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Payers Failing to Follow Through on Prior Authorization Reforms

Analysis  |  By Jay Asser  
   June 02, 2022

A physician survey by the American Medical Association (AMA) reveals the administrative burden still falls on providers.

Health insurers are not holding up their end of the bargain on mutually accepted prior authorization reforms, according to a new physician survey by the AMA.

Findings from the survey, which compiles the experiences of 1,000 physicians from December 2021, show that payers are not upholding a 2018 voluntary agreement between them, the AMA and other national organizations representing pharmacists, medical groups, and hospitals.

The consensus statement highlighted five key prior authorization reforms to increase efficiency, promote access, and reduce administrative burdens.

One of the reforms focuses on encouraging the use of programs that selectively implement prior authorization requirements based on providers' performance. However, only 9% of the physicians in the AMA survey reported contracting with insurers that offer programs that exempt providers from prior authorization.

Meanwhile, 84% of physicians reported that the number of prior authorizations required for both prescription medications and medical services had increased over the past five years, running counter to the reform encouraging revision of prior authorization requirements.

Though the consensus statement agreement also included reform on transparency and easy accessibility of prior authorization requirements, 65% and 62% of physicians reported difficulty in determining whether a prescription medication or medical service, respectively, requires prior authorization.

The fourth reform outlined in the agreement centers on continuity of patient care, encouraging protections for patients during a transition period. Yet 88% of physicians reported that prior authorization sometimes, often, or always interferes with continuity of care.

Finally, only 26% of physicians reported that their electronic health record system offers electronic prior authorization for prescriptions, going against the agreement to reform automation to improve transparency and efficiency.

Despite providers and payers seemingly being on the same page about the importance of reforming prior authorization, the AMA survey makes it clear there is still plenty of work to do as far as implementation.

"Waiting on a health plan to authorize necessary medical treatment is too often a hazard to patient health," AMA president Gerald E. Harmon, M.D., said in a statement.

"Authorization controls that do not prioritize patient access to timely, optimal care can lead to serious adverse consequences for waiting patients, such as a hospitalization, disability, or death. Comprehensive reform is needed now to stem the heavy toll that continues to mount without effective action."

AMA's release of the survey comes weeks after a report by the Office of Inspector General which found that Medicare Advantage organizations (MAOs) often unnecessarily delay or deny services for medically necessary care.

Based on the findings, 13% of prior authorization denials met Medicare coverage rules and 18% of payment denials met Medicare coverage and MAO billing rules.

To combat the issue, the Seniors' Timely Access to Care Act is set up to be considered by the House of Representatives after surpassing 290 co-sponsors.

The bipartisan legislation, which aims to improve prior authorization processes for Medicare Advantage plans, has widespread support.

Jay Asser is the contributing editor for strategy at HealthLeaders. 

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