Healthcare Groups Offer 21 Prior Authorization Improvements

January 25, 2017 - A coalition of 17 healthcare industry groups recently called on health plans, benefit managers, and other healthcare stakeholders to change prior authorization requirements to improve care continuity, reduce provider burdens, and improve timely decision-making.

“Strict or bureaucratic oversight programs for drug or medical treatments have delayed access to necessary care, wasted limited healthcare resources and antagonized patients and physicians alike,” stated Andrew W. Gurman, MD, President of the American Medical Association (AMA), a group in the coalition.

“The AMA joins the other coalition organizations in urging health insurers and others to apply the reform principles and streamline requirements, lengthy assessments and inconsistent rules in current prior authorization programs.”

The coalition highlighted how existing prior authorization requirements burden providers and detract from patient-centered care delivery. For example, an AMA survey found that medical practices send an average of 37 prior authorizations per physician a week, totaling 16 hours of staff time.

The AMA survey also revealed the following prior authorization challenges:

READ MORE: What Is Healthcare Revenue Cycle Management?

• 75 percent of physicians surveyed said prior authorization burdens were high or extremely high

• Over one-third stated that their practice employs an individual exclusively for prior authorizations

• 60 percent of physicians reported that prior authorization decisions take at least 1 business day and over 25 percent said the decisions take 3 or more business days

• Almost 90 percent of physicians stated that prior authorizations sometimes, often, or always delay care access

A recent CAQH report revealed similar prior authorization issues. CAQH reported that manual prior authorizations take 20 minutes of provider time on average to process, while electronic ones take 6 minutes.

READ MORE: Top Opportunities to Reduce Wasteful Healthcare Spending

Not only would electronic prior authorizations save providers time, but an automated solution could save practices $5.61 per transaction.

However, electronic prior authorization adoption among commercial health plans was only at 18 percent in 2015, the report found.

To improve prior authorization programs, the industry groups developed a set of 21 principles that payers and other stakeholders should adhere to when reforming or creating utilization management programs and prior authorization requirements. The principles are divided by five broad categories: clinical validity, continuity of care, healthcare transparency and fairness, timely access and administrative efficiency, and alternatives and exemptions.

Prior authorization requirements should demonstrate clinical validity, not just cost-containment

Utilization management programs should follow three principles to ensure they demonstrate clinical validity, the coalition stated. The principles include basing prior authorization requirements on accurate clinical criteria, increasing flexibility in programs, and offering an appeals system.

Programs should not be centered on only reducing healthcare costs. While prior authorizations protect patients from costly services that will not be covered by their plans, programs should still “be based on accurate and up-to-date clinical criteria.”

READ MORE: How to Maximize Revenue with Improved Claims Denials Management

In addition, programs should be flexible, so any potential overrides or appeals can be managed in a timely manner. Not every recommended drug or treatment will work for every patient, so programs should account for unique situations, such as patient comorbidities or intolerances, that require different services and develop a timely override process

A formal appeals process should also be part of utilization management programs. The coalition recommended a toll-free number that providers can call to speak to another qualified provider about adverse utilization management determinations and medical necessity issues.

Utilization management programs should support care continuity

Following prior authorization or step therapy requirements can interrupt care continuity at the provider level. Therefore, utilization management programs should adhere to four principles that support continuous care.

First, programs should offer a minimum 60-day grace period for prior authorization or step therapy adherence if a patient is already on a treatment plan when they enroll. Forcing patients to stop an existing treatment could worsen outcomes, the coalition stated.

Second, health plans should cover prescription drugs or services that are removed from the plan’s formulary or newly subject to coverage restrictions after the beneficiary enrollment period ends. Plans should cover the services for the benefit year to ensure patient access to necessary treatments or medications.

Third, all prior authorization approvals should be effective for the whole treatment period.

“Many conditions require ongoing treatment plans that benefit from strict adherence,” wrote the coalition. “Recurring prior authorizations requirements can lead to gaps in care delivery and threaten a patient’s health.”

Fourth, utilization management programs should acknowledge if a prior step therapy under a different plan did not work. Plans should not require patients to undergo similar step therapy protocols.

Retrying step therapies is a common problem for patients who purchase coverage through individual marketplaces because they typically change plans every year. However, forcing patients to repeat similar ineffective step therapies can lead to worse outcomes and unnecessary healthcare utilization.

Healthcare transparency and fairness should be upheld in utilization management programs

Prior authorization and other utilization management strategies should increase healthcare transparency to ensure that providers and patients understand how care will be impacted by program requirements.

The coalition stated:

“Utilization review entities should publicly disclose, in a searchable electronic format, patient-specific utilization management requirements, including prior authorization, step therapy, and formulary restrictions with patient cost-sharing information, applied to individual drugs and medical services. Such information should be accurate and current and include an effective date in order to be relied upon by providers and patients, including prospective patients engaged in the enrollment process. Additionally, utilization review entities should clearly communicate to prescribing/ordering providers what supporting documentation is needed to complete every prior authorization and step therapy override request.”

As part of increasing healthcare transparency and prior authorization data access, the coalition advised utilization review organizations and vendors to put updated formulary data and utilization management requirements in EHR systems.

In addition, utilization review organizations should publish prior authorization approval and denial rates on their website. The information should include prior authorization rates by provider type, medication, procedure, indication, and reason for denial.  The data should also include total annual prior authorization requests, approvals, and denials as well as how many denials were overturned after an appeal.

Understanding prior authorization denials is key to helping providers make appropriate healthcare decisions. Therefore, utilization review organizations should also give providers detailed denial explanations, such as an indication or missing data. Providers should also know the clinical reasons for a denial as well as any alternative treatments covered by the plan and appeal processes.

Utilization management programs should increase timely access and administrative efficiency

To reduce administrative burdens related to utilization management programs, payers, plans, and other stakeholders should standardize prior authorization requirements across the industry.

As part of the push to standardization requirements, the coalition called for more electronic prior authorization adoption. Although, payer web-based portals, phone calls, and non-standard electronic forms should not be count as electronic transmissions.

“In order to ensure that prior authorization is conducted efficiently for all stakeholders, utilization review entities need to complete all steps of utilization management processes through NCPDP SCRIPT ePA transactions for pharmacy benefits and the ASC X12N 278 Health Care Service Review Request for Review and Response transactions for medical services benefits,” stated the groups.

Including eligibility and other policy coverage decisions as part of the prior authorization process would also make utilization management processes more efficient. The segmented process increases administrative burdens and disrupts patient care access, especially if coverage or payment is denied for other reasons despite a prior authorization approval.

Payers and other review organizations also should not be allowed to restrict or revoke approved treatments or medications within 45 business days from when the prior authorization approval was received.

In addition, utilization management programs can ensure timely care access and less administrative burden by providing decisions on expedited appeals within 24 hours. All other prior authorization denial appeals should be communicated within 10 calendar days.

The coalition also developed principles regarding more pressing healthcare situations. For example, the groups agreed that prior authorizations should never be required for emergency care and prior authorizations in urgent care cases should be communicated within 24 hours of receiving the completed request.

Utilization management programs should offer exemptions to reduce administrative burdens

Rather than implement broad utilization management programs, the coalition suggested that health plans target providers with high rates of inappropriate resource use and offer providers that demonstrate appropriate use exemptions.

Health plans could reduce administrative burdens and healthcare costs for both payers and providers by implementing a prior authorization alternative for providers who adhere to appropriate use criteria. For example, plans could relax requirements for caregivers in “gold card” or “preferred provider” programs as well as those who attest to appropriate use.

Providers participating in risk-based alternative payment models should also be excluded from or offered a prior authorization alternative.

“By sharing in the financial risk of resource allocation, providers engaged in new payment models are already incented to contain unnecessary costs, thus rendering prior authorization unnecessary,” wrote the coalition.

The group of healthcare organizations intends for the 21 prior authorization reform principles to improve patient-centered care without adding financial or administrative burdens to practices.

“Most importantly, despite the fact that the vast majority of prior authorization requests are ultimately approved, jumping through these administrative hoops can lead directly to delay or disruption in the delivery of care to the patient,” Halee Fischer-Wright, MD, MMM, FAAP, CMPE, MGMA President and CEO, said in an emailed statement. “Working together, the coalition has developed a landmark set of principles and I anticipate that this effort will translate directly into a reduction in the waste associated with prior authorization requirements.”