January 15, 2024

30 States to Fix Prior Authorization Bills

The healthcare system is known for being complex, expensive, and often bogged down by red tape.

One primary culprit in this bureaucratic mess is the prior authorization process, which forces healthcare providers to jump through hoops and get the green light from health insurers before they can proceed with specific medical treatments or prescribe medications.

It's a headache that delays patient care and adds an administrative burden on healthcare professionals, frustrating everyone involved.

But here's a glimmer of hope.

The prior authorization reform bills are gaining momentum, with several states taking a stand. Around 90 bills related to prior authorization reforms are underway this legislative season across 30 states, including Arkansas, CaliforniaNew JerseyNorth CarolinaWashington, D.C., and Washington State. And the exciting part is that several bills are still to be considered, with the potential to bring about real change to healthcare.

This widespread legislative activity shows that more and more states are waking up to the need for a smoother and patient-centered healthcare experience.

Impact of Prior Authorization: Examining the Stats

In 2022, the American Medical Association (AMA) surveyed 1,001 practicing physicians to assess the effects of prior authorization (PA) on patients and physicians; the findings are alarming.

  • 94% reported care delays due to prior authorizations
  • 80% indicated that prior authorization could occasionally result in treatment abandonment
  • 33% reported severe adverse events due to PA delays
  • Healthcare professionals spend almost two business days per week completing PAs
  • 64% agreed that PA contributes to increased utilization of healthcare resources

These statistics underscore the significant strain that prior authorization places on physicians, consuming their precious time and negatively impacting patient well-being.

Expected Prior Authorization Reforms

The intricate and inefficient prior authorization requirements have persistently grappled healthcare providers and patients in a web of complexities.

Inspired by the American Medical Association's model legislation, a wave of expected PA reform bills sweeps nationwide.

Let's examine the crucial reforms that various prior authorization bills advocate for:

  • Implement swift response times (24 hours for urgent cases and 48 hours for non-urgent situations).
  • Mandate adverse determinations only by a state-licensed physician with the same specialty as the patient's primary condition.
  • Prohibit retrospective denials when the care has been preauthorized.
  • Extend the validity of prior authorizations to at least one year, irrespective of dose adjustments. For chronic conditions, prior authorizations should remain valid for the duration of the treatment.
  • Enforce transparency by mandating insurers to share comprehensive prior authorization data for drugs and services.
  • Ensure new health plans respect a patient's PA for a minimum of 90 days.
  • Streamline the process by exploring options like PA exemptions or implementing gold-carding programs to reduce the volume.

Excessive use of prior authorization is a pressing issue, and addressing this problem stands as a pivotal cornerstone of the AMA Recovery Plan for America's Physicians. 

Promising Developments in PA Reforms

While we eagerly await the approval of prior authorization reform bills presented by 30 states, there's a silver lining.

Notably, there have been significant developments in state-level prior authorization reforms aligned with federal actions initiated by the Centers for Medicare & Medicaid Services (CMS) to revise Medicare Advantage (MA or Part C), Medicare Prescription Drug Benefit (Part D), Medicare Cost Plan, and Programs of All-Inclusive Care for the Elderly (PACE) regulations. CMS has recently introduced a final rule amending prior authorization prerequisites.

The remarkable reforms brought about in the final rule include:

  • Equal Access Assurance — Ensures individuals with Medicare Advantage (MA) plans receive the same medically necessary care as those in Traditional Medicare.
  • Continuity of Care — Introduces provisions to minimize disruptions for beneficiaries. For enrollees switching to a new MA plan, coordinated care plans must waive off prior authorization for any ongoing treatment and offer a 90-day transition period. 
  • Oversight Committee — Requires all MA plans to establish a Utilization Management Committee for annual policy reviews and alignment with Traditional Medicare's coverage guidelines.
  • Prior Authorization Duration Clarity — Clarifies that prior authorization for a "course of treatment" must remain valid for as long as medically necessary, preventing care disruptions based on coverage criteria, patient history, and provider recommendations.

Prior authorization hinders access to essential and timely healthcare, frequently leading to negative clinical outcomes and, in severe cases, can even be life-threatening. This bureaucratic process not only obstructs the swift delivery of medical care but also introduces complexities in clinical decision-making. Physicians find themselves compelled to reassess treatment options to avoid unnecessary delays caused by jumping through authorization hoops.

As we strive for a healthcare system that prioritizes efficiency and patient well-being, it becomes imperative to address and alleviate the challenges posed by the current state of prior authorization, fostering a more seamless and patient-centric healthcare experience.

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