Prior Authorization in Healthcare - How Big Is It?

A 2021 Article in the Journal of the American Medical Association by Dr. Aaron Schwartz from the University of Pennsylvania Studies the Scope of Prior Authorization in American Healthcare.
The Study Took the 1,151 Outpatient Medications, Tests and Procedures for Which CVS Aetna Requires Prior Authorization and Applied them to a Sample of Traditional Medicare Part B Claims from 2017 and Asked the Question, "Since Traditional Medicare DOES NOT Have Prior Authorization Requirements, WHAT IF the CVS Aetna Prior Authorization Requirements Were Hypothetically Applied?"
What Would Be the Implications?
The Results:
--41% of Medicare Part B Patients Would Be Affected
--Those Patients Would Have a Median of 5 Prior Authorizations Per Year
--25% of All Medicare Part B Costs Would be Subject to Prior Authorization (Approx. 14 Million Services Per Year)
--Outpatient Medication Infusions and Injections Were the Largest Category Requiring Prior Authorization... 35% of Total Prior Authorizations and 57% of Spending
--The Top Drugs Requiring Prior Authorization Were EPO, Eylea and Rituxan
--56% of Doctors Encountered a Prior Authorization.
--The Doctor Specialties Impacted the Most by Prior Authorization Were Radiation Oncology (97% of Doctors) and Cardiology (93%) and the Least Impacted Were Pathology and Psychiatry.
Interestingly, the Study Was Funded in Part by CVS/Aetna Perhaps as a Way to Highlight their 'Cost Containment' Efforts at a Time When Their PBM is Under Scrutiny for RAISING Healthcare Costs.
Sources: jamanetwork.com/journals/jama...
www.kff.org/medicare/issue-br...
rappaportfoundation.org/board/
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[@pamjoyce9644]

thank you for the informative video. Prior authorization has become a larger and larger burden for physician offices, requiring multiple resources in the office. Wait time on the phone averages 1-3 hours. It's important to keep in mind that the point of previous authorization is to deny the requested services and thus keeping the monies in the insurance companies rather than for health care.

[@ahealthcarez]

Thank you for watching and for your comment. Great intel on the wait times. 😳

[@jungseo3468]

As a pharmacy student, I thoroughly enjoy all of your videos. Many of your topics are rarely discussed in class or on rotations.

[@ahealthcarez]

Thanks so much for watching and for your comment. Tell your friends. 😉

[@smehrabi]

Another great video, thank you Dr. Bricker. The reason they chose Medicare Part B rather than their own insurance data or Medicare advantage D as stated in the paper was because Aetna claim data only had services that their PA request was accepted (already met the coverage criteria) While Medicare Part B because it doesn’t have PA it includes all even those that might have had their request denied.

[@ahealthcarez]

Thank you for watching and sharing your thoughts.

[@youriekim]

This was so helpful! You have a very unique expertise to explain things that are always helpful to ppl in healthcare, health finance, and health tech. :) Thank you

[@ahealthcarez]

Thank you for watching and for your feedback.

[@lisawalls2783]

To your point, the key factor missing here are the denial rates... So what if they subject 25% of the claims to a PA, if they approve them all. No cost containment, only delays in medically necessary treatments and another layer of complexity/cost inhibiting access to affordable healthcare.

[@ahealthcarez]

True. Perhaps a better way to assess Prior Authorizations would be for the Govt to require PA denial data reporting as necessary for Medicare Advantage participation. However, politicians probably don’t want to know. 🤷‍♂️

[@achievecarerpm-ccm3517]

Having spent 20 years as an RN and Certified Case Manager with the Health Plans, MSO’s IPA’s and Inpatient/outpatient medical practices. Watching the UM practice evolve into what it is today. We have struggled to get this more automated and have more involvement and control by the PCP’s. To this day PCP’s and specialists still use fax machines, are slow to use technology such as Provider and Patient portals. The HIE’s systems are fragmented and what would seem to be an easily approved prior authorization for medically necessary services because a “proof of medical necessity” pending authorization because of our complicated fragmented system. Unfortunately vendors and collateral businesses have bias interest to keep things the way they are. Perhaps a DCP “Direct Primary Care” model that provides higher reimbursement to the Physicians and nurses rendering the care and coordination instead of the huge administrative losses we see today?

[@ahealthcarez]

Thank you for sharing your experience. All great observations. Thank you for watching!

[@houstonbaboon8992]

Really interesting video! Thank you so much

[@ahealthcarez]

Thank you for watching!!

[@bigb2littleb]

I wonder if anyone has every done a study on patients who ever walked out of a hospital and not have their medical procedure do to out of pocket cost. For an example, the admissions persons tells the patient, to have your gal bladder out today it will be $3,000.00 deductible and payment it do today. Patient tells them that they can not afford that and walks out. As a doctor have you seen that?

[@ahealthcarez]

Thank you for your question. Yes it does happen. Not aware of a study that quantifies it though.

[@mrpips76]

Great video Dr. Bricker. It's nice to see someone brining up these discussions in the public realm. The information on PA's is far too limited. I've often wondered why CMS doesn't share MA data. After all, the United's, Humana's and Aetna of the world are "contractors" hired by Medicare to manage millions of Medicare members. Yet I don't believe CMS shares MA data to the public? I don't believe CMS share's the data details of each Medicare Advantage plan; although I could be wrong. I work with a TPA hired by the major MA's across the country, managing over 13 million lives for oncology and cardiology prior authorization services. My focus is on auditing, clinical data analysis and interpretation, and special operations projects. As a TPA, upon request, we are required to share data with any of the MA's who contracted us to manage their members that they inherited from Medicare. I would assume each MA would also subject be to submit data to CMS, as needed. If so, would CMS be subject to disclose this data to the public? Please keep these video's going. For such a significant portion of the healthcare spend, prior authorization deserves more attention and video's like yours become extremely valuable. Thank you so much for the video!

[@ahealthcarez]

Thank you for watching and for your comment.

[@awolf876]

As someone who makes those PA calls and does a lot of part B medical billing for MSK, I found this fascinating. I’d love to know how much admin time is wasted as a whole because the insurance denied claims regardless of authorization being obtained and how much money the insurance companies makes as a result.

[@ahealthcarez]

Thank you for watching and sharing your thoughts.

[@jakehuang3545]

Hi Dr. Bricker. First of all I want to thank you for your videos. I am currently a masters student in healthcare and your videos have done more to teach me than any of my professors. Second, I am working this summer as an intern at AIM and I am tasked with finding a research topic that is related to their preauth business (esp. their shopper program). I am wondering if you have any suggestions? Thanks again for all your wonderful videos!

[@ahealthcarez]

Thank you! You are very kind. Yes, I specifically have a video on AIM. I’ll post it tomorrow. It may help. Appreciate you watching!

[@jakehuang3545]

@@ahealthcarez thank you!

[@warszawskilekarz]

Here is something, Insurance companies should be required to do internal "PA", with their own resources, and their liability, for delays in care they cause, for wrong decisions... They should be dealing with upset patients...

[@ahealthcarez]

Thank you for watching and for your comment. All this happened in the 1990s. We will see if we just repeat what happened then.

[@realandtrue2542]

Dr of usa has to much more study axillary work, not study for patient care. if i am a doctor, I will forget medical knowledge as studying insurances in USA.

[@ahealthcarez]

Thank you for watching and sharing your thoughts.