Prior authorization bottlenecks patient care, critics say

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.

Researchers found that the effect of state-level prior authorization reforms depends on their design, implementation and enforcement, and should be coupled with federal action to extend reforms to employer plans that fall outside state regulation.

Read more: Health plan prior authorization change bill returns to Senate

“We find that there is no single `silver bullet’ reform of prior authorization policies or practices that can ease provider burden and improve patient access without also increasing insurers’ costs,” the report said. “Many of the reforms discussed in this study, including greater transparency, maximum response times, standardization, peer review and clinical guideline standards, show potential, but their ultimate effect on patients’ experience and heath system costs will depend on how they are designed, implemented and enforced.

“And without federal action to reform prior authorization for plans regulated under ERISA, state efforts in the commercial insurance market will continue to have limited impact.”