Momentum builds to fix prior authorization

Dr. Paul Harari, a radiation oncologist, likened it to torture. The interminable back and forth. The outdated fax machines. Wasting time on the phone to convince a health plan’s medical director that a cancer treatment the plan denied is the right way to go when he could be off taking care of his patients.

Harari’s frustration with prior authorization is typical among doctors and other clinicians, who say they are increasingly burdened with onerous requirements imposed by health insurers and pharmacy benefit managers to seek advance approval for procedures and medications. They claim the requirements harm patients in the name of boosting insurers’ profits.

“Cancer patients are super anxious about delays and that’s what we continue to see more and more of with prior authorization: delays in getting recommended treatment underway,” said Harari, chairman of the human oncology department at the University of Wisconsin School of Medicine and Public Health in Madison.

Health insurers and other payers insist prior authorization is a tool used sparingly to ensure patients are getting the right treatment in the right place; reducing costs is secondary. They contend it’s not a means to deny claims, as HHS’ Office of Inspector General has suggested. But they do admit the cumbersome process is a pain, and some insurers are at the center of collaborative industry initiatives to modernize the process.

Momentum is finally building behind those efforts. Health plans, providers, electronic health record vendors and federal agencies are working together to reduce the prior authorization burden by automating it. Other organizations are experimenting with reducing the sheer volume of authorization requirements foisted on doctors. Congress, meanwhile, is eyeing a legislative fix that aims to do a little of both.

But prior authorization is just one element of a bigger problem—the “shiny object” in the middle of a broader movement to reduce administrative burden and costs, said Alix Goss, co-chair of the Standards Subcommittee of the National Committee on Vital and Health Statistics, one of the organizations involved in the efforts.

Fixing it could make doctor and insurer interactions more efficient beyond just prior authorization and lead to advances that have so far eluded the U.S. healthcare system, including price and quality transparency and value-based payment, experts say.

“This needs to be not just about how we fix the widget of prior authorization,” Goss said, but about “how we converge the clinical and administrative and financial data and related standards to better meet the needs of our healthcare system and its emerging business models.”

While other interactions between health insurers and clinicians, such as verifying a patient’s benefits, are often automatic, prior authorization, particularly for medical services, is a largely manual process relying on faxes and phone calls and requires toggling back and forth between the EHR and a health plan’s website.

Which medical services require prior authorization and what information is needed for approval differs for the dozens of insurers that physician offices deal with and can change with little warning. Most doctors report waiting between one and five days to receive a health plan’s decision, according to a 2018 American Medical Association survey. They risk forfeiting payment if they go ahead with a procedure before it’s approved.

Because of this, prior authorization often tops lists of medical professionals’ greatest frustrations. The CMS is analyzing 2,600 comments about prior authorization it fielded from a recent request for information as part of its Patients over Paperwork initiative, but it hasn’t yet announced how it will tackle the problem. An agency spokesman said the CMS is looking to understand challenges and opportunities within the prior authorization process. So far, the CMS has spotted opportunities: it established Medicare prior authorization for durable medical equipment in 2016 and this year proposed implementing it for certain outpatient procedures.

“We don’t have some unrealistic expectation that prior authorization is going to disappear or go away. We want it to be right-sized,” said Dr. Jack Resneck, immediate past chair at the AMA, which is one of the physician advocacy organizations leading the charge for reform.

The bulk of the work being done to fix prior authorization focuses on automation. Shifting to a fully electronic process would save the U.S. healthcare system at least $417 million annually, according to the Council for Affordable Quality Healthcare, or CAQH, which tracks adoption of electronic prior authorization.

But experts say barriers that exist between healthcare’s EHR and administrative systems complicate that goal and others, like moving toward a healthcare system that pays for value.

“We have totally separated clinical information from the financial information, and it’s now very hard to bring them back together,” explained Dr. Donald Rucker, national coordinator for health information technology. “And that, I would argue and have argued, is really one of the root problems with paying for value and purchasing for value.”

Clinicians use an EHR for clinical work and a separate administrative system to bill an insurer. Even though prior authorization is an intrinsically clinical task, it’s governed by an administrative standard mandated by HIPAA that leaves no room for the medical notes, test results and patient history found in the EHR and no way for the insurer and doctor to exchange that data efficiently.

CAQH data shows just 12% of 182 million authorizations for medical services were conducted using the electronic standard in 2018; that’s evidence that the standard, known as X12 278, is inadequate, experts say. Instead of an electronic process, doctors resort to sending faxes and PDFs or visiting proprietary insurer web portals that only add to the burden.

Some stakeholders argue that adopting another standard for claims attachments would improve the process by providing more structure around how doctors send extra clinical information; others, including the Office of the National Coordinator for Health Information Technology, feel it’s a stopgap that doesn’t take advantage of modern technology.

“What’s maddening to everybody is we now have the data sitting in the EHR in a way that could be computable if people wanted, if they had a mechanism to get at it, but the X12 transaction set doesn’t provide any mechanism to do that today,” Rucker said.

The adoption of electronic prior authorization for prescriptions that fall under the pharmacy benefit, meanwhile, is higher in part because there’s another, more mature standard that governs that process and which many stakeholders have decided meets the needs of the industry.

There’s no shortage of organizations working to merge those clinical and administrative systems and automate prior authorization, but it’s early. The ONC and the National Committee on Vital and Health Statistics, the federal advisory committee advising the CMS on HIPAA-named transactions, are working closely to that end. The NCVHS urged Congress to revise HIPAA to allow more flexibility for the industry to innovate. And the ONC last year released a draft strategy for reducing regulatory and administration burden in which it recommended supporting automation and new standards, including Health Level Seven’s FHIR.

The Da Vinci Project, an industry collaboration that shows promise, is experimenting with FHIR to reduce provider burden in a number of ways, including by improving prior authorization workflows. FHIR, which stands for Fast Healthcare Interoperability Resources, allows data to flow between members of the healthcare industry in a seamless way, said Jocelyn Keegan, manager of the project, whose members include some of the largest insurers, EHR vendors and the CMS.

Project participants are building implementation guides allowing for a common way for a physician to learn while ordering a medical service if authorization is required, what rules exist and what information is needed. And then, if a prior authorization is required, they enable the provider to “extract the right information from the EHR and send it to the payer behind the scenes in a fully automated way and get an answer back in a fully automated way,” Keegan said.

There is a stumbling block, though, with X12 278 being the law of the land. Some think using FHIR for electronic prior authorization would require a law change; Keegan, however, said Da Vinci supports existing regulations and is working with X12 to map the FHIR tools to the existing standard.

Another collaboration between EHR company Epic Systems Corp. and insurer Humana, both of which participate in Da Vinci, is testing how Epic could act as an intermediary allowing the insurer to exchange data automatically with any provider using the EHR. Instead of every provider having to implement electronic standards on its own or figure out how to link up with Humana directly, Epic will “push the automation and the electronic sharing of information over a standard interoperability network,” explained Ryan Bohochik, Epic’s director of value-based care. “We do hear from Humana and other insurers that if they can automatically get access to supporting clinical information, in many cases they may be able to reduce or fully eliminate the need for prior authorizations in the first place,” he said.

America’s Health Insurance Plans, the insurance industry’s trade association, is coordinating its own demonstration project to test two technology companies’ automation tools. Kate Berry, AHIP’s senior vice president of clinical affairs, declined to say which companies it is working with but said they “have solutions that are based on industry standards and therefore have potential to be widely scalable, so we expect at the end of the project … that this will contribute to understanding how to implement these solutions successfully and how to encourage more widespread adoption.”

AHIP is also fielding a survey among its members to get a better sense of how often prior authorization is used and for what services.

“We can’t wave a magic wand and change practice,” Berry said. “We have multiple efforts underway to improve the process. I think it’s a two-way street. Plans are very much focused on ensuring that patients get the right care from the right clinician at the right place at the right time, and doctors want to deliver that too. But I do think there’s evidence to show there is wide variation in (physician) practice.”

Some provider organizations worry there’s too much focus automation. In late September, the AMA and more than 100 other medical societies urged the CMS to take a comprehensive approach to tackling the prior authorization burden.

Medical and insurer associations signed a consensus statement in January 2018 that offered ideas for reducing the overall volume of authorization requirements through exempting physician offices that can prove they adhere to evidence-based guidelines or are involved in risk-sharing payment models, for example. Another idea: Don’t require physicians to jump through hoops for services that are almost always authorized in the end.

“If a physician is in a value-based contract or an ACO, or they’re being measured on cost and quality by a health plan, and if they have high quality and low costs, then health plans should exempt those physicians,” said Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association.

But there’s less going on in those areas. Only 8% of physicians report contracting with health plans that offer programs that exempt providers, an AMA survey shows. What’s more, a CAQH survey found that total prior authorization transactions in 2018 actually increased 14% over the year before and 27% over 2016.

There are rare examples of progress. Blue Cross and Blue Shield of Minnesota in August struck a deal with Minnesota Oncology, a 12-clinic medical group with 80 providers, that eliminates prior authorization for services that follow the National Comprehensive Cancer Network’s guidelines.

Karen Amezcua, the insurer’s senior director of provider contracting, said the company decided to give Minnesota Oncology a so-called “gold card” exempting it from prior authorization because it already had decision-support tools embedded in its organization to ensure physicians were following guidelines. The Blues plan will still audit the practice to provide some oversight.

Mike Funk, a Humana vice president in the office of the chief medical officer, said the insurer is rolling out a “gold card” status for providers based on their efficiency and effectiveness. It’s also exploring condensing prior authorizations for acute episodes of care. Instead of requiring approval for every X-ray or drug needed to treat a patient’s cancer, for example, the insurer may require just one authorization for the entire course of treatment.

Still, some organizations are resisting the idea of applying prior authorization selectively. Dr. Lynne Nowak, who leads the provider services group at pharmacy benefit manager Express Scripts, which is now owned by insurer Cigna Corp., said physicians who receive “gold cards” tend to prescribe more liberally.

Heeding calls from the provider community, lawmakers are also taking a stab at curtailing the prior authorization burden. Some states have already passed laws to bring consistency to the clinical information that health plans request from providers or put maximum limits on the time a health plan can take to decide on an approval. But disparities in the state laws can complicate prior authorization, some sources said. Providers want national rules.

At the federal level, a bipartisan bill introduced in June, the Improving Seniors’ Timely Access to Care Act of 2019, would require Medicare Advantage plans to use an electronic process and prohibit prior authorization for certain services.

It also aims to create more transparency around prior authorization by requiring health plans to publicly post which services require it, how often those services are denied and approved, and how long it takes to make a decision.

More than 370 healthcare groups in September urged Congress to pass the bill. The House Small Business Committee that same month held a hearing on the topic, but either the Ways and Means or Energy and Commerce committees would need to take it up. For now, prior authorization has taken a backseat to surprise billing at the federal level.

“These are complex issues,” Goss of the NCVHS said of fixing prior authorization. “There are multifaceted stakeholder impacts. The standards bodies and the industry groups all have a very critical role to play in this, as do federal advisory committees, the regulators and legislators.”