By TERRY LYNAM //
The essence of good medical care begins with the physician-patient relationship – which is also the origin of the biggest conflict between healthcare providers and insurers.
To help ensure patient safety, common sense dictates that doctors should be making decisions about medical care, based on a patient’s condition, age, medical history and other factors. And this happens every day, as doctors make judgment calls on the type and intensity of care prescribed, and the safest place to deliver it.
But many insurers insist their corporate medical directors be the arbiters who decide whether hospitalization, for instance, or a certain procedure or pharmaceutical prescription is a “medical necessity” – without ever laying eyes on the patient, and accepting no liability if things go wrong.
For decades, this practice – called “prior authorization” – has been the focus of intense wrangling between providers and insurers. But doctors say insurers’ reliance on this tool has increased in recent years, as insurers try to hold down rising healthcare costs, mostly by avoiding “unnecessary” or “ineffective” treatments and expensive drugs.
Physician practices, hospitals and health systems hate the paperwork and say it adversely affects patient care.
According to a 2022 survey by the American Medical Association, the average medical practice completes 45 prior authorizations per physician every week. Ninety-four percent of doctors say they’ve had to delay patient care waiting for insurance approvals; one-third claim the prior authorization process has led to serious adverse events, including hospitalizations (25 percent), disability or even death (9 percent).
Change is gonna come: But not until 2026 at the earliest … and some wonder if President Joe Biden’s prior-authorization updates go far enough.
A 2023 study by JAMA Network Open, the journal of the AMA, found that 73 percent of cancer patients who needed prior authorizations experienced a delay in care of two weeks of more.
In response to doctor and patient outcry, the Biden Administration announced new rules earlier this year to shorten the timeframe in which insurers must act on prior-authorization requests – at least for the approximately 160 million American consumers covered by Medicare Advantage, Medicaid and Affordable Care Act health plans, as well as the federal government’s Children’s Health Insurance Program.
By automating what is currently a manual and often time-consuming process, the rule changes would speed up the approval process to as little as 72 hours (seven calendar days for non-urgent requests) and require insurers to provide doctors with additional information about the status of decisions and reasons for denials.
The U.S. Centers for Medicare & Medicaid Services says these actions will “reduce the burden on patients, providers and payers, resulting in approximately $15 billion of estimated savings over 10 years” to physician practices. The policy changes are slated to roll out over 2026 and 2027.
“When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner,” U.S. Health & Human Services Secretary Xavier Becerra says in a statement. “Too many Americans are left in limbo, waiting for approval from their insurance company.”
Xavier Becerra: Time is of the essence.
While the rule changes were applauded by the AMA and the American Hospital Association, other healthcare leaders and patient advocates – and many states – complain that the federal government’s efforts don’t go far enough, especially when it comes to approval turnaround times, which they say are still too long.
Another big complaint is that the new federal rules don’t apply to prescription drugs, which were excluded from the new policy because of what CMS described as “operational complexities.”
For cost reasons, insurers closely scrutinize prior-authorization requests for so-called “medical benefit drugs,” which are used to treat cancer and other chronic conditions and are administered by physicians in a hospital or doctor’s office, rather than picked up at a pharmacy. Delays or denials of these medication requests have outraged patients and providers, leading to many well-publicized news stories that are driving demands for stronger action.
In response, New Jersey, Washington State and the District of Columbia have already enacted their own, stricter prior-authorization laws, rather than relying on the federal government to take the lead. And more than two dozen other states have introduced similar bills.
There are also bipartisan federal efforts afoot to codify – and perhaps strengthen – CMS’s prior-authorization changes. Politicians on both sides of the aisle are looking to revive legislation that was approved by the House of Representatives in 2022 but later stalled in the U.S. Senate.
Given their critical role in the healthcare ecosystem, providers and insurers must be aligned in their commitment to strengthen our delivery system. Central to that effort is giving physicians the autonomy to make decisions on what treatments are medically necessary for patients.
The decades-long tug-of-war between providers and insurers over authorizations and reimbursement payments does nothing but incur massive administrative costs for both sides, driving up the overall cost of healthcare for employers, unions, governments and consumers.
Terry Lynam is a communications consultant and former senior vice president/chief public relations officer for Northwell Health.
