Well, that’s it for healthcare reform. I really think the U.S. can have its cake and eat it too. In other words, we can have universal healthcare and eventually reduce healthcare spending in the process. Check out Parts I-VIII of this series for details.

I’m too pooped to continue with this topic for now, so I’ll close with something from the archive.

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Prior Authorization: Purported Benefits, Potential Harms, and Possible Fixes: 

Prior Authorization has been getting a lot of bad press lately, thanks to the tragic murder of a healthcare insurance CEO and the outpouring of sympathy for his assassin, whose hate of the healthcare insurance industry appears to have struck a cord with the masses. Here’s a typical headline: 

‘Delay’ and ‘Deny’: The Outrage Over Prior Authorization. Subtitle: An insurance practice buries doctors in paperwork, sometimes with disastrous results. by Chris Stanton/ Intelligencer December 11, 2024

So, what’s the problem with prior authorization, and if there is a problem, how can it be fixed?

That’s a lot to address in a measly little post, so I’m going to simplify my task by commenting on a single opinion piece in the Journal of the American Medical Association (Anderson, Darden & Jain, 2022). Comments follow indented excerpts.

Introduction 

“Prior authorization is a form of utilization management whereby a clinician must receive insurer approval prior to rendering medical service. Medicare Advantage (MA) insurers, which now cover more than 48% of Medicare beneficiaries, commonly use prior authorization to manage spending and use for their enrollees. 

The use of prior authorization is also increasing in traditional Medicare. Historically, traditional Medicare did not use prior authorization requirements, but with rising health care costs, the Centers for Medicare & Medicaid Services (CMS) is reevaluating this policy and has introduced prior authorization for a small number of services (eg, home health) and certain surgical procedures (eg, anterior cervical fusion surgery).” 

Purported Benefits

“Prior authorization aims to reduce low-value care by ensuring appropriate use criteria are met and the right care is delivered to the right patient at the right time. Thus, it aims to increase guideline-concordant care and reduce unnecessary spending. Prior authorization generates a check on potential overuse of medical services stemming from supplier-induced demand.  

Additional potential benefits of prior authorization include potential downstream reductions in premiums and out-of-pocket costs for patients due to better care allocation, and reduced medical service claim denials for clinicians and health care centers. When applied to medications, prior authorization can also provide an additional level of safety review to reduce the use of contraindicated treatments or overuse of controlled substances.”

Comment: The authors don’t tell us why Medicare and insurers are increasingly relying on prior authorization, nor do they address the prevalence of unnecessary or low-value medical care or the risks associated with such care. That’s a huge omission. Potential harms should be weighed against potential benefits, the better to find solutions that preserve benefits while reducing harm. As for the prevalence and risk of unnecessary and low-value care, evidence suggests that up to one-fifth of healthcare spending is wasted on such care and around 10% of patients are harmed in the process.”  

Potential Harms of Prior Authorization 

“For patients, omissions or errors in the medical record, or inappropriate application of clinical practice guidelines, can trigger inappropriate denials of health care services.   

According to a 2022 Office of Inspector General report, 13% of 12 273 requests that MA [Medicare Advantage] insurers denied met Medicare coverage rules and … 75% of approximately 863 000 denial appeals were ultimately successful, raising concerns that MA plans were denying services and payments that initially should have been approved.  

Poorly implemented administrative processes, such as mandatory waiting periods or other reasons for prolonged time required to conduct a prior authorization review, can also result in care delays. … initiation of lifesaving measures, such as chemotherapy or limb amputation for sarcoma, can be affected by the timing of care.  

Furthermore, an unintended consequence of prior authorization is that denials may increase the use of other health care services and total spending. For instance, patients in need of spine surgery may be directed toward other treatments (such as physical therapy or spinal injections), but may ultimately undergo surgery, resulting in increased total cost of care and prolonged pain and functional limitations.  

In addition, the prior authorization process may potentially undermine the therapeutic alliance between patients and clinicians and ultimately undermine trust.” 

Comment: it’s unclear whether the denials that were later reversed were inappropriate denials or appropriate denials based on errors or omissions that were subsequently corrected upon appeal. Also left unmentioned is the percentage of denials that were not appealed. For example, a Kaiser Family Foundation study found that just one in ten (9.9%) prior authorization requests that were denied were appealed in 2022. As for denials increasing the use of other treatments - yes, that’s the point. For example, the American Society of Anesthesiologists estimates 20–40% of back surgeries fail. It’s a good idea to try other treatments before surgery, with the understanding that some patients may ultimately need surgery. Also, the authors don’t explain how prior authorization would harm the “therapeutic alliance”, so that one’s hard to address. What does a healthy doctor-patient alliance require? Hopefully, not the illusion that doctors are infallible. 

“From the perspective of clinicians and health care centers, prior authorization presents a substantial administrative burden… care delays and care abandonment.

Another source of frustration for clinicians may arise from the fact that the appeals to overturn prior authorization decisions may often involve peer-to-peer discussions that are formulaic, or may be conducted by nonpracticing clinicians or those with inadequate clinical expertise in the specific clinical domain.”  

Comment: Yes, obtaining prior authoritarian is time-consuming. The process needs to be streamlined, ideally in a way that doesn’t undermine its aim: to reduce unnecessary care and spending. As for nonpracticing clinicians doing utilization reviews, I imagine few practicing clinicians would have the time or inclination for that side-gig. It’s perfect for retired or semi-retired doctors who maintain their licenses and keep up with the latest developments in their field.

 Possible Fixes

Plans should use an electronic-based prior authorization process with time-bound requirements for initial and appeal decisions. 

Plans should be mandated to report guidelines used to make prior authorization decisions and seek input from respective medical societies and stakeholder groups on an annual basis.

Comment: These are reasonable suggestions, though the devil’s in the details. Time-bound requirements have to be doable for insurers, especially given staff shortages in the healthcare insurance industry.  

References:

Anderson KE, Darden M, Jain A. Improving Prior Authorization in Medicare Advantage. JAMA. 2022; 328(15):1497–1498.  doi:10.1001/jama.2022.17732