States tackle insurer delays in approving prescribed treatments
Andrew Bade, who was diagnosed with type 1 diabetes nearly two decades ago, is accustomed to all the medical equipment he needs to control his blood sugar. His insulin pump contains a disposable insulin cartridge and a plastic tubing system with an adhesive patch holds the cannula in place that delivers the insulin under his skin. He wears a continuous glucometer on his arm.
Bade, 24, has been using the same equipment for years, but every three months when he needs new supplies, his health insurance plan forces him to go through an approval process called pre-authorization.
Getting that approval can take up to three weeks, and Bade sometimes runs out of insulin before it arrives. When that happens, the Fenton, Michigan resident makes do with leftover preloaded insulin pens. They are less precise than the pump and he feels tired when he uses them. But they pass it on.
“I don’t understand why they take all this time to make these decisions and then they always say ‘yes’ anyway,” Bade said.
In April, Michigan lawmakers sought to help patients like Bade by approving a law that sets standards intended to speed up this process. From June 2023, health schemes will have to act on non-emergency prior authorization requests in nine calendar days and on urgent requests in 72 hours. In 2024, the deadline for non-urgent requests will be reduced to seven days.
“We are thrilled he was adopted,” said Dr. Nita Kulkarni, an obstetrician-gynecologist in Flint and a board member of the Michigan State Medical Society, who has lobbied for the law for years. “It’s a step in the right direction to reduce the wait time for therapy.
Michigan’s law is the most recent example of efforts by states, insurers and doctors to untangle a notoriously sticky process. Yet most initiatives have had limited success.
At least a dozen states have passed sweeping reforms, according to the American Medical Association‘s tracker. Others have passed narrower laws that target the process or certain types of medical care or drugs. However, state laws do not protect most patients because they participate in so-called self-funded plans, in which the employer pays claims directly rather than purchasing insurance for this purpose. Self-funded plans are generally regulated by the federal government, not the states. There is no extensive protection at the federal level for people with commercial coverage.
A 2018 consensus statement released by major groups of health plans and medical providers to improve the process has been slow to catch on.
Prior authorization requirements are intended to reduce unnecessary and inappropriate health expenditures. Few people would disagree with this goal. Studies have found that around a quarter of healthcare spending is wasted, whether due to overtreatment, overpricing, fraud and abuse, or problems with healthcare coordination and delivery.
Health plans say prior authorization requirements help them protect patient safety and improve quality of care, in addition to eliminating waste and errors. Doctors disagree. They say the process too often leads to delays in patient care, and those delays can sometimes cause consumers to drop out of treatment.
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Complaints are not limited to regular commercial coverage. A report released in April by the Inspector General of the U.S. Department of Health and Human Services examined a random sample of 250 prior authorization denials at 15 large Medicare Advantage plans in June 2019. It found that 13% of denials prior authorization by Medicare Advantage plans were for services that met Medicare’s coverage rules.
The use of these requirements by health plans continues to increase, according to medical groups. In a March poll, 79% of medical practices said pre-authorization requirements had increased over the past year, according to the Medical Group Management Association.
While insurers and providers may fundamentally disagree on the usefulness of pre-authorization, many agree the process needs improvement. The consensus statement lists several areas that the groups say need to be fixed. For example, they said doctors and other health care providers who follow evidence-based treatment guidelines and who have historically had high prior authorization approval rates could bypass the process.
The groups also agreed that a regular review of these requirements is a good idea, with the aim of delisting therapies that no longer warrant it. Improving transparency and automation was also on the list.
But doctors say insurers have made little progress in the four years since the paper was published.
“It’s been catastrophic,” said Dr. Jack Resneck Jr., a dermatologist who is president-elect of the American Medical Association. “We see the problem getting worse and we don’t see health plans taking action to honor the commitments they have made.”
The insurers say they are working on the items on the list.
“We believe that a number of problems can be solved by technological innovations,” said Kris Haltmeyer, vice president of policy analysis at the Blue Cross Blue Shield Association, one of the six partner organizations of the statement. He referred to an electronic prior authorization pilot project undertaken by the insurers’ trade association, AHIP, which has reduced the decision time on applications by 69%, to just under six hours.
That kind of quick turnaround would have made a big difference for Jodi Burk, 63, who has rheumatoid arthritis. Burk, who lives in Bellaire, Michigan, takes expensive biologic drugs to control his pain and other symptoms. A few years ago, her meds stopped working and the pain got so bad she couldn’t even walk her dog.
Her doctor prescribed her another biologic that she said would treat her symptoms. But the insurer wouldn’t approve the prescribed drug until she tried — and failed — four other drugs, a pre-approval process called step therapy.
It took five months before Burk was approved and started taking medication that effectively treated her symptoms. “With those delays, you don’t get better,” Burk said. “You are in more pain and your life is put on hold. There were a lot of things I could do and couldn’t do at that time.
In addition to establishing timelines for acting on prior authorization requests, Michigan’s new law establishes standards for notifying physicians and other health care providers of changes or additions to existing requirements. And it requires insurers to implement standardized electronic transaction processes for pre-authorization requests.
This web-based standard process was a key part of the law for insurers, said Dominick Pallone, executive director of the Michigan Association of Health Plans.
“Several times [providers] submit incomplete or incorrect information,” Pallone said. “We try to make it easy for the supplier and get it done quickly.”
“At the end of the day, we think we’ve reached a good compromise,” he said.
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and polling, KHN is one of the three main operating programs of KFF (Kaiser Family Foundation). KFF is an endowed non-profit organization providing information on health issues to the nation.