The Burdens of Prior Authorization

March 15, 2024

Denying Your Health Care Is Big Business in America
On YouTube
NYT Opinion Video
March 14, 2024
Video by Alexander Stockton

Doctors are often required to get insurance permission before providing medical care. This process is called prior authorization and it can be used by profit-seeking insurance companies to create intentional barriers between patients and the health care they need.

At best, it’s just a minor bureaucratic headache. At worst, people have died.

Prior authorization has been around for decades, but doctors say its use has increased in recent years and now rank it as one of the top issues in health care.

To produce the Opinion Video, we spoke to more than 50 doctors and patients. They shared horror stories …

Prior authorization has come under intense scrutiny in Congress in the past few years, but bipartisan proposals have repeatedly stalled. Under public pressure, some insurance companies — like United Healthcare and Cigna — have said they would reduce the use of prior authorization. And in January, the Biden administration finalized a plan to put limited guardrails around this practice. But doctors say that these efforts only scratch the surface and should go further.

This issue is ultimately about the role of insurance companies in American health care: Should they have more power than your doctor to decide what’s medically best for you?

From the video:

…
An absurd process has infiltrated American Healthcare. It’s called prior authorization. Here’s how it works. Before your doctor provides a treatment, your insurance requires them to prove it’s necessary. This is often a time-consuming process that can cause dangerous delays.  …

When your prior authorization is denied, you have three options. You could just pay out of pocket, but healthcare is so ridiculously expensive that that’s not realistic. You can give up. That’s what happens up to 80% of the time: a win for your insurance company. Or your doctor can go to bat for you.

When our prior authorizations get denied we have to do what’s called a peer-to-peer. A peer-to-peer is supposed to a phone call where you call somebody who is your peer to justify the treatment that you want to deliver. I’m a pediatrician and sometimes I’ll end up talking to a neurologist … people who couldn’t pronounce the names of the drugs I was trying to prescribe. Often times it’s not even a physician. Now imagine you have to do that five to 10 times a day. What’s even more ridiculous about this whole process is that after we go through all of this if you’re really a determined provider you’ll probably get your drug or your procedure authorized.

… By one estimate the US spends about $35 billion a year [HJM: $100 per person] on the administrative costs of prior authorization. These resources could be devoted to Patient Care. …

In many countries these tough ethical decisions about what is covered are made by governments, not for-profit insurance companies. The government should abolish prior authorization or at the very least reform it. Sen. Curt VanderWall: My goal with Senate Bill 247 is to reform the prior authorization process. House Bill 3459 creates a streamlined prior authorization process known as “gold carding”. … Doctors who have successfully obtained prior authorizations … are exempt from needing to obtain them again. All states and the federal government should pass laws like these. Your insurance should not be a barrier between you and the healthcare you need.

 

Comment by: Jim Kahn

In my opinion, thoughtful and well-circumscribed prior authorization has an appropriate role in medicine. It can work with other methods (e.g., training and peer review) to advance effective and quality care, weeding out clinically unnecessary services. As a health economist, I even understand its careful use to help wisely and equitably spend health resources.

Yet that’s not what’s happening in the US currently, according to various reports, both anecdotal and quantitative. The NY Times video effectively captures the burdens that prior authorization increasingly imposes on doctors (who spend far too much time pleading with insurers) and patients (whose care may be delayed and denied).

What’s the difference between ideal and problematic use of prior authorization? To paraphrase a famous political slogan, “It’s the profits, stupid.” When the financial well-being of insurance company executives and shareholders is conflated with fairness and efficiency in medicine, the balance will surely tilt away from optimization of health care for patients.

As the video says, other countries get it right. We can too, with single payer.