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Published: 2/5/2024

ACP calls for improving prior authorization processes and reducing administrative burdens that negatively impact physicians, their patients, and the health system as a whole.

Background

Prior authorization is a common practice of health insurers in which physicians must first secure approval before moving forward with a patient’s medications, tests, or procedures to ensure the insurer covers that care.  This practice involves paperwork and phone calls, as well as varying data elements and submission mechanisms that can force physicians to enter unnecessary data in electronic health records (EHRs) or perform duplicative tasks outside of the clinical workflow.

In 2017, the Annals of Internal Medicine published “,” which made recommendations to address the issue of administrative tasks to mitigate or eliminate their adverse effects on physicians, their patients, and the health system as a whole.  ACP’s Patients Before Paperwork Initiative serves as the foundation for these policy recommendations to revise, streamline, or entirely remove burdensome administrative tasks such as prior authorization.

Prior authorization is one of the most onerous administrative burdens that physicians face, forcing them to divert significant amounts of time and focus away from patient care. A by the American Medical Association (AMA) found that 86% of respondents reported that prior authorizations resulted in increased use of healthcare resources, leading to waste rather than the cost savings claimed by insurers.  Approximately two-thirds of respondents reported that prior authorization requirements led to either diversion to ineffective initial treatments or additional office visits, 64% and 62% respectively.  According to the same survey, practices complete 45 prior authorizations per physician per week on average, with physicians and their staff spending an average of 14 hours weekly on prior authorizations. Requirements for prior authorization can also create financial burdens for physicians, hospital systems, and other entities, such as needing to hire staff exclusively for this purpose.  show the average cost for prior authorization approval on primary care practices ranged from $2,161 to $3,430 annually per full-time physician.

In addition to the impact on physicians, prior authorization requirements have been found to harm patient care. The 2022 AMA survey found that for patients whose treatment required prior authorization, 94% of physician respondents said the process led to delays in care for patients.  80% reported that delays due to prior authorization resulted in patients abandoning their recommended course of treatment either sometimes or more often.  Of the physicians surveyed, 33% had seen a prior authorization requirement lead to a serious adverse event for a patient, including 25% who reported prior authorization leading to a patient’s hospitalization.  Overall, 89% of respondents perceived prior authorization to have a somewhat or significantly negative impact on patient clinical outcomes.

In addition to working for public policy solutions, ACP also advocates directly with private insurers to call out particularly egregious prior authorization requirements.  In May 2023, ACP joined other health organizations in a letter to United Healthcare, the largest private payer in the United States, urging them not to implement a prior authorization program for gastrointestinal endoscopy, raising concerns about the negative impacts for both patients and physicians.  Direct feedback from and the stories of physicians, other health care professionals, and patients has often been key to successful prior authorization reforms.  In August 2023, Cigna the removal of approximately 25% of medical services from prior authorization requirements, with plans to remove nearly 500 additional codes for Medicare Advantage (MA) plans by the end of 2023.  In a statement on the removals, Cigna noted that “we’ve listened attentively to our clinician partners and are deliberately making these changes as a result.”

Federal Activity

At the outset of the 118th Congress in January 2023, ACP wrote a letter to House and Senate leadership identifying three policy solutions with bipartisan support to issues impacting our health system, including prior authorization reform. The letter urged Congress to pass the Improving Seniors’ Timely Access to Care Act, which would simplify the prior authorization process to determine if a prescribed procedure, service, or medication is covered by a health plan in MA. In a September 2023 letter, the College also encouraged leaders of key Congressional committees to include that legislation and reform prior authorization as part of a package of health reforms.  ACP supports streamlining for other group health plans as well, though reform within MA plans is especially urgent following a 2022 that detailed abuse in the prior authorization process in which “Medicare Advantage insurers sometimes delayed or denied beneficiaries’ access to services, even though the requests met Medicare coverage rules.”

In addition to legislative advocacy, ACP has engaged in extensive regulatory advocacy to reduce the administrative burden caused by prior authorization.  Some examples include:

• On January 17, 2024, the Centers for Medicare and Medicaid Services (CMS) released the Interoperability and Prior Authorization Final Rule.  This rule enacts several important reforms ACP has called for, including requirements for insurers to provide a specific reason for prior authorization denials and the establishment of time frames for responses to requests depending on urgency.  Along with our partners, ACP spoke out repeatedly on the importance of finalizing this rule.  The College also sent another letter as part of its membership in the noting that achieving prior authorization reforms will require federal support of more robust real-world testing of the interoperability standards and implementation guides intended to facilitate automation.
• In February 2023, ACP sent a letter to CMS commending the agency for its proposed rule that would increase oversight of MA plans, better align them with traditional Medicare, improve health equity, address access gaps in behavioral services, and further streamline prior authorization processes. The letter noted that collectively, these policy changes are among the most impactful CMS has proposed to the MA and Part D programs in recent years.
• In July 2023, ACP wrote to HHS to provide input on the Medicaid and Children's Health Insurance Program Managed Care Access, Finance, and Quality proposed rule.  The College’s comments call on the Department to address egregious prior authorization policies as part of a remedy plan. The letter also noted ACP policy recommends that state contracts with Medicaid managed care plans should ensure that the health plan’s standards of care are consistent with those in the medical community.
• ACP also provided comments for a 2022 request for information from the Office of the National Coordinator for Health Information Technology’s regarding electronic prior authorization standards, implementation specifications, and certification criteria.  In that letter, ACP urged standardization of the process and procedures for reporting electronic prior authorization criteria to potentially ease a major source of administrative burden for clinicians who currently use different data, formats, and procedures to process prior authorization requests that vary based on a patient’s health plan. 

State Activity

While federal policymakers consider changes that would impact prior authorization processes across the country, a growing number of states are seeking to address the harm caused by prior authorization requirements with their own reforms.  So far in 2024, at least have been introduced in 22 states to reform prior authorization requirements for procedures, tests, treatment, and prescriptions.

Many proposals for prior authorization reform contain one or a combination of the following types of provisions:

• Requirements on response time to requests (e.g., 24 hours for urgent, 48 hours for nonurgent requests)
• Mandates that prior authorization requirements must be evidence-based, such as being based on peer-reviewed clinical data
• Requirements that denials are made by a physician of the same specialty
• Allowing authorizations to continue to be valid for medication dose changes or for ongoing management of chronic conditions
• Requirements for insurers to publicly release data on prior authorizations by different medications or services
• Restrict insurers from requiring other administrative burdens or related measures in addition to a prior authorization, such as step therapy protocols

States have also considered “Gold Card” legislation that would exempt physicians with specific prior authorization approval rates over a period of time, typically six months, from prior authorization requirements on specified services.  To date, Michigan, Louisiana, Texas, and West Virginia have enacted such laws.  As states experiment with gold card models, it remains somewhat unclear exactly what impact these programs are having on the overall administrative burdens of prior authorization, with limitations on what plans or specific services qualify for gold carding and some ACP members reporting that participation has been cumbersome.

Unless federal action is taken that sets new standards for all prior authorizations nationwide, laws and regulations will continue to vary on a state-by-state basis.  To see the laws in your state as of 2022, please see prepared by the AMA.

References

• Patients Before Paperwork: Reducing Administrative Burden in Medicine
• ACP’s 2023 Advocacy Priorities: Reduce Administrative Burden in Medicine
• ACP Webinar with Medicine Forward: Breaking Bad! Prior Auth Harms the Patient Physician Relationship
  • Recording of Part One (5/31/22)
  • Recording of Part Two (10/3/22)
• American Medical Association