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Survey: Prior Authorization Hassles Persisted Mostly Unabated Through 2020

By Jonathan Springston, Editor, Relias Media

Even as the COVID-19 pandemic showed no signs of slowing through the end of 2020, insurance companies mostly continued with prior authorization policies — at least according to a survey of U.S. physicians conducted by the American Medical Association (AMA).

For years, U.S. healthcare providers have lamented prior authorization, a process whereby commercial insurance companies must give permission to a physician before moving forward with a medication or treatment. Providers argue these are burdensome requirements that place a wedge between them and patients and can lead to serious harm.

When the COVID-19 pandemic started in early 2020, providers likely were hoping for a break. But of 1,000 practicing physicians surveyed in December 2020, almost 70% said health insurers had either reverted to old prior authorizations policies or never relaxed those rules at all.

“As the COVID-19 pandemic began in early 2020, some commercial health insurers temporarily relaxed prior authorization requirements to reduce administrative burdens and support rapid patient access to needed drugs, tests, and treatments,” AMA President Susan R. Bailey, MD, said in a statement. “By the end of 2020, as the U.S. health system was strained with record numbers of new COVID-19 cases per week, the AMA found that most physicians were facing strict authorization hurdles that delayed patients’ access to needed care.”

In the December survey, 94% of respondents reported delays while waiting for insurers to authorize necessary care, and 79% said patients abandon treatment because of authorization hassles. Thirty percent of respondents said prior authorization requirements have led to a serious adverse event for a patient in their care: hospitalization (21% of respondents), life-threatening event or intervention to prevent permanent impairment or damage (18%), and disability or permanent bodily damage, congenital anomaly, birth defect, or death (9%).

Beyond patient harm, the survey results indicate there is an average of 40 prior authorizations per physician, per week, which takes up an estimated 16 hours of administrative work time. A total of 40% of respondents said they hired staffers who handle duties only related to prior authorization.

These survey results align with a similar AMA poll conducted in 2019 and with a December 2020 American Hospital Association report that detailed the extent of the prior authorization problem.

The COVID-19 pandemic has inflicted financial harm to the U.S. healthcare industry. As uncomfortable as it can be to discuss, while they try to treat patients, administrators are aware their facilities need every penny they can collect to remain financially viable so they can continue helping their communities. This means everything from improving general billing practices to closely monitoring CPT code changes to ensure reimbursement. Denied claims not only can lead to adverse patient outcomes; these denials lead to even more financial headaches.

The cover story of the upcoming June issue of Hospital Access Management will address the rise in denied claims and the extent of how bad the problem has become. Author Stacey Kusterbeck will address changes patient access departments have made to push back against prior authorization and the best techniques to overturn claims denials.