burden on health system

  1. Good morning; Within the last two weeks, David Brooks has written about the stifling effects of administrators and regulations, specifically citing health care.

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