An Overview of the Challenging Process of Prior Authorization: Medical Necessity for a Better Way

What Is Prior Authorization, and Why Are We Here?

The prior authorization (PA) process is time-intensive and inefficient for patients, physicians, and staff. Although described by payors as having the goal of ensuring appropriateness or “medical necessity” of proposed care, the reality is that it is designed with a narrow focus on reducing payer expenses by limiting access to care, increasing the administrative effort related to that care, and redirecting prescribed care to less expensive options. In its common form, PA functions to reduce the efficiency of treating patients for providers and medical practices, to limit access to treatments, and is a significant driver for professional dissatisfaction and physician burnout. Unfortunately, it also has the dangerous effect of reducing innovation in care delivery in ways that will lead to future problems. Whether it is called preauthorization, prior approval, or notification and prospective review, it is a process that calls for a better, more streamlined process. Step therapy, a payer process we are all too familiar with, typically with inflammatory bowel disease medications, usually includes PA functions. A detailed review and white paper has been recently published on this topic for further investigation.¹

PA, in the current health care environment, seems here to stay. Across private and government-supported programs, it is accepted to insert payor priorities into the doctor-patient relationship to reduce costs. A recent Congressional Budget Office report has indicated that the administrative expenses of PA in Medicare Part D are far lower than the savings it achieves by reducing utilization.^2,3 The stated intent of PA was to ensure high-quality evidence-based care, protect patient safety, and reduce costs, but this evolved to impact almost all physician–patient care interactions from medications, imaging, and other health care interventions. All payers have utilization management programs that limit drug spending. These programs exist internally, with reported unbiased evidence-based clinical decision support systems and clinical policy bulletins. For example, eviCore Healthcare is a third party to provide this service as a part of Cigna Corporation. AIM Specialty Health is a subsidiary of Anthem, Inc. Providers and groups struggle to stay ahead of frequent changes in regulations, payer protocols, issues with a generally manual process, and staffing shortages.

Negative Effects of Prior Authorizations on Patient Care

Negative impacts on patient care from the patient and physician perspective anchor on altered physician clinical decisions^4,5 to avoid PA denials.⁶ To elicit the gastroenterology perspective, the American College of Gastroenterology Legislative & Public Policy Council created a survey to gauge the burden of PAs⁴ in gastroenterology and found that more than 50% of respondents had patients who experienced serious adverse events because of the PA process. Furthermore, many physicians alter care discussions because of PA decisions and processes. The 2023 American Gastroenterological Association Policy Priority Survey⁷ revealed the number one concern to focus advocacy efforts (78% respondents) was reducing administrative burdens and patient care delays from increased PAs. Data also show a marked change in medication access because of the PA process in Medicare Advantage participants. Part D plans became significantly more restrictive over the last decade, rising from an average of 31.9% of drugs being restricted in 2011 to 44.4% of drugs being restricted by 2020. The prevalence of formulary exclusions grew quickly with plan formularies excluding an average of 44.7% of brand-name-only compounds in 2020.⁸

From the recent US Department of Health and Human Services Office of Inspector General report,⁵ Medicare Advantage Organizations sometimes delayed or denied Medicare Advantage beneficiaries’ access to services, even though the requests met Medicare coverage rules. Medicare Advantage Organizations also denied payments to providers for some services that met both Medicare coverage rules and Medicare Advantage Organization billing rules. Denied requests that meet Medicare coverage rules may prevent or delay beneficiaries from receiving medically necessary care and can burden providers.⁵

How Do We Currently Best Navigate This Ineffective System?

There are many effective ways to mitigate the difficulties and inefficiencies to help our patients get the care we desire and minimize our burdens (Figure 1). We are not alone in attempting to help formulate approaches to the PA process in its current form. The American Gastroenterological Association also offers on-demand education modules, such as the series “Navigating State Step Therapy Laws.”⁹ The American College of Gastroenterology developed a Practice Management Toolbox¹⁰ for recommendations on navigating the PA system, and the American Medical Association developed detailed tools as well.¹¹ Be aware that numerous appeals may be needed and can work.

Figure 1.

Evolve for success in prior authorization. CMS, Centers for Medicare and Medicaid Services; HFMA, Healthcare Financial Management Association; MGMA, Medical Group Management Association.

Recommended approaches include 5 broad areas to assist the practice and staff.

Leverage Available Technology

One consideration is electronic PA vendors, because these systems can submit requests directly from the electronic health record (EHR) system. The benefit of this approach is decreased staff time and problems with fax machines. Individual practice vetting is needed to assess quality, interface with the EHR, and ease of use. Access to these electronic PA vendors is limited, integration is challenging, and electronic PA is most useful presently with low-complexity cases. It is useful to automate check-in processes to include checking insurance benefits and verification. Much of this work can be completed using EHR or billing software.

Train Staff and Standardize

A goal should be to train staff and develop protocols to stay as efficient as possible. Focus on common PA requests. To streamline you can use resources from Healthcare Financial Management Association and Medical Group Management Association for staff training. Your team and staff should be updated on the most recent PA procedures, payer requirements, and platforms to ensure knowledge of the appeals process. Large practices may consider a pharmacy tech or manager to lead the PA program systemwide to facilitate standard effective approaches. If your practice can establish or develop a direct contact with payers or a consistent go-to contact, this can expedite resolution of issues. Payer portals can also be helpful for exchange of information and follow-up.

Encourage staff to document conversations with whom, dates, and record in EHR or other area of patient record appropriate for your practice.

Submit Prior Authorization Requests Early

For treatments that need PA, such as biologics, submitting early and anticipating possible delays in your health care plans is most effective. It is important to submit all the required information. Set up a system to follow up with payers at intervals to review status and advocate for timely decisions. Staff can typically use EHR reminders to automate this.

Document it Right the First Time

Key components include on the first submission, list the indication, prior failed therapies, and clinical support for the test or medication that the patient needs. Also, safety concerns should be documented, along with alternative inferior treatments that have not yet been tried. In your documentation, be aware of these typical insurer requirements and use your EHR system to help you document these needs seamlessly. These typically include how diagnosis was made and dates of diagnosis, disease severity, and use of accepted stage of condition or descriptors, and list treatment failures or other therapy outcomes. If a trial of requested therapy has been done, such as samples, document safety and positive outcome with therapy. When denials occur, your supporting evidence should optimally include guidelines from professional societies, systematic reviews, or clinical trials. In addition, the American College of Gastroenterology has developed supporting letters to use for common PA-required medications. The Crohn’s and Colitis Foundation also has letters to support inflammatory bowel disease management choices.

Patient Expectations

We recommend you and staff take the time to educate patients about the PA process and delays. Patients can also be proactive in their care and advocate with the insurance company or payer directly and can be an advocate for their care. Unfortunately, the current requirements from payers and PA limit the ability of nonclinical staff to intervene, and ultimately when working denials typically requires significant nursing and physician effort.

The peer-to-peer process is time-consuming and inefficient in our practices, but it is often necessary in the current health care environment. Typically, the peer-to-peer reviewer is different from the reviewer who initially denied the service and will therefore not be aware of reasons for the initial denial. Be prepared to review the clinical issues and have your documentation available. Specifically, include why your choice is appropriate in addition to the list of prior failed therapies, documented reasons for failure, and safety concerns with other medications not previously tried. Presently, the reviewer typically is not a gastroenterologist. Therefore, it is important to reference your documentation and practice guidelines to support your clinical decision. Be aware you can ask for a specialty-specific review. As noted previously, document the name of the reviewer and conversation. If denied, ask the reviewer for the supporting guideline used to determine its origin and if appropriate. During this discussion, being amiable but firm and acting as a patient advocate is best.

Legislative Advocacy and the Future of Prior Authorizations

On January 17, 2024, after years of advocacy by organized medicine, the Department of Health and Human Services and the Centers for Medicare and Medicaid Services released finalized new rules (CMS-0057-F) related to the PA and electronics exchange of health information.¹² These new rules will apply to Medicare Advantage, Medicaid, and the Children’s Health Insurance Program. The rules should require those plans to support electronic PA processes embedded within physicians’ electronic medical records and make increased automation and efficiency possible. CMS-0057-F should significantly enhance transparency around the PA process by requiring specific denial reasons and publicly reporting metrics concerning PA. It does not regulate how decisions are made or the use of artificial intelligence (AI). Although physicians should expect shorter PA response times in coming years, the rule does not apply to PA for medications and will not impact other federally regulated plans.

“Gold Cards” Not So Golden?

In a bill initially hailed as a triumph to reform the PA process, the Texas legislature passed House Bill 3459, also known as the “Texas gold card bill,” which endured a long and contentious rule-making process in the Texas Department of Insurance before finally taking effect October 1, 2022. The effectiveness of this legislation, however, remains a question. The Texas Department of Insurance reports that as of December 2023, only 3% of physicians and health care professionals had received gold cards¹³ because of the current eligibility threshold, which requires physicians to submit a minimum of 5 PA requests for each given service code. Unfortunately, without corrective actions in the new legislation submitted, the gold card legislation in Texas will remain largely unhelpful. Some of the key points of such legislation are as follows: creating congruency for exemptions across payors by aligning the definitions of the services for PA; establishing a third-party appeal process to initial determinations; requiring insurers to report exemptions and denials, by service, to the Texas Department of Insurance for auditing; expanding the definition of PA to include retroactive medical necessity reviews; and removing administrative licenses from peer-to-peer calls. Meanwhile, because a patchwork of so-called “gold card” legislation mirrored after laws passed in Texas and other state laws related to PA continues to move forward across the county¹³ these remedies should be strongly considered for those efforts.

Future for Prior Authorization

Experts at the American Medical Association have reviewed potential new billing codes for the time physicians and their support staff spend on PAs. Although discussions of these codes were postponed for the May 2024 agenda of the American Medical Association Current Procedural Terminology Editorial Panel, this represents an avenue for future advocacy in 2025, including new Current Procedural Terminology codes “to report services (physician, QHP, Clinical Staff) related to [payer] authorization of procedures,” referring to qualified health plans.¹⁴ There are also third-party companies that outsource or assist with the PA process, such as Experian Health, CoverMyMeds, and Surescripts. They are incorporating AI to speed up the process. According to McKinsey and Company Healthcare,¹⁵ these typically can help with member details, eligibility, and begin or recognize requests for additional information. At this point in the activity, the payer reviews with clinical staff and develops their decision. The current process, and including the peer-to-peer review, allows variable determinations, which can add to the challenges of PA. Of course, AI tools are dependent on the data and algorithms to build them. This has put Medicare Advantage Programs in the press recently, specifically a federal class action lawsuit against United Healthcare that asserts that the AI tool (nH Predict) had a 90% error rate, leading to thousands of elderly and disabled Medicare beneficiaries being denied medically necessary care.^16,17

Conclusions

As physicians, we face several hurdles in today’s health care environment and many impact our ability to provide effective and innovative care to our patients. We have discussed that the PA process is antiquated, inefficient, and although was developed on reasonable goals, has morphed into a barrier to care and an interloper into the physician-patient relationship. We have discussed some of the current concepts to assist in the navigation of this complex process from the physician practice standpoint, but be aware this is an evolving paradigm. Because there is more input and development with AI by both the payer and the practice sides, it is crucial that there are watchguards in place to ensure the ethical use of these tools. As PA has become a key tool by payers, it impacts a central part of health care delivery in 2024. It has been shown that poor delivery of PA process hurts patients and delays care. Physicians and patients need to continue advocating for PA changes and reform via our professional societies, such as the American Gastroenterological Association, American College of Gastroenterology, and American Society for Gastrointestinal Endoscopy together with patient advocate groups with parallel desires for improved care. It is essential that we continue to advocate for patients and implore all key stakeholders, such as physicians, leaders in the health care industry, political leaders, and technology developers, to work together. This will also need state and federal insurance regulators to ensure a robust process and avoid a progressive negative evolution and overuse.

Abbreviations used in this paper:

AI

artificial intelligence

EHR

electronic health record

PA

prior authorization