Policy Playbook: Pre-Authorization Reform
- Dec 8th, 2021
- Jasmeen Kaur
Author: Jasmeen Kaur, DO (Emergency Medicine Resident, Hackensack University Medical Center) and Summer Chavez, DO, MPH, MPM (Attending Physician, The University of Texas Health Science Center at Houston) // Reviewed by: Alex Koyfman, MD (@EMHighAK)
What is the issue?
This month we cover Texas governor Greg Abbot’s passage of House Bill 3459. This state bill, which takes effect in September, prohibits payers from requiring pre-approval from certain providers. In short, this bill will allow physicians to earn exemption from prior authorization review requirements for certain care. A provider can earn this status if they have a 90% prior authorization approval rate. Health plans that require prior authorization can evaluate for exemption once every six months. This law only applies to health plans that fall under state jurisdiction but are not funded by state. This includes commercial HMO plans, preferred provider benefit plans and exclusive provider benefit plans. Medicaid plans are not subject to the law4.
Why does this matter?
Prior authorizations are not required in the emergency department as governed by EMTALA5. All too often, patients may often present to the emergency department if not able to receive drugs or treatment. Patients may report they cannot get into see a specialist, receive an advanced imaging study such as an MRI or continue an expensive medication. Because of the severity of their symptoms or clinical condition, this may prompt patients to seek care in the emergency department. In some instances, a prior authorization is obtained for psychiatric admissions to aid inpatient placement which can affect patients’ length of stay6.
Prior authorizations of health care services can become a burden and a barrier to physicians providing care. Payers maintain they require prior authorizations to ensure requested services are necessary and appropriate, but there may be a motivation for cost-control. A 2020 survey of Texas physicians, led by Texas Medical Association, revealed 85% physicians reported prior authorizations delayed patient care. 38% revealed it has led to an adverse event for their patient3. Prior authorization delays place a difficult administrative burden on healthcare providers. There has been a national drive for prior authorization reform. AMA released a consensus statement in 2018 outlining key areas associated with prior authorization1. Despite agreement by national organizations, there has not been a significant progress at the major national health plans.
There has been a state level movement on reform. Kentucky’s new law that took effect Jan 1, 2020, requires physicians must receive responses on pre-approval within 24 hours of urgent services and within 5 days for nonurgent services. Prescriptions for chronic condition maintenance drugs will be valid for one year and change in dosage will be covered. Maryland’s new prior authorization reform law requires at least 30 days’ notice to patients and their health care providers before implementing a prior authorization change. A previous prior authorization be honored when a beneficiary moves between health plans within the same carrier or where there is a dosage change2. We may begin to see more states pass legislation and action by payers to address preauthorization in the future.
What can I do about it?
- Become familiar with your states legislators and whether they support preauthorization reform.
- Engage with legislators to advocate for policies on preauthorization reform.
This post was a collaboration between emDocs and the EMRA Health Policy Committee.
- American Medical Association. 2021. Prior authorization reform initiatives. https://www.ama-assn.org/practice-management/sustainability/prior-authorization-reform-initiatives. Accessed 21 August 2021
- Robeznieks A. Prior authorization needs fixing. How it’s happening in the states. American Medical Association. https://www.ama-assn.org/practice-management/sustainability/prior-authorization-needs-fixing-how-it-s-happening-states. Published February 4, 2020. Accessed August 21, 2021.
- Streamlining prior authorization burdens. Texmed. https://www.texmed.org/Template.aspx?id=55602#_ftn1. Published February 5, 2021. Accessed August 21, 2021.
- Texas HB3459: 2021-2022: 87TH LEGISLATURE. LegiScan. https://legiscan.com/TX/text/HB3459/2021. Accessed August 21, 2021.
- Preauthorization in the ED – Medical Risks to Patients, Legal Risks for Physician. Relias Media – Continuing Medical Education Publishing, reliasmedia.com/articles/59735-preauthorization-in-the-ed-medical-risks-to-patients-legal-risks-for-physicia. Accessed September 21, 2021.
- 1 million hours of psychiatrist time wasted yearly on phone approvals for hospitalization. PNHP. Accessed September 21, 2021. https://pnhp.org/news/1-million-hours-of-psychiatrist-time-wasted-yearly-on-phone-approvals-for-hospitalization/. Accessed September 21, 2021.