By Rebecca Cooper, Policy Specialist, & John Molera, Senior Policy Analyst
Independent primary care is critical to the health and well-being of communities nationwide. However, time spent dealing with administrative burdens is time taken away from primary care practices providing high-quality, efficient and comprehensive care to their patients.1
Prior authorization (PA) rises to the top of the administrative burden list. In our previous solely fee-for-service health system, PAs were implemented to curb waste and abuse. In this environment, there were potential economic incentives to bill for multiple, potentially unnecessary services, and health plans implemented utilization management tools like PAs to ensure efficiency and appropriate patient care.
However, PA requirements often undermine clinical decision-making and can negatively impact patient outcomes.2 This comes at a high cost for small and independent practices with limited administrative resources , particularly those in communities that may have reduced access to care.
As we move toward a health system that promotes value and trusts physicians with decision-making on high quality care, current PA requirements need an updated perspective and significant policy adjustments. Successful reforms require alignment and cooperation from all parties touched by PAs: physicians, health plans and patients.
Aledade’s suggested solutions to address PA burdens include:
- Invest in independent primary care and accountable care models to ensure the long-term sustainability of high-quality primary care that rewards outcomes, not more services.
- Adjust PA requirements through gold card programs including exemptions for clinicians in accountable care arrangements and risk-based contracts.
- Authorize waiving PA for a minimum period of time for certain services to avoid unnecessary duplicative requests; for those with chronic conditions, the PA should be valid for the length of treatment.
- Improve transparency on PA request data, require data reporting on requests and continue to develop technology to improve efficiency for these requests.
PAs are administratively burdensome, difficult to measure and fuel wasteful spending.
Health care costs continue to rise nationwide, largely due to wasteful administrative spending.3 Recent research shows administrative costs make up between 20%-34% of health care costs, but it is incredibly challenging to obtain accurate information across health plans to determine the specific physician cost and the total system cost of PAs.4
Primary care physicians can spend hours5 on administrative tasks like documentation management, dealing with EHRs, and on PA treatment requests. Often they have staff dedicated to completing PAs.
A recent Department of Health and Human Services report found health plans will sometimes deny or delay their beneficiaries’ access to services, even if the request meets coverage rules resulting in added burdens for clinicians and practices.6
A Kaiser Family Foundation report found that 11% of Medicare Advantage PA denials were appealed, and the vast majority (82%) of those resulted in fully or partially overturning the initial denial7 – demonstrating the frequency of unnecessary disruptions to care and administrative headaches that drain practice resources.
Independent physicians often report challenges with PA requests because they may not have the staff capacity to have a dedicated person or team to handle those tasks.8 And, when they do have staff dedicated to PAs, it takes time away from high-value work such as patient engagement, making ED follow-up calls or scheduling visits.
The transition to value-based care is centered on clinicians providing the highest quality care to their patients, and we should address anything that stands in the way of that goal – including the burden of PAs. Even in value-based care arrangements, where physicians are already financially incentivized to keep their patients healthy and out of the ED, primary care practices still grapple with burdensome PA requirements that may have the opposite effect.
Current levers to address PA burdens: lessons from state policy
In response to the adverse impacts reported by physicians, a handful of states and administrative agencies have taken steps to deal with the inefficiencies and interruptions to patient care created by PA requests. Approaches include implementing gold card legislation; minimizing instances of duplicative and repetitive requests; and improving transparency to track data on PA requests.
Gold card legislation is a relatively new approach to address PA burdens. Texas,9 Michigan10 and West Virginia11 have adopted laws that allow physicians who have a certain percentage of PA requests for a service or drug approved over a stated time period to obtain a “gold card” which exempts them from PA for that service. A number of other states have introduced or are considering “gold card” legislation.
Transparency is another common target for PA reforms. In Michigan, health plans are required to report PA data annually to better track requests and streamline how doctors’ offices and payers interact to ultimately improve access to care for patients.12 Urging transparency from plans can lead to a better understanding of the limitations and benefits of PA.13
Recommendations to address administrative burdens
Stakeholders across the board including policymakers, health plans and ACOs, can and are building on these efforts and policies. They are working together to create a more efficient system for processing PA requests, especially when physicians are in value-based care models.
- Invest in independent primary care and accountable care models to ensure the long term sustainability of high quality primary care: Supporting primary care, especially independent clinicians, is critical to quality care and improved outcomes. Aledade’s work to provide data and support to practices can help ease some other administrative burdens faced by independent practices. The ACO model also allows practices to invest their shared savings in a variety of ways, including having the staffing, data analytics and tools to use evidence-based decision-making and provide high quality, high value care that is not duplicative or prone to overuse. Continued support for primary care and the ACO model will help ensure practices continue to assume financial responsibility for taking high quality care of their patients, reducing the administrative burden of PAs.
- Adjust PA requirements through gold card programs, including exemptions for clinicians in accountable care arrangements and risk-based contracts: We support the gold card legislation approach but note there can be challenges in implementation, especially when active communication is required to alert physicians of their gold card status for specific procedures. Special considerations should be made for clinicians who work in value-based care arrangements and are accountable for total cost of care for their patients. In Arkansas, for example, proposed legislation* includes a clause for physicians in value-based care arrangements to be exempt from PA requirements.14 A recent consensus group of major health associations also agreed to “encourage appropriate adjustments to PA requirements when health care providers participate in risk-based payment contracts.”15
- Ensure approved PA requests remain valid for a minimum period of time for certain services to avoid unnecessary duplicative requests; for those with chronic conditions, the PA should be valid for the length of treatment: Physicians and health plans recognize the need to ensure continuity of care, especially for those undergoing active treatment, or those with chronic conditions. In order to ensure continuity of care, PA approvals should remain valid for a clinically appropriate amount of time. In Colorado, proposed legislation seeks to make authorization valid for at least one year. The American Medical Association, among others, have proposed that PA should be valid for the length of treatment for patients with chronic conditions.16,17
- Improve transparency on PA request data and require data reporting and continue to develop technology to improve efficiency for these requests: Having PA data (including approvals, denials, appeals and wait times) stratified by drug/service type available, could significantly improve communication and expectations between clinicians, health plans and their patients, by creating an environment of accountability to ensure timely determinations on PA requests. Policymakers could also consider incentives to adopt technology that would streamline and standardize the PA process for clinicians, health plans and other stakeholders.
Dr. Glenn Kotz has operated his medical practice in Basalt, Colorado, since 1991. As an independent physician, he knows first-hand the impact of administrative burdens on both his practice and his patients, and he ranks PA requests among the most impactful of those burdens.
Following up with insurers on claims, responding to changes in coverage for patients’ medications and services – these are tasks with dedicated teams at hospitals and health systems, but for small practices with limited capacity, they are administrative burdens.
Case in point: Dr. Kotz cites the example of a Medicare patient with a history of substance use disorder and a diagnosis of ADHD. His practice invested significant time to get the patient’s delayed-release Vyvanse. The patient had responded well to Vyvanse, as opposed to a shorter-acting stimulant, and the practice didn’t want to risk the patient’s progress in recovery. However, despite ongoing effective treatment, the health plan required a new PA for the same medication, resulting in an interruption of care and a drain on practice resources.
Dr. Kotz reports these situations occur often, where a new PA is required for the same patient with the same medication, or where a change in coverage means a change in medication the patient receives.
Dr. Karen Smith, an independent physician in Raeford, N.C., has been practicing for more than 30 years. When asked to name the biggest administrative burdens her practice experiences, she immediately noted PAs, especially for prescriptions or medication modifications.
According to Dr. Smith, she often writes prescriptions, only for patients to be turned away at the pharmacy because prior approval is needed through the health plan. This, she noted, creates distrust with the patient, leaving her patients to wonder, “Did she give me something helpful or harmful? Did she know this would cost so much money? Did she care to check that the drug was one the insurance company would immediately approve? Did she care about my time coming to her, to the pharmacy, and now needing to do this over again?”
Case in point: Dr. Smith had a patient diagnosed with diabetes who was able to get a prescription approved through a previous physician after several alternatives were utilized. She wrote the prescription for the same medication; it was immediately denied, and she was sent a list of basic alternatives he could take.
However, because of other conditions documented in his chart, those basic prescriptions would not work for him; only the original medicine was appropriate. Despite all the necessary information documented in the chart on day one, it took four weeks for the health plan to come to the same conclusion Dr. Smith reached in five minutes of clinical review. In that month, the patient’s condition was left untreated.
In her 30 years of practice, Dr. Smith has managed patients' medication; she knows what works and what doesn’t work, and patients’ health can be endangered when medications aren’t approved that she knows work. Dr. Smith noted working with Aledade is extremely helpful; the data she receives helps identify at-risk patients, and she can work with them early on medication management, but her patient care needs to align with the health plan incentives to keep patients healthy as well.
Alignment across stakeholders is urgently critical.
Aledade has been pleased to see providers’ and health plans’ shared commitment to improving the PA process. Alignment on this topic is critical because communication and collaboration will improve understanding of the issue and lead to opportunities to improve the process, promote quality and affordable health care, and reduce unnecessary burdens. With PA reform becoming a priority in a growing number of states, alignment between stakeholders is especially urgent.
Aledade is committed to working alongside a variety of stakeholders to help relieve the burden our independent physicians experience in a way that aligns with our mission: good for doctors, good for patients and good for society.
*As of 4/20/2023, the Arkansas legislation is engrossed, but has not become law.