AMA wants legal consequences for prior authorization delays that hurt patients

The American Medical Association wants patients to be able to sue their health plans over prior authorization disputes.

The AMA’s House of Delegates voted earlier this week at a meeting in Chicago to approve Resolution 711, a measure that calls for the AMA to “advocate for increased legal accountability of insurers and other payers when delay or denial of prior authorization leads to patient harm.”

“Increased legal accountability” could include a ban on health plan contract provisions that require patients to resolve coverage disputes through arbitration or that keep patients from participating in class-action lawsuits, the AMA says.

The AMA House of Delegates also reviewed an AMA Council on Medical Service about the use of prior authorization in decisions about prescription drugs.

Health plans and pharmacy benefit managers should reduce coverage disputes by creating a convenient system that will show physicians who are writing prescriptions what drugs a patient’s plan will cover, the council says.

When plans deny coverage for drugs, the plans should provide prior authorization denial letters that include a detailed explanation of the reasons, the information needed to approve the treatment, and a list of covered alternative treatments, the AMA says.

Changes in prior authorization programs and related programs are needed because “prior authorization requirements are rapidly increasing each year,” the AMA says in the Resolution 711 preamble.

About 33% of the physicians who participated in a 2022 AMA survey reported that prior authorization requirements had caused hospitalizations or other serious problems for their patients, and 35% of the cancer doctors who participated in an American Society of Clinical Oncologists survey said prior authorization requirements had caused a patient’s death, according to the AMA.

The backdrop

A health plan prior authorization program requires patients to get advance approval before getting certain types of controversial, potentially risky or expensive care, such as scans that might expose a patient to radiation, surgery or expensive specialty drugs.

America’s Health Insurance Plans, a group for health insurers, has agreed on the need to improve prior authorization programs but has argued that well-run prior authorization programs can make care better and more avoidable.

Studies have shown, for example, that giving a patient with low-risk lower back pain a CT scan can lead to $19,900 in extra costs without improving outcomes, according to an AHIP infographic on the topic.

Similarly, AHIP says, encouraging a patient to get knee surgery in an outpatient setting, rather than in a hospital, can save about $7,000 over a 90-day period without hurting the quality of care.

The Business Group on Health has recommended keeping prior authorization programs but improving them.

Health plans are using prior authorization more often, and “the onerous nature of manual processing, coupled with increasingly complex clinical criteria, has also added to the increased cost and resource burden associated with the process,” the group says in a discussion about the topic.

Related: Deny, deny, deny!’ That’s how a staff doctor at Cigna was told how to review claims

But “employers see PA as one of the most important mechanisms at their disposal to promote safety and prevent inappropriate utilization of a medication or a medical service,” the group says.

The group calls for improving the prior authorization process through the use of automation and efforts to limit how often high-performing physician practices have to go through prior authorization reviews.