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3 Facts and 3 Predictions for Prior Authorization

Analysis  |  By Laura Beerman  
   March 10, 2022

Evidence-based prior authorization automation is on the rise as physicians and payers look for better ways to do business with one another.

Recent physician surveys show that nearly 80% of physicians have experienced an increase in payer prior authorization (PA) requirements, with more than a third of delays resulting in adverse patient outcomes. These were among the results from a MGMA poll and an American Medical Association (AMA) survey. Countering this, evidence-based PA automation is on the rise as physicians and payers look for better ways to do business with one another while Congress reintroduces related mandates.

3 PA facts

1. PA is rising and falling.

Seventy-nine percent of MGMA medical groups responded that payer PA requirements increased in the past year. This is lower, however, than pre-pandemic years including 2019 when 90% of association members reported increases.

2. The AMA survey numbers are serious and also deserve a deeper dive.

While 93% of physicians stated that PA slowed needed care, this result consisted of 14% responding "Always" and 42% "Often." The type and seriousness of care delays matters when considering these numbers but so do the negatives outcomes which deserve lower thresholds. In the same AMA survey, 34% of physicians reported that PA led to "a serious adverse event," including hospitalization (24%) or a life-threatening or serious intervention (18%). Some 8% reported that PA contributed to disability, permanent negative events, or death.

3. Other AMA survey results show significant PA burden on medical staff.

The pandemic put increased resource and revenue pressure on physician practices, with some staff members working only on PAs (40%). In the same survey, 88% of physicians report this burden is high or extremely high.

3 PA predictions

1. As PA automation increases, burdens decrease.

PA automation has also doubled. In 2021, some 26% of plans had a fully electronic PA process compared to 13% in 2019—a pandemic-driven increase. These results are from the ninth annual report from the Council for Affordable Quality Healthcare Inc. (CAQH), which reported a corresponding 21% decrease in PA volume in 2021. In 2022 and beyond, expect payer PA automation pilots to expand among smaller plans and larger players alike.

2. Providers demand more evidence.

Given that 35% of payer PA is still fully manual per the CAQH Index, more automation is needed and based on evidence. In the AMA survey, 29% of physicians reported that PA criteria are rarely (25%) or never (4%) evidence-based. In addition to PAs rooted in proven clinical guidelines, physicians want plans to consider their own history of following such guidelines and securing high PA approval rates.

AMA president-elect Jack Resnick Jr., MD, told HealthLeaders that PA must be "right-sized." Resnick adds: "Requiring prior authorization for drugs or medical services with consistently high approval rates—what many would call 'low-value' prior authorizations—is wasteful for physicians, patients, and health plans."

If payers can deliver and partner with providers on the data, automation implementation can be more efficient and cost-effective.

3. Congress reconsiders legislative mandates.

In its poll reporting, the MGMA calls for Congress to pass the Improving Seniors’ Timely Access to Care Act. The House and Senate introduced companion bills in 2021 that would "establish an electronic prior authorization process to streamline approvals and denials." Focused on MA plans—and in response to an HSS Office of Inspector General finding that 75% of MA PA denials were reversed—the legislation would also help create national standards and processes to improve transparency and communication. Predictions on passage are uncertain but multiple signs point to a federal agenda that will continue the innovations the pandemic accelerated.

Related: Increase in Prior Authorization Automation Has Potential for Major Cost Savings

Laura Beerman is a contributing writer for HealthLeaders.

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