The use of prior authorization by health insurers appears to be on the rise. Although insurers argue that this practice is a critical tool to control costs and reduce inappropriate service utilization, providers and patients raise concerns that it can inhibit patient care and increase administrative burdens.
"While insurers traditionally have used prior authorization to manage the most expensive therapies, in recent years stakeholders report an increase in the number and scope of medical services subject to prior authorization requirements," according to a report from the Georgetown University Center on Health Insurance Reforms. "Prior authorization appears to be most commonly applied to durable medical equipment, high-cost drugs and mental health or substance use disorder services."
Researchers at the center analyzed prior authorization policies for the commercial market in four states – Arkansas, Illinois, Texas and Washington. Several reforms show potential, including:
- Requiring greater transparency of services subject to prior authorization, clinical review standards and the reasons for denying prior authorization requests;
- Setting maximum time periods for insurers to respond to prior authorization requests;
- Standardizing the form and method for exchanging prior authorization requests, decisions and related information; and
- Establishing expectations for peer-to-peer review of prior authorization requests and the use of accepted and transparent clinical review standards.
In early 2024, state lawmakers introduced more than 90 bills to reform prior authorization. Many were prompted by complaints from physicians and patients that insurers' prior authorization practices are inappropriately hindering patient access to needed care and placing undue administrative burdens on providers. At the same time, insurers argue that prior authorization is a critical took fool for managing excessive or wasteful use of health care services and keeping costs (and ultimately, premiums) in check.
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