Speeding Up Prior Authorization, Healthcare’s Slowpoke

The federal government is addressing delays caused by insurers requiring prior authorization before medical professionals can provide some care. Experts say speeding up the process can aid patients and cut healthcare costs.

Fumiko Chino, M.D.

“Cancer biology doesn’t wait for bureaucracy” and delays can result in “catastrophic outcomes,” Fumiko Chino, M.D., a radiation oncologist at Memorial Sloan Kettering Cancer Center in New York, said during a recent webinar on prior authorization held by KFF, formerly known as the Kaiser Family Foundation. Some cases make the news.

Even physicians who provide care that is less urgent can feel the burden of prior authorization. The process can “divert valuable time and resources away from direct patient care,” Steven P. Furr, M.D., president of the American Academy of Family Physicians and a family physician in Jackson, Alabama, said in an email to Managed Healthcare Executive.

Steven P. Furr, M.D.

Furr testified before Congress in 2023 about the harm that requiring prior authorizations can cause patients and physicians. “I told lawmakers that from my experience, I know that some insurance plans made it extremely difficult to receive prior authorization for necessary tests such as MRIs, nerve conduction studies, or cardiac stress tests and that it can be easier to refer patients to a specialist and let them order the test. This should not be the case — especially given that family physicians have long-term, trusting relationships with their patients.”

However, insurers have long argued that prior authorization is an important part of what they do to control healthcare costs and reduce spending on wasteful care. Troyen Brennan, M.D., M.P.H., an adjunct professor of health policy and management at the Harvard T.H. Chan School of Public Health and a former chief medical officer at Aetna and CVS Caremark, said during the KFF webinar that the goal of prior authorization is to “reduce ineffective care,” with 15% to 30% of care estimated to be ineffective.

New CMS rules

To try to address concerns about prior authorization, CMS issued a set of new rules in January. The changes only apply to Medicare Advantage plans, Medicaid and Children’s Health Insurance programs, and health plans on the federally facilitated health exchanges. Starting in 2026, those insurers will have to make prior authorization decisions within 72 hours for urgent requests and within seven days for nonurgent ones. That cuts by half the approval time frame for nonurgent requests. Payers also must disclose why they are denying a request and report prior authorization metrics. Starting in 2027, insurers must implement a prior authorization application programming interface, which is designed to create a more efficient process between providers and payers by automating the process. According to the U.S. Department of Health and Human Services, the changes would save an estimated $15 billion over 10 years.

Results of a KFF study published in 2023 found 35 million prior authorization requests were submitted to Medicare Advantage insurers in 2021 and more than 2 million were fully or partially denied. Only 11% of denials were appealed. For those that did go to appeal, in more than 80% of cases the denials were fully or
partially overturned.

Prior authorization and other administrative burdens “are a fierce contributor to burnout and play a role in driving physicians away from the workforce and worsening physician shortages,” and many practices have to hire professionals just to deal with the requests, Furr said.Family physicians have long asked for policies that would streamline prior authorizations, according to Furr.

Brennan said that “reasonable insurers” publish their prior authorization criteria and that approving drugs is easier because payers make those determinations based on what the label outlines a medication is indicated for. Prior authorization processes vary from payer to payer, Chino said, and some use outdated templates for providing care. Their formularies change, so something that is approved one year may not be allowed the next. Chino said with transparency surrounding denials, providers “can pivot” when seeking approval for patient care.

Anna Howard, J.D.

Anna Howard, J.D., principal, policy development, for the American Cancer Society Cancer Action Network, said during the KFF webinar that the prior authorization process “can lead to higher costs per patient” due to delays and called the system “penny-wise and pound- foolish.” By not receiving approval for what their doctors believe is the best form of care, patients may have to go with their second-best option or with treatments that don’t take comorbidities or side effects into account, Howard said.

Using artificial intelligence

Insurers seem to be quite interested in changes that would harness artificial intelligence for some aspects of prior authorization. AHIP, the trade association for health insurers, said in an email to Managed Healthcare Executive that health plans have been focusing on broader use of electronic prior authorization. A 2022 survey by AHIP of more than two dozen commercial health plans found that 75% were using electronic prior authorization to streamline prescription medication requests and almost 90% were using it to streamline requests for medical services.

“The whole process could be completely automated today,” Brennan said, which would help lower insurers’ costs. But Howard questioned whether the data being used in the algorithms are the most current available.

Kaye Pestaina, J.D.

Some states are already taking matters into their own hands. Almost 90 bills related to prior authorization were pending in 30 states, the American Medical Association reported last year. “There’s been a lot of activity at the state level in the past two to three years,” affirms Kaye Pestaina, J.D., vice president and director of the program on patient and consumer protection for KFF. Some states have set deadlines for prior authorization decisions; in New Jersey, for example, the time frame to approve requests is 24 hours for urgent requests and 72 hours for standard ones, Pestaina says. Others are looking to apply rules to commercial insurers, state-based marketplaces and employer-sponsored plans. There are also proposals to set rules for “gold carding” programs that require health plans to waive the prior authorization process for providers who have a good track record of having their prior authorization requests go through. Texas has a gold card program law on the books.