Dr. Dipak Nandi: Does the Current State of Prior Authorization Call for a Change?
Across the country, physicians are firsthand experiencing dangerous, harmful, and sometimes even deadly consequences of prior authorization. The American Medical Association (AMA) conducted a survey last year of 1,000 physicians from a wide range of practice settings. It reveals the PA process has a devastating impact on patient health outcomes, physician burnout, and employee productivity.
Even a 2019 survey by the AMA has identified that 90% of physicians agree that PA is hindering patient care. It also revealed that 24% of the physicians said PA delays led to severe health conditions and 16% of them agreed it caused patient hospitalization.
Dr. Dipak Nandi, MD, Board Certified Physician, Neuropsychiatrist, and a graduate of All India Institute of Medical Sciences, New Delhi, India, has stated that “The harm is not anecdotal. The issue of authorization delays is strangling the healthcare delivery system. We must ensure a strategic and innovative approach to resolve the issue.”
The Current Situation Calls for a Change
Whether hospital or practice-based, healthcare providers continue to face significant administrative burdens due to growing prior authorization requirements. Broadly, the industry is dealing with an aging population that requires more care, the rise of High Deductible Healthcare Plans (HDHP) shifting additional costs to patients, and a consistent decline in reimbursement, partly due to the Protecting Access to Medicare Act of 2014 (PAMA).
The AMA survey results reveal that delays and disruptions in care have become a common and distressing aspect of the patient’s experience due to the widespread use of prior authorization programs by the health insurance industry. These programs negatively impact the delivery of essential medical treatments, jeopardize quality care, and harm patients.
Patient Harm: Nearly 24% of physicians reported that prior authorization had resulted in serious adverse events for patients, including hospitalization, permanent impairment, or death.
Bad Outcomes: Over 93% of physicians indicated that prior authorization negatively affects patient clinical outcomes.
Delayed Care: More than 94% of physicians stated that prior authorization delays access to necessary care.
Disrupted Care: Over 78% of physicians reported that patients abandon treatment due to authorization struggles with insurers.
Lost Workforce Productivity: More than 53% of physicians caring for employed patients reported that prior authorizations impeded job performance.
Physicians face high administrative burdens from complying with prior authorization requirements across major health plans, diverting time and effort away from patient care. These duties consume limited resources and contribute significantly to physician burnout.
Added Burden: Physicians complete an average of 43 prior authorizations weekly, with over 27% reporting frequent denials.
Diverted Time and Resources: Prior authorization tasks consume around 12 hours of physician and staff time per week, with over 35% of physicians employing staff solely for these tasks.
Burnout Factor: More than 95% of physicians reported that prior authorization increases burnout to some extent.
Beyond impacting patient care and adding to physicians’ administrative burdens, the AMA survey found that prior authorization also leads to significant waste and costs in the healthcare system.
Wasted Health Resources: Over 87% of physicians reported that prior authorization requirements result in higher overall healthcare resource utilization, leading to waste rather than savings. Physicians cited diverted resources to ineffective initial treatments (69%), additional office visits (68%), urgent or emergency care (42%), and hospitalizations (29%) due to prior authorization requirements.
Transparency and Accountability Needed
In early 2018, healthcare stakeholders began to take a more proactive approach in urging the Centers for Medicare and Medicaid Services (CMS) and commercial insurers to revamp the prior authorization process. These efforts have gained momentum, especially during the COVID-19 public health emergency. The American Medical Association (AMA), along with 16 other groups, formed a joint task force dedicated to creating reform principles to streamline the prior authorization process and reduce associated challenges.
AMA House delegates are aware of the prior authorization reformation. In the case of Prior Authorization, transparency, and accountability should be on the part of payers as per the experts. The AMA’s advocacy for the new policies is based on the need to guarantee that insurers give physicians and patients thorough explanations when they issue a denial and that insurers will be held more legally accountable when their prior authorization policies cause patients harm by obstructing medically necessary care.
The fact that payers keep this process opaque and overly complex is no accident. A majority of the physicians revealed in the survey said it is difficult to determine whether a service needs prior authorization or not.
Reform Measures Advanced
There is promising progress in addressing the issues with prior authorization. The AMA is collaborating with state medical associations across the country to implement prior authorization reforms using AMA model legislation and other resources.
At the federal level, the Centers for Medicare & Medicaid Services (CMS) issued a final rule earlier this year aimed at reducing patient care delays and the administrative burdens physicians have long faced. This rule adjusts the prior authorization process for medical services and procedures under Medicare Advantage and other government-regulated plans.
As part of these reforms, health plans must now provide electronic prior authorization technology that integrates directly with EHRs. This change will significantly ease the burden on physicians and is projected to save an estimated $15 billion in practice costs over the next decade, according to the U.S. Department of Health and Human Services.
End Thoughts
With the right strategies and policies in place, the healthcare industry can eliminate the challenges of PA. The good news is experts and healthcare leaders are working towards the transformation of the authorization process. A transparent process and innovative approach within the same can form a better future.
As Dr. Dipak Nandi, the renowned neuropsychiatrist has eloquently said, “Payers create barriers purportedly to protect resources, but these hurdles often lead to care delays or abandonment, ultimately increasing costs due to worsened health conditions requiring urgent or emergency treatment. Patients are left struggling while physicians, often armed only with fax machines, fight on their behalf.”
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