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Standing Up to Prior Authorization

July 22, 2024

August 2024

Tired of waiting on insurance companies to approve or deny a request, physicians and lawmakers are joining forces to change the system.

Leah Lawrence

Leah Lawrence is a freelance health writer and editor based in Delaware.

Since becoming an attending physician in 2014, Mary-Elizabeth Percival, MD, has noticed a steady rise in the number of drugs and procedures that need prior authorization and the burden of documentation required for each prior authorization.

“I am somewhat sheltered from this process because we have a prior authorization team, for pharmaceuticals for example, that works on this,” said Dr. Percival, associate professor at the University of Washington and Fred Hutchinson Cancer Center in Seattle. “However, the number of times that something that is a standard of care listed in the [National Comprehensive Cancer Network] or has [U.S. Food and Drug Administration] approval will come back with a denial that requires extra documentation or citations of literature to be submitted seems like it is greater than it used to be.”

A 2022 American Medical Association (AMA) survey found that, on average, practices completed 45 prior authorizations per physician per week, with physicians or their staff devoting nearly 14 hours each week to these tasks.1

The burden of prior authorizations has not gone unnoticed as medical societies, as well as state and federal legislators, are seeking to make improvements to a system that does not seem to be doing what it was intended to do.

Checks and Balances

Under medical or prescription drug plans, some insurance requests may need approval from a health insurance carrier prior to receipt of care. Requirements for prior authorizations were put in place, in theory, to optimize patient outcomes by ensuring they receive appropriate medications, imaging, or procedures; to determine if a drug or a procedure is the most economical option; and to cut down on unnecessary procedures within the health care system.

“Health care spending in the U.S. is high, and I can certainly understand the incentive to try to be more cost-effective,” said Nancy U. Lin, MD, director of the Metastatic Breast Cancer Program at Dana-Farber Cancer Institute in Boston. “However, I think prior authorization has become more and more ubiquitous and covers a larger scope of our practice than historically had been the case.”

Although no one can say with any certainty whether certain specialties face more of a burden when it comes to prior authorization requirements, there are a lot of new and expensive drugs within the hematology/oncology space, said Dr. Percival, who is also Chair of the American Society of Hematology’s (ASH) Committee on Practice.

However, it “seems like there is no rhyme or reason to [requiring prior authorization] because it is not just for new or expensive medications,” Dr. Lin said. In fact, a study of required prior authorizations within a breast oncology practice conducted at Dana-Farber found that almost 15% of required prior authorizations were for generic endocrine therapies, which had been standard of care for more than two decades.2

Within her practice, Dr. Percival said she has often come up against prior authorization hurdles when trying to prescribe well-established supportive care drugs like antifungals. Sometimes, Dr. Percival said, “it seems like it’s almost easier [for payers] to deny things and hope that patients or clinicians won’t end up appealing the decisions.”

Measuring the Success of Prior Authorization

The question of whether the implementation of prior authorizations has been successful depends on how success is measured.

  • Are physicians and patients abandoning treatment plans? If the success of prior authorizations is measured by treatment abandonment, then current requirements may be successful. Eighty percent of respondents in the 2022 AMA survey said that issues related to the prior authorization process sometimes led to treatment abandonment.1
  • Is success measured as payer cost savings? A 2023 ProPublica article detailing internal documents from one of the U.S.’s largest insurers, Cigna, revealed a system that allowed for instant rejection of insurance claims without ever opening the patient file. Using an artificial intelligence algorithm, the company was estimated to have rejected more than 300,000 requests in just two months by flagging “mismatches between diagnoses and what the company considers acceptable tests and procedures for those ailments,” leading to millions in savings for the payer (see SIDEBAR).3
  • Is success preventing unnecessary procedures? A retrospective review of insurance orders within a surgical oncology practice found that 44% required prior authorization; of those requiring prior authorizations, 13.1% were denied. More than half of the initial denials were overturned after peer-to-peer follow-up.4

The rate and reasons for denial varied from payer to payer, according to study researcher Jennifer Merrill, RN, MSN, APNP, of the Medical College of Wisconsin (MCW).

“We were hoping to see trends, but there was variability not only from payer to payer but from policy to policy,” Ms. Merrill said. “The 13% that were denied may seem like a small volume, but if you think about the time spent submitting documentation for the authorization plus peer-to-peer review time … that cannot be an effective use of time for payers or the medical care team.”

  • Is success measured by an increase in guideline-​concordant care? That is unclear, but in some cases, it may prevent guideline-​concordant care.

“We are all very well-trained to deliver this kind of care in very narrow specialties,” said Anai N. Kothari, MD, MS, assistant professor in the Division of Surgical Oncology at MCW. “If we believe a test or a procedure is important, that is generally because it is concordant with guidelines."

Hematologists and oncologists at large practices or large academic centers who order guideline-concordant care have teams or departments to help get prior authorizations approved and then appeal if they are not.

“My concern is that most oncology is practiced in the community,” Dr. Lin said. “If you are at a practice that does not have these resources, it’s easy to get beat down by the system, and that can create a lot of inequity. That means, depending on where you go as a patient, your doctor might not have the same team of people supporting and implementing the care they recommend.”

Lawmakers Step In

ASH’s Committee on Practice is engaged in trying to improve the processes around prior authorizations to allow physicians to provide the best care for their patients, Dr. Percival said.

In January, the Centers for Medicare & Medicaid Services (CMS) finalized its CMS Interoperability and Prior Authorization Final Rule, which will set requirements to improve the electronic exchange of health information and prior authorization processes.5

Starting in 2027, payers will be required to send prior authorization decisions within 72 hours for expedited requests and within seven calendar days for standard requests. Payers will also be required to include a specific reason for denying a prior authorization request and be required to publicly report prior authorization metrics.5

Although a step in the right direction, Devika Bhushan, MD, chief medical officer at Daybreak Health, pointed out that the federal rule will not go into effect until 2027, and it primarily affects state-regulated plans, not the majority of commercial plans.

In its comments on the proposed CMS rule, ASH had requested a 72-hour response time for standard requests and a 24-hour response time for expedited requests. Additionally, it urged the agency to apply prior authorization policies and requirements to drugs administered by physicians; however, as it stands now, the CMS provisions apply only to medical items and services.6

Two states have passed legislation that represents greater reforms to the prior authorization process.

In 2023, Washington enacted legislation that, among other things, shortens prior authorization timelines to five days for standard submissions and two days for expedited submissions as of January 1, 2024.7

“This is the first legislation of its kind to go into effect — and it sets a great precedent. In addition to the shorter time for turnaround, the legislation also requires the whole system to be electronic and integrated into the electronic health records, and also sets a higher bar for transparency related to denials,” Dr. Bhushan said.

Recent New Jersey legislation regarding prior authorization has set the bar even higher.8 Among the changes is a 24-hour turnaround time for urgent prior authorization requests.

“They are also requiring transparency with detailed reasons around why requests are denied, and they are requiring improved peer-to-peer conversations,” Dr. Bhushan said. “Physicians from the same specialty or with recent experience with that treatment have to review why or whether a medical decision is denied or accepted.”

As many as 28 other states have introduced bills to legislatures to try to reform the prior authorization process.9 Many of the bills include reforms suggested by the AMA, including reduced response times for prior authorization requests, qualified physician review of requests, prohibited retroactive denials after a request was preauthorized, and requiring new health plans to honor prior authorization from a previous plan for a minimum of 90 days.10

Physician Advocacy

Dr. Kothari said he learned three important things from his research into prior authorizations. First, physicians and other health care professionals can work with elected officials to draw attention to this issue.

“I may not know the nitty-gritty details of laws that have been implemented or are in the pipeline, but the fact that they are being discussed has an impact on changing some of the ways we think about this process and puts pressure on insurance companies to steward responsibility around prior authorizations doing what they were originally intended to do,” Dr. Kothari said.

Second, physicians who don’t already benefit from a centralized system for prior authorizations should advocate for institutional handling, when possible.

“Physicians will often say they will take care of the prior authorization or handle the peer-to-peer conversations, but practitioners must raise how much of a burden this process is so that steps can be taken for tangible improvements to be made to process,” Dr. Kothari said.

Finally, physicians should collaborate with patients and their families to try to change this process.

“Until you know from their perspective how challenging and burdensome this can be on their end, it is hard to feel empowered to make changes,” Dr. Kothari said.

Hidden Cost

In fact, the prior authorization process is a somewhat hidden or not-often-discussed burden for many patients, Dr. Lin said.

“As physicians, we don’t want to burden our patients with this, so my office takes care of it,” Dr. Lin said. However, even physicians’ best efforts to streamline the process can’t prevent prior authorizations from affecting patient care.

One recent survey study asked patients receiving cancer-​related care about prior authorizations and found that 22% reported not receiving the care recommended by their treatment team because of delays or denials. Around 70% reported a delay in care, with almost three-quarters of the delays lasting two or more weeks.11

According to the 2022 AMA survey, 33% of physicians said prior authorizations led to a serious adverse event for a patient, 25% said prior authorizations led to patient hospitalization, and 19% reported that prior authorizations led to a life-threatening event that required intervention to prevent permanent impairment or damage.1

Physicians interested in advocating for change to the prior authorization process can encourage patients who have experienced delays or denials to submit their stories to FixPriorAuth.org/stories. The stories and videos made available there demonstrate how patients and health care professionals are negatively affected by prior authorizations.

According to Dr. Bhushan, similar websites may be available at the state level. The California Medical Association encourages patients or health care professionals to submit their experiences at cmadocs.org/priorauth.

“These stories can be helpful on the legislative side so that people not only hear data points but get real color around how this affects patients’ lives and their families,” Dr. Bhushan said.

The ideal scenario, according to Dr. Bhushan, would be to get rid of most prior authorizations altogether.

“No state is going to be able to accomplish that, though,” she said. “The important thing is to work toward putting these guardrails in place to make sure that the people writing all the rules of prior authorizations are not solely the insurance companies.”

References

  1. American Medical Association. 2022 AMA prior authorization (PA) physician survey. 2023. Accessed May 28, 2024. https://www.ama-assn.org/system/files/prior-authorization-survey.pdf.
  2. Agarwal A, Freedman RA, Goicuria F, et al. Prior authorization for medications in a breast oncology practice: navigation of a complex process. J Oncol Pract. 2017;13(4):e273-e282.
  3. Rucker P, Miller M, Armstrong D. How Cigna saves millions by having its doctors reject claims without reading them. ProPublica. March 25, 2023. Accessed May 28, 2024. https://www.propublica.org/article/cigna-pxdx-medical-health-insurance-rejection-claims.
  4. Merrill JR, Flitcroft MA, Miller T, et al. Patterns of unnecessary insurer prior authorization denials in a complex surgical oncology practice. J Surg Res. 2023:288:269-274.
  5. gov. CMS finalizes rule to expand access to health information and improve the prior authorization process. January 17, 2024. Accessed May 28, 2024. https://www.cms.gov/newsroom/press-releases/cms-finalizes-rule-expand-access-health-information-and-improve-prior-authorization-process.
  6. American Society of Hematology. Advancing interoperability and improving the prior authorization process final rule. February 6, 2024. Accessed May 28, 2024. https://www.hematology.org/advocacy/policy-news-statements-testimony-and-correspondence/policy-news/2024/advancing-interoperability-and-improving-the-prior-authorization-process-final-rule.
  7. Washington State Hospital Association. Reminder: shorter prior authorization response timelines effective January 1, 2024. April 3, 2024. Accessed May 28, 2024. https://www.wsha.org/articles/reminder-shorter-prior-authorization-response-timelines-effective-january-1-2024/.
  8. New Jersey Legislature. Bill A1255. Session 2022-2023. May 24, 2022. Accessed May 28, 2024. https://www.njleg.state.nj.us/bill-search/2022/A1255/bill-text?f=A1500&n=1255_S1.
  9. Henry TA. 9 states pass bills to fix prior authorization. March 8, 2024. Accessed May 28, 2024. https://www.ama-assn.org/practice-management/prior-authorization/9-states-pass-bills-fix-prior-authorization.
  10. American Medical Association. Ensuring transparency in Prior Authorization Act. 2022. Accessed May 28, 2024. https://fixpriorauth.org/sites/default/files/2023-04/Health-Plans_Ensuring-Transparency-in-Prior-Authorization-Act-2022_Model-Bill.pdf.
  11. Chino F, Baez A, Elkins IB, et al. The patient experience of prior authorization for cancer care. JAMA Netw Open. 2023;6(10):e2338182.

The Future of AI in Prior Authorizations

The incorporation of artificial intelligence (AI) into the prior authorization process is inevitable, according to Leslie A. Lenert, MD, MS, associate vice president for Data Science and Informatics at the Medical University of South Carolina.

“The rule-based systems for authorizations are brittle and expensive to create with hundreds of thousands of rules to reflect what is being done at any point in time,” Dr. Lenert said. “They grow obsolete quickly, are error prone, and are hard to validate.”

In contrast, Dr. Lenert said, AI systems can be validated against large datasets, improved on, and revalidated, and can provide answers that are computable in seconds.

However, incorporating AI into the prior authorizations system — or any medical system — is not without drawbacks, as evidenced by pending lawsuits against Cigna and UnitedHealth for allegedly using “faulty” AI to deny medical coverage.1,2

“The first uses of AI for prior authorization date back to [IBM’s] Watson where they took their large rule book and loaded it into Watson as a tool for trying to reason backward; I don’t think that was terribly successful,” Dr. Lenert said. “I worry that codifying past decisions using AI would be wrong and would include all the biases and delays previously coded in.”

The opportunity lies in using more-advanced AI methods. Instead of using past decisions to guide AI for prior authorizations, Dr. Lenert has suggested certifying AI algorithms against panels of clinical experts, including patient representatives.3

“AI would then allow those panels and input to be amplified,” Dr. Lenert said. “It would be modeled on human judgment and avoid codifying errors and biases made in past judgments.”

References

  1. Napolitano E. UnitedHealth uses faulty AI to deny elderly patients medically necessary coverage, lawsuit claims. CBS News. November 20, 2023. Accessed May 29, 2024. https://www.cbsnews.com/news/unitedhealth-lawsuit-ai-deny-claims-medicare-advantage-health-insurance-denials/.
  2. Henry TA. Oversight needed on payers’ use of AI in prior authorization. American Medical Association. June 14, 2023. Accessed May 29, 2024. https://www.ama-assn.org/practice-management/prior-authorization/oversight-needed-payers-use-ai-prior-authorization.
  3. Lenert LA, Lane S, Wehbe R. Could an artificial intelligence approach to prior authorization be more human? J Am Med Inform Assoc. 2023;30(5):989-994.

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