Prior Authorization Reform: A Path to Simplified Healthcare

Prior authorization reform can make a significant difference in the lives of patients and healthcare providers.

Research shows that up to 70% of medical decisions are influenced by prior authorization requirements.

In the US, the average prior authorization request takes around 20 days to be approved, which can delay necessary care for patients.

This delay can lead to worsening health outcomes, increased hospitalization rates, and even death in some cases.

The regulatory framework for prior authorization is complex and varies across different levels of government. Federal laws set broad goals, but agencies like CMS define the specifics through regulations.

CMS is developing new rules on prior authorization, which would cover not only Medicare Advantage plans but also many Medicaid and commercial health plans. These proposals aim to create a more streamlined process.

In December, CMS released its proposals, which include a 24-hour turnaround time for urgent requests. Over 60 senators and more than 230 members of the House signed bipartisan letters urging CMS to proceed with its efforts.

State laws and regulations also play a significant role in shaping the prior authorization landscape. At least 57 bills have been introduced in 22 states to reform prior authorization requirements.

Here are some common provisions found in state prior authorization reform bills:

Some states have also implemented "Gold Card" legislation, which exempts physicians with high prior authorization approval rates from prior authorization requirements.

The prior authorization process can be a long and frustrating experience for patients. It can take up to 30 days to get approval, leaving patients without access to necessary treatments.

In some cases, patients may need to appeal a denied request, which can add an additional 30 days to the process. This can lead to delayed treatment and worsened health outcomes.

The current prior authorization process often requires patients to submit multiple requests and forms, with some patients reporting up to 10 different requests for the same treatment. This can be overwhelming and time-consuming.

A recent study found that 1 in 5 patients reported abandoning a treatment due to prior authorization delays. This can have serious consequences for patients' health and well-being.

Reform Initiatives are underway to improve the prior authorization process. In January 2024, the Centers for Medicare & Medicaid Services (CMS) Rule CMS-0057-F was passed, requiring impacted healthcare plans to transition to more expedient prior authorization reviews within 72 hours.

The CMS Rule will not be fully mandated until January 1, 2027, but it's a significant step towards streamlining the prior authorization process. This rule change will also make information about prior authorization requirements more transparent, excluding drugs.

Several bills have been introduced in Congress to address prior authorization issues. The GOLD CARD Act of 2023 (HR 4968) aims to exempt qualified physicians with high approval rates from some prior authorization requirements. This bill shows promise in reducing unnecessary delays in care.

The Reducing Medically Unnecessary Delays in Care Act (HR 5213) requires clinical criteria for covered services to be developed in collaboration with a qualifying physician. This approach could lead to more accurate and efficient prior authorization decisions.

In North Carolina, HB 649 includes several stipulations to reshape the prior authorization process. This bill is part of a larger effort to improve prior authorization for all stakeholders.

In the United States, there are ongoing legislative initiatives aimed at improving the prior authorization process for healthcare services. The Centers for Medicare & Medicaid Services (CMS) Rule CMS-0057-F, passed in January 2024, will require impacted healthcare plans to transition to more expedient prior authorization reviews within 72 hours.

CMS-0057-F also mandates the electronic streamlining of the prior authorization process and more transparent information about prior authorization requirements. Compliance with this requirement will not be fully mandated until January 1, 2027.

Several bills have been proposed in Congress to address prior authorization issues. HR 4968, the GOLD CARD Act of 2023, would exempt qualified physicians with a 90% approval rate from some prior authorization requirements in Medicare Advantage plans.

HR 5213, the Reducing Medically Unnecessary Delays in Care Act, would require clinical criteria for Medicare Advantage plan coverage to be developed in collaboration with a qualifying physician. This would help ensure that coverage decisions are based on medical expertise.

Other initiatives aim to improve transparency and accountability in the prior authorization process. For example, North Carolina's HB 649 includes provisions to reshape the process of prior authorization in the state.

A key aspect of these initiatives is the requirement for payors to establish exemption processes for step-therapy protocols. This would allow for more rapid approval of services under specified clinical conditions.

Here are some key details about the timeframes for prior authorization decisions:

These changes aim to improve the efficiency and transparency of the prior authorization process, ultimately benefiting patients and healthcare providers alike.

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Here are some key dates related to prior authorization requirements:

Prior authorization reform is on the horizon, with Congress focusing on making changes for Medicare Advantage plans. H.R. 4822 is a pending legislation that aims to make these changes.

Patients will soon have more visibility into the prior authorization process, thanks to the patient access API. This will allow them to appeal a prior authorization or claim denial through a simple process on their smartphones.

The patient access API is also creating opportunities for health apps to use patient information, but this raises concerns about security and privacy risks. Payers must educate their subscribers on steps to protect their privacy, but this limited education might not be enough to prevent users from authorizing the collection of commercially valuable patient information.

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Prior authorization will continue to be a crucial tool for health insurers, but with a focus on making the process more efficient and patient-friendly.

Congress is starting to focus on prior authorization reforms, with pending legislation that would make changes for Medicare Advantage plans.

The Medicare Advantage and Medicare Part D final regulation will require plan utilization management committees to issue an annual plan level health equity analysis of prior authorization policies.

Electronic processes will likely involve including API functionality in the provider's electronic health record to make it easier to use automated electronic processes.

This could lead to more streamlined processes, not just for business, but also for patients, who could appeal a prior authorization or claim denial to an independent entity through a simple process on their smartphones.

The patient access API has the potential to increase patient engagement in the process and contribute to a higher appeal rate, but it also raises questions about security and privacy risks.

There is increasing opportunity for monetization of patient information, which could lead to potential security and privacy risks to payers' systems.

At least 57 bills have been introduced in 22 states to reform prior authorization requirements for procedures, tests, treatment, and prescriptions as of 2024.

Many of these proposals contain provisions that aim to reduce administrative burdens, such as requiring insurers to respond to requests within a certain timeframe, like 24 hours for urgent requests or 48 hours for nonurgent requests.

Some states are also considering "Gold Card" legislation, which would exempt physicians with high prior authorization approval rates from prior authorization requirements on specified services.

These "Gold Card" programs have been enacted in Michigan, Louisiana, Texas, and West Virginia, but it's unclear what impact they're having on administrative burdens due to limitations on qualifying plans and services.

In 2024, at least 57 bills have been introduced in 22 states to reform prior authorization requirements for procedures, tests, treatment, and prescriptions. This is a significant effort to address the harm caused by prior authorization requirements.

Many proposals for prior authorization reform contain one or a combination of the following types of provisions. Here are some examples:

States like Michigan, Louisiana, Texas, and West Virginia have enacted "Gold Card" legislation that exempts physicians with specific prior authorization approval rates from prior authorization requirements on specified services.

Few patients engage the appeals process for prior authorization decisions, whether it's for Medicare Advantage plans or federal Marketplace plans. Many consumers are not aware they have a right to appeal, according to the KFF 2023 Consumer Survey.

A KFF analysis found that of the small number of denials that were appealed to the health plan, 82% were either partially or completely overturned. This suggests that increased use of appeals processes might uncover improper prior authorization claim denials.

The CMS final prior authorization rule will provide some new and ongoing information about prior authorization, but limited information about appeals of prior authorization denials. Plans must publicly report the percentage of prior authorization requests that were approved after appeal.

Currently, there are few sources for information about appeals in private coverage available. The Market Conduct Annual Statement (MCAS) can provide most states with uniform market-related commercial health plan information and data, including on prior authorization requests, approvals, denials, and external appeals requests.

Prescription drugs can be a challenge to navigate, but understanding the rules can help. Step therapy is a common limitation where a plan requires a patient to try another medication before covering the prescribed one.

Some states have laws requiring commercial plans to have an exceptions process for patients who need immediate access to a specific medication. However, these laws don't apply to self-insured employer-sponsored plans.

Time is often of the essence for medications like chemotherapy oral medications to treat cancer. Existing programs, such as Medicare Advantage plans, have expedited timeframes for reviewing claims, typically responding within 24 hours to an expedited prior authorization request for a Medicare Part B drug.

Here are some key differences in claim review timing:

These expedited timeframes may not apply to commercial insurance provided on the Marketplace unless state law requires it.

Large employer-sponsored plans are not regulated by CMS, which means the rules for prior authorization don't change for most Americans covered by these plans.

These plans are subject to ERISA requirements administered by the DOL, but the federal standards for internal claim review and appeal for prior authorization and other claim decisions haven't been updated since 2000.

Prior authorization requirements have been a focus of DOL oversight for mental health parity standards, with the agency finding violations in this area.

The failure to provide adequate notice of the reasons for a denial was recently the subject of a federal appeals court decision that's garnered attention.

Changing employer-sponsored plan benefit options or transitioning to Marketplace or Medicaid coverage can put a halt to preauthorized care, and ERISA doesn't address these types of transitions.

At least 57 bills have been introduced in 22 states to reform prior authorization requirements for procedures, tests, treatment, and prescriptions.

Some states have considered "Gold Card" legislation that would exempt physicians with specific prior authorization approval rates from prior authorization requirements on specified services. Michigan, Louisiana, Texas, and West Virginia have enacted such laws.

Many proposals for prior authorization reform contain provisions on response time to requests, such as 24 hours for urgent requests and 48 hours for non-urgent requests.

Requirements that prior authorization requirements must be evidence-based, such as being based on peer-reviewed clinical data, are also being considered.

Physicians who participate in gold card programs have reported that participation can be cumbersome.

A KFF analysis of Medicare Advantage prior authorization denials found that 82% of denials that were appealed to the health plan were either partially or completely overturned.

Plans must publicly report the percentage of prior authorization requests that were approved after appeal, but do not provide information about the specific service involved in the appeal, the reason for the initial denial, or the rate of appeal to health plans.

Few sources are available for information about appeals in private coverage, but the Market Conduct Annual Statement (MCAS) can provide data on prior authorization requests, approvals, denials, and external appeals requests for adverse benefits determinations.