Prior Authorization Reform Act: How it could help physicians and patients
Key Takeaways
Prior authorization is a cost-saving measure instituted by insurance companies in which approval’s required before a patient can receive a certain medication or treatment.
Prior authorization requests impede patient care and also place an administrative and economic burden on physician practices.
Bill 24-655 was recently introduced in the District of Columbia to curb prior authorization practices and incorporate more transparency in the process.
An emerging piece of legislation could help you better serve patients more efficiently.
The Prior Authorization Reform Act of 2022 (also known as Bill 24-655) was recently introduced in the District of Columbia.[]
This bill is intended to set limits on prior authorization requirements by insurance companies that impede patient access to essential medical care. With its introduction, the District of Columbia joins more than 40 states that have passed legislation to address prior authorization requirements.
The burden of prior authorization
Under medical and prescription drug insurance plans, certain treatments and medications require approval from insurance companies before they can be administered to patients and qualify for payment coverage.
Without approval for a prior authorization request, the insurance company won’t cover the treatment or medication.
While prior authorization practices are instituted as cost-saving measures by insurance companies, they can have deleterious effects on patient care.
According to a 2021 American Medical Association (AMA) physician survey that examined prior authorization’s impact on patient care, 93% of physicians reported delays while waiting for insurance companies to approve prior authorization requests.[]
Alarmingly, 82% of physicians said that their patients were sometimes forced to abandon medically necessary treatments due to struggles with authorization requests. Approximately one-third of physicians reported that a patient in their care had a serious adverse event due to prior authorization, and 8% reported that it’s led to a patient’s disability, permanent bodily damage, congenital anomaly, birth defect, or death.
In addition to the substantial negative impact prior authorization has on patient care, it also places an economic burden on physician practices. Physicians have to devote staff time and office resources to submitting prior authorization paperwork to get clearance for medically essential patient care.
The AMA survey showed that physician practices complete an average of 41 prior authorizations per physician per week, with 40% of physicians reporting that they have dedicated staff members who work on prior authorizations, which amounts to 13 hours spent every week on this task.
Bill 24-655 facts
Bill 24-655 is a much-needed reform measure meant to curb prior authorization requests and increase transparency and accountability, ensuring that patients have access to life-saving treatments.[]
“Prior authorization is one of the biggest impediments to patient care, and this legislation would allow physicians to treat their patients without unnecessary paperwork and delays,” said Medical Society of the District of Columbia (MSDC) President Kirstiaan Nevin, MD, in a press release.[]
The bill prohibits insurance companies from requiring prior authorizations for treatments based solely on cost.
It also sets timelines for insurance companies to respond to prior authorization requests and appeals.
In addition, Bill 24-655 includes the following necessary reforms:
It eliminates repetitive prior authorization requests for the same treatment.
It limits patient care delays and lowers the risk of destabilizing patients with chronic conditions or those undergoing treatment.
It limits gaps in care when patients have to switch health plans.
It prohibits prior authorization in situations where it’s not appropriate, such as in obtaining medication for opioid use disorders.
It ensures that licensed physicians decide on prior authorization requests or appeals.
The bill also aims to increase transparency by mandating that health insurance plans publicly post—and provide upon request—the medications and services that are subject to prior authorization restrictions.
To further increase transparency, insurance companies also need to report prior authorization statistics, including rates of approval, denials, appeals, and decision wait times.
What this means for you
Prior authorizations create a significant obstacle for both clinicians and patients, often delaying the start of medically necessary care or forcing patients to abandon essential treatments. Bill 24-655 was introduced in the District of Columbia, adding the district to 40 states seeking to reform prior authorization practices. This could help you improve efficiency and patient care, as the bill prevents insurance companies from requiring prior authorizations entirely based on cost, and incorporates transparency into the process.