April 24, 2023
By Nomi Health on August 24, 2023
Picture this: a physician, with a stack of paperwork, waiting for hours on end to get approval for a procedure or medication. Sound familiar? That's the traditional prior authorization process – a maze of bureaucracy that has been a roadblock for medical providers, payers, and patients alike since the 1960’s.
Prior authorization was once a process that health insurance companies used to make sure that hospital care was medically necessary and cost-effective before they would pay for it. (Fair enough.) But prior authorization is now so ubiquitous, it’s a major pain for both physicians and patients.
Over time, the process has grown increasingly complex, time-consuming, and frustrating. Physicians found themselves drowning in paperwork and jumping bureaucratic hurdles, while patients faced delays in receiving vital treatments. This turn of events gave birth to a call for reform, triggering a movement that seeks to revolutionize the way prior authorization functions.
Delayed care. Patients may have to wait weeks or even months for their prior authorization requests to be approved, which can delay or even prevent them from getting the care they need.
In a recent American Medical Association survey of 1001 doctors, 94% responded that a prior authorization requirement caused a delay in care for a patient. Worryingly, 1 in 3 physicians reported that it led to a serious adverse event: hospitalization, permanent impairment, or even death.
Denied care. If your prior authorization request is denied, you may have to pay for the care out of pocket, which can be a financial burden.
Paperwork nightmare. Physicians have to spend a lot of time filling out prior authorization paperwork and tracking the status of their requests, which takes away from time they could be spending with patients. In that same AMA survey, physician practices reported spending 14 hours a week to complete 45 authorizations per physician, per week, on average. And those 2 days of admin work are only increasing.
Conflict between physicians and insurers. Doctors may feel like their decisions about patient care are being second-guessed by insurance companies, which can lead to frustration and burnout.
The use of prior authorization is on the rise, and not just for high-cost or high-risk procedures. As healthcare costs soar, insurance companies are using prior authorization as an all-purpose hammer to beat them down further.
Because complexity in healthcare is exploding, with a multitude of treatment options available, insurance companies are falling behind in their effort to keep up with all of them.
An increasing number of patients suffer from chronic conditions, which often require more complex and expensive care, making them more likely to require prior authorization.
Medicare Advantage plans are a major driver of the rise of prior authorization. Offered by private insurance companies, Medicare Advantage plans have more restrictions on care than traditional Medicare, and often require prior authorization for certain services and medications.
Right now there’s a balance between traditional Medicare and Medicare Advantage, but it’s quickly shifting. By 2025, Medicare Advantage is expected to be the choice for 70% of seniors.
Since prior authorization has become so problematic, there is growing bipartisan momentum at the state and federal level to get it under control. In 2021, the Biden administration released a proposal to reform prior authorization, and several states seek to pass legislation to also limit use.
Disturbingly, a recent government report by the Department of Health and Human Services Office of Inspector General showed that Medicare Advantage plans wrongly delayed or denied patients access to medically necessary care, as well as denying payments to physicians who treated them.
Some features of prior authorization legislation include limiting its use for Medicare Advantage plans, especially after the Inspector General’s report findings, as well as making the process more transparent, and finally, providing support to providers who must navigate through the labyrinth of bureaucratic red tape.
While the major players continue to shape the prior authorization drama, check out your own alternatives. They do exist. According to a physician advocacy group report, the Covid-19 pandemic, this is the first time that more than half of physician practices in the US are owned by hospitals or corporate entities, such as private equity firms.
But there’s an even simpler option. Since 2019, Nomi Health has been using advanced technology to build an open network of providers who benefit from a simplified payments process – with currently zero prior authorization required for any procedure.
Less time wasted on administrative tasks. More time dedicated to providing quality care. Together.