Insurers question New York Gov.'s suspension of prior authorization

New York Gov. Kathy Hochul signed an executive order last week to ease the anticipated staffing challenges for health facilities once the vaccine mandate’s deadline passed. One provision in the order has health plans up in arms.

What concerns insurers is the suspension of requirements for prior-authorization review for scheduled surgeries, hospital admissions, hospital outpatient services, home health services and inpatient/outpatient rehabilitation services following hospitalization. Concurrent and retrospective review of claims for inpatient and outpatient services also were suspended.

In the governor’s order, the reason for the suspension is to increase availability of healthcare staff who might otherwise have been engaged in submitting or processing those tasks.

Another provision also relieves providers of record-keeping requirements, such as assigning billing codes or maintaining records for billing purposes, to the same effect.

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Suspending the prior-authorization and medical review requirements for about a month could free up thousands of providers from desk duty responsibilities, said Kenneth Raske, president of the Greater New York Hospital Association, which represents more than 250 facilities. By association estimates, there are more than 3,000 professionals in downstate hospitals doing such tasks to satisfy paperwork requirements from health plans, he said.

In a memo GNYHA sent to members last week, Raske noted that the association had strongly advocated for the requirement suspensions.

“We’re committed to working with the government and administration to stop the spread, but we are concerned with the impact of these provisions on patient care,” said Eric Linzer, president of the New York Health Plan Association, which represents more than two dozen insurers.

The prior-authorization reviews are important for post–acute care planning, and care managers will find it hard to ensure continuity of service without them, Linzer said.

He questioned the need for the suspension in the first place. When the state’s COVID-19 vaccine mandate deadline hit Sept. 27, hospitals reported high rates of vaccination and said they were able to maintain their full spectrum of services, he said.

“If we’re not seeing the staffing issues that had been anticipated, why move forward with this?” he asked.

The insurer organization is seeking clarity from Hochul’s office on the implementation of the suspensions, Linzer said.

The executive order requires hospitals to certify to health plans that they are facing staffing challenges and thus require the suspensions.

“This temporary provision provides an option for facilities to dedicate more clinical staff for direct patient care if necessary to address a shortage,” said Hazel Crampton-Hays, spokeswoman for Hochul’s office. “Ensuring access to quality care is everyone’s primary concern.”

Bill Hammond, senior fellow for health policy at the Empire Center, an Albany think tank, wrote in a post that hospitals had sought similar restrictions in the past as a way of increasing revenue rather than freeing up staff. This year the hospital industry lobbied for a “pay and pursue” bill to require insurers to pay claims up front and dispute discrepancies afterward.

“The executive order gives them a partial, temporary victory on the same front,” Hammond said.