AMA: Payers Did Not Fix Prior Authorization, Cut Provider Burden

June 23, 2020 - Payers have not lived up to their promise to improve the prior authorization process, the American Medical Association (AMA) charged in a recent statement.

In 2018, groups including America’s Health Insurance Plans (AHIP), Blue Cross Blue Shield Association (BCBSA), AMA, and others signed a statement committing to reform the prior authorization process, but AMA said that this commitment was not honored.

“Almost two and a half years after our consensus statement, the sad fact is little progress has been made toward the reform goals,” Susan Bailey, MD, president of AMA, said in the statement.

AMA released 2019 physician survey data which found that prior authorizations were still negatively impacting patients and providers alike. The web-based survey sampled 1,000 providers—40 percent of whom were primary care providers—who usually complete prior authorizations in a typical week.

The report found that, on average, 64 percent of providers have to wait a full business day to receive prior authorization feedback from payers. A little under a third (29 percent) found that they had to wait at least three business days.

READ MORE: Pros and Cons of Prior Authorization for Value-Based Contracting

This delay in hearing from payers could cause setbacks in patient treatment. For 91 percent of providers, prior authorizations delayed patient care, with 48 percent saying that prior authorizations often or always have this effect.

Most providers (90 percent) found that prior authorizations have a somewhat or significant negative impact. This number is only one percent lower than the 91 percent of providers who said that prior authorizations have a negative impact on patients in AMA’s 2018 survey.

Sometimes, the effects of prior authorizations are serious. Nearly a quarter of the provider survey participants (24 percent) said that a prior authorization-related delay has led to an adverse health event for a patient and 16 percent said that the delay led to hospitalization.

Nearly three-quarters of the providers said that prior authorizations led to patients sometimes, often, or always foregoing treatment altogether.

The impact for providers was also grim. Nearly nine in ten providers (86 percent) found that the prior authorization burden was high or extremely high—averaging nearly 14.4 hours per week and 33 prior authorizations per provider per week.

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And when it came to the promised change in prior authorizations, providers had seen change but it was not for the better. For most providers (86 percent), the prior authorization burden increased either somewhat or significantly over the course of the last five years.

This survey stands in stark contrast to an AHIP report released the same month. That report found that payers believe prior authorizations have a largely positive impact.  Most payers found prior authorizations to be an evidence-based system for ensuring quality of care, affordability, and safety.

The payer organization does not ignore the pitfalls of this system, however.

“Prior authorization is an important tool that helps ensure that patients receive care that is safe, effective, and necessary,” David Allen, spokesperson for AHIP, told HealthPayerIntelligence in response to the AMA’s comments. “However, we know that prior authorization can be improved. We’re committed to reducing unnecessary burden, increasing patient satisfaction, and improving quality and outcomes.”

In the June report, AHIP emphasized implementing automation to diminish the prior authorization burden on providers and leveraging risk-based contracts to align payer-provider incentives.

READ MORE: Payers, Providers Spar Over Proposed Prior Authorization Regulation

Most of the payer participants (58 percent) responded that the major barrier to prior authorization automation was that providers failed to use EHRs that were enabled for electronic prior authorization. The other most common barriers were costs to payers, costs to providers, and lack of a variety of options on the prior authorization automation market.

Allen also pointed to the Fast PATH Initiative as a step toward improving prior authorization. The payer organization launched this program in January 2020 with the goal of streamlining prior authorizations for prescription medication using a multi-payer portal software and streamlining prior authorizations for medical and surgical procedures.

In contrast, AMA’s experts found that the best solution for the stalled prior authorization improvements would be federal action.

“The health insurance industry’s failure to achieve agreed-upon improvements illustrates a clear need for legislation like The Improving Seniors’ Timely Access to Care Act, H.R. 3107, to rein in prior authorization practices that adversely affect patient health,” said Bailey.

HR 3107 is bipartisan legislation that focuses on streamlining prior authorizations for Medicare Advantage members. Representative Suzan DelBene (D WA) introduced the bill on June 5, 2019. According to the AMA, the bill continued to garner strong support in the House of Representatives since then with 219 bipartisan co-sponsors from the House of Representatives.

However, the bill has been a source of contention for providers and payers, culminating in AHIP and BCBSA submitting a joint statement to the Committee on Small Business in defense of prior authorizations.