Prior Authorization Reform

Prior authorizations for healthcare services are a source of frustration for many providers and patients, who say they create burdensome administrative hurdles, delays, and—in some instances—denials of necessary care.  

Prior authorization processes need to be streamlined and targeted so that clinicians can focus their time on patient care, and patients can access needed services and medications without having to jump through unnecessary and frustrating bureaucratic hoops.  

But prior authorizations also serve an important role in flagging unnecessary, inappropriate, and low-value care, which are well-documented problems in the U.S. healthcare system. Any reforms must preserve that critical function.

One study estimated that nearly 8% of commercial payer dollars in 2016 was spent on overtreatment. Another study of elective outpatient CTs and MRIs found that 26% were not considered appropriate. Even surveyed physicians said that they believed over 20% of medical care is unnecessary.

And it’s not just employers who are paying for these inappropriate or low-value services, it’s also employees and their families, who bear these costs before they reach their deductibles or through copays and coinsurance, or higher premium costs.

Unnecessary services can also cause physical harm to patients. No medical procedure is without risk, and invasive, unneeded procedures can yield poor outcomes. When one large company offered a spine center of excellence program to its members, they found that more than one-third of individuals referred for surgery did not need that surgery. Indeed, a prospective observational study of 544 patients in the journal Frontiers in Surgery found that 60% of patients were recommended unnecessary spine surgery.

With Maine employers and families already struggling to afford the high cost of health care, they should not have to pay for care that is inappropriate, unnecessary, or of little value.

Prior authorizations are an important tool that can minimize inappropriate or unnecessary care. While prior authorizations should be streamlined as much as possible, any reforms to those processes must preserve a plan’s ability to limit inappropriate and overutilization of care and ensure that plan dollars are supporting appropriate care and services.