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Friday, January 24, 2020

One of the major themes dominating health care discussions today is that healthcare costs in the United States are proving unsustainable. In 2016, the U.S. spent $3.35 trillion, or approximately 18 percent of gross domestic product, on health care (Papanicolas, Woskie, & Jha, 2018). Practices known as utilization management (UM) are one of the attempts the cost of health care has been addressed.

Utilization Management (UM) techniques take several different forms, all aimed at managing health care costs by influencing patient care decision-making through case-by-case assessments of the appropriateness of care (Institute of Medicine Committee on Utilization Management by Third Parties, 1989) across the health care system including drugs, imaging, etc. When implemented appropriately, these techniques can enhance the patient experience. However, UM practices can also negatively impact patient access to care as well as contribute to provider burden (American Medical Association, 2018).

What is Prior Authorization?

Prior Authorization (or pre-authorization, PA) is a common UM tool where a member of the health care team must obtain approval from a patient’s health insurer to determine if a prescribed procedure, medication, service, or device will be covered by the health insurance plan, prior to the patient receiving it. The use of PA for prescriptions and medical services has continued to increase in recent years, according to a 2018 survey by the American Medical Association.

PA is utilized by private insurance providers, government insurance providers like Medicaid and Medicare, and other health care decision makers like pharmacy benefit managers (PBMs). PA is also often required in Medicare Advantage (MA) plans. MA plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all Part A (hospital insurance) and Part B (medical insurance), and often Part D (prescription drug coverage), benefits. The Kaiser Family Foundation found that nearly four out of five MA enrollees are in plans that require PA for some services, such as inpatient hospital stays, skilled nursing facility stays, and durable medical equipment.

How Does PA Impact Patients?

In a 2016 CSC report, “Access to Care in Cancer 2016: Barriers and Challenges,” which surveyed approximately 800 cancer patients about prior authorization, we found that nearly half of respondents reported that they were told the treatment prescribed to them would require prior authorization. This can lead to:

  • Delays: High wait times due to PA may lead to delays to optimal drug access (American Medical Association, 2018). More than 26% of people surveyed experienced significant delays in starting physician-recommended treatment (Cancer Support Community, 2016).
  • Treatment Changes or Abandonment: High wait times may also lead to treatment abandonment. More than 17% of the patients surveyed changed their treatment decision due to the prior authorization requirement (Cancer Support Community, 2016).
  • Unexpected Out-of-Pocket Costs: Approximately a quarter of respondents surveyed in the CSC report stated unexpected out-of-pocket costs due to the PA requirement for physician-recommended diagnostic tests or treatments.
  • Rejection of Recommended Service: In a worst-case scenario, the use of PA may lead to a rejection of prescribed medication or service. If this happens, you and your doctor could appeal the decision.

How Does PA Impact Providers?

In addition to being a barrier to patient care, PA can also contribute to physician burden. Physician practices complete, on average, over 29 PAs per physician weekly and took approximately two business days of physician or staff time to complete this PA workload (American Medical Association, 2018). Based on these statistics it is not surprising that more than 1 in 3 of physicians in the 2018 American Medical Association survey of 1,000 physicians reported that they have staff who work exclusively on PA.

Advocacy Opportunities

At the CPI, we advocate for access to affordable, comprehensive cancer care. The outlined ways PA can negatively impact access to care is a perfect example as to why it is important for all health care stakeholders, including health care systems, health insurance companies, PBMs, employers, and members of the health care team, to all come together to advocate for policies that protect patients.

Federal and state policy activities provide additional opportunities for PA advocacy engagement, including mandating use of technology solutions, standardizing forms and processes, and increasing transparency.

State Policies:

  • Many states have passed legislation and/or regulations containing PA conditions, including:
    • Mandating the use of electronic prior authorization (ePA) so that patients get their medications, services, or procedure more quickly
    • Requiring that a standard PA form is updated and reviewed by stakeholder groups and maintained by the state’s commissioner of insurance
    • Implementing deadlines by which the insurer must respond to appeals in addition to providing information regarding why the claim was denied

Federal Policies:

  • Improving Seniors' Timely Access to Care Act of 2019: This bipartisan bill, introduced last year in the U.S. House of Representatives, establishes several prohibitions, requirements, and standards relating to prior authorization processes under MA plans. Learn more about this bill here.
  • Centers for Medicare & Medicaid Services (CMS) proposals and initiatives:

What Can You Do?

You may now be wondering if your insurance plan requires the use of PA. Talk to your health care provider to see if a prescribed medication, procedure, or service requires PA. Often times your provider will have an idea if this extra step is required. Another way you can check to see if your medications require PA is by looking up your health insurance plan's drug formulary. A drug formulary is the list of prescription drugs, both generic and brand-name, that are covered by your health insurance plan. As a patient you can obtain information about your plan's prescription drug coverage and find out if the medications you need to take require PA. You can even call your health care insurer directly to request this information. Additionally, a patient navigator or social worker can also be helpful in understanding the PA process. Talk with one of our Cancer Support Helpline counselors at 1-888-793-9355 if you have questions navigating PA.

Another way to get involved is by sharing your story. You can make your voice heard through our Share Your Story tool, and by signing up for the Grassroots Network to receive regular updates about policies that could impact cancer patients and their families, and make your voice heard with decision makers at every level.

Missed the first blog in our UM series? Read it here!

References:

American Medical Association. (2019). 2018 AMA Prior Authorization Physician Survey. https://www.ama-assn.org/system/files/2019-02/prior-auth-2018.pdf

American Medical Association. (2018). 2017 AMA Prior Authorization Physician Survey. https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-browser/public/arc/prior-auth-2017.pdf

American Medical Association. (2019). Measuring progress in improving prior authorization. https://www.ama-assn.org/system/files/2019-03/prior-auth-survey.pdf

Cancer Support Community. (2016). Access to care in cancer 2016: Barriers and challenges. Washington, DC: Author.

Institute of Medicine Committee on Utilization Management by Third Parties. (1989). Controlling costs and changing patient care?: The role of utilization management. National Academies Press: Washington, DC.

Kaiser Family Foundation. (2019). Analysis of CMS Medicare Advantage Enrollment and Benefit Files. Retrieved from: http://files.kff.org/attachment/Data-Note-A-Dozen-Facts-About-Medicare-Advantage-in-2019

Papanicolas I, Woskie LR, Jha AK. Health Care Spending in the United States and Other High-Income Countries. JAMA. 2018;319(10):1024–1039. doi:10.1001/jama.2018.1150

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