Prior authorizations often denied, adding to provider burden

Over a quarter (27%) of prior authorizations are often or always denied by insurance companies, adding to the already high administrative burden associated with the popular utilization management strategy, the American Medical Association (AMA) reports.

The latest “AMA Prior Authorization Physician Survey” reiterates the challenges physicians have faced with prior authorizations, which payers use to ensure necessary treatments for patients. However, physicians generally agree that the tactic does not benefit them or their patients.

The survey of 1,000 practicing physicians (400 primary care and 600 specialists) shows that an overwhelming majority of respondents (94%) experience care delays as a result of prior authorizations when one is required by payers. About 78% of respondents also say that prior authorizations can at least sometimes lead to treatment abandonment.

For some patients, these outcomes have negative consequences. Almost a quarter (24%) of respondents report a serious adverse event. Those events include hospitalization (19%), a life-threatening event or required intervention to prevent permanent impairment or damage (13%), and disability, permanent bodily damage, congenital anomaly, birth defect or death (7%).

Additionally, physicians report a high level of administrative burden with prior authorizations. The survey shows that practices complete 43 prior authorizations per physician per week, on average. Staff spend about 12 hours a week completing them, and some of those staff work exclusively on prior authorizations.

Physicians also agree that the rate of denials has increased. Approximately 73% say that the number of prior authorizations denied has somewhat or significantly increased over the past five years. Meanwhile, only 3% say their prior authorization burden has decreased in some way and 21% said there was no change. The remaining minority has not noticed a change over the last five years.

While most physicians are seeing an increase in denials, many are not appealing the decisions. The survey shows that less than one in five physicians say they always appeal an adverse prior authorization decision. Top reasons for not appealing a decision include not believing an appeal will be successful based on past experiences (62%), patient care cannot wait for the payer to approve the prior authorization (48%) and physicians have insufficient practice staff resources or time (48%).

But even when physicians appeal denials, they don’t believe the process is airtight. Many physicians go through a peer-to-peer review in which a health plan representative who often has clinical experience reviews the denial to make another determination about the medical necessity of the treatment in question. However, only about 15% of physicians participating in these reviews said that the health plan’s peer often or always had the appropriate qualifications.

Still, more than half (56%) of respondents said that the frequency of peer-to-peer reviews has increased over the last five years.

The burden of prior authorizations is costing practices. Most physicians (87%) believe that prior authorizations lead to greater overall utilization, largely because of ineffective initial treatments (69%) and additional office visits (68%). Although, some physicians report immediate care needs or emergency department visits (42%), as well as hospitalizations (29%).

“The time is now for Congress to adopt reintroduced prior authorization reform legislation that prioritizes patients’ access to care, reduces administrative burdens on physicians, and preserves resources for high-quality care,” writes AMA President Bruce A. Scott, MD, in a viewpoint article accompanying the survey. “Because insurers will not change their ways despite their rhetoric, lawmakers have an important opportunity to rein in excessive prior authorization requirements and unnecessary administrative obstacles between Medicare Advantage patients and evidence-based treatments.”

AMA has advocated for prior authorization reform, including selective application of prior authorizations, program reviews and volume adjustments, and adoption of automation to improve efficiency. However, the trade association finds that payers have made little progress with its proposed reforms.