Navigate the healthcare industry
Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.
Prior authorization, which requires advanced approval from an insurance company before a doctor administers care, aims to control costs and ensure the provided medical services are appropriate, according to the Kaiser Family Foundation.
However, a March survey from the American Medical Association (AMA) found that over half of the surveyed practicing physicians believe prior authorization has increased patient harm and healthcare overuse due to additional office visits and “ineffective initial treatment.”
Approximately one-third of the 1,001 physicians surveyed said that prior authorizations led to serious adverse effects for their patients, including hospitalization or death.
Over 90% of physicians said prior authorization delayed patient access to necessary care, and 64% said it led to ineffective initial treatments, per the survey. Among other reasons, the doctors attributed this phenomenon to step therapy, in which insurers sometimes require a patient to try a less expensive drug before “stepping up” to a pricier option.
On average, physicians and their staff spend almost two business days, or 14 hours, per week completing prior authorizations, the survey found. Manually filing each prior authorization can take up to 45 minutes, according to the 2019 CAQH Index, which analyzes the healthcare industry’s adoption of electronic administrative transactions.
“Health plans continue to inappropriately impose bureaucratic prior authorization policies that conflict with evidence-based clinical practices, waste vital resources, jeopardize quality care, and harm patients,” outgoing AMA President Jack Resneck Jr. said in a statement. “The Byzantine system of authorization controls is rife with opportunities for reform, and the AMA continues to work with federal and state officials on legislative solutions to reduce waste, improve efficiency, and protect patients from obstacles to medically necessary care.”
In 2022, the Centers for Medicare and Medicaid Services proposed new requirements to use electronic data exchanges to streamline prior authorization processes. The healthcare industry could save up to $454 million annually by switching to electronic prior authorizations, according to the 2019 CAQH Index.