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Administrative Simplification and Fair Contracting

Most physicians spend much of each day dealing with prior authorizations, insurer contract issues, complex claim filings and other nonclinical activities, costing the practice money while doing nothing to improve patient care.

Please contact Emily Carroll, JD, Senior Legislative Attorney, with any questions. 

Prior authorization

Health insurers are increasingly requiring prior authorizations for pharmaceuticals, durable medical equipment and medical services.  Unfortunately, the inefficiencies and lack of transparency in prior authorizations processes cost physicians and patients time and money.  In addition, the lengthy processes may have health consequences for patients when treatment is delayed.

States are taking action.  In 2013, 27 states introduced over 30 pieces of legislation with the goal of improving and streamlining the prior authorization process.  Fourteen states enacted their legislation into law.

The AMA has model legislation that aims to reduce the administrative burden prior authorizations require of practice, and increase the transparency of insurers authorization processes.

The AMA has also developed a white paper that outlines the costs and workflow inefficiencies of the current process required of physicians trying to obtain prior authorizations from payers, as well as efforts to streamline the process.


Fair contracting

The AMA believes that insurers should abide by fair business and contracting principles. To assist advocates in determining the best state laws related to managed care contracting, the AMA has created the National Managed Care Contract (NMCC) database. This resource is a valuable tool for physician advocates, allowing them to:

  • research existing state managed care legislation and regulations from around the country 
  • stay abreast of emerging state and federal legislation and regulatory trends 
  • support legislative and regulatory managed care reform efforts 
  • develop language and principles for managed care regulation 
  • ensure managed care organizations’ contracts and business practices comply with state laws and regulations  
  • conduct advanced legal research and support litigation against inappropriate practices of managed care organizations
  • access issue briefs that discuss key managed care contracting issues for physicians, such as medical necessity, contract termination and overpayment recovery efforts 
  • research AMA policy on specific managed care issues

Rental networks

Rental network PPOs are entities whose business practices focus on brokering physician discounted rates. The rental network PPO develops provider panel and then leases its panel and associated provider discounts to various payers. These discounts often find their way to a very broad range of entities without prior approval from the physician, and often times without any notice, robbing the physician of rightful reimbursement and corrupting the integrity of the PPO agreement.

The AMA believes the rental network PPO market must be fair and transparent and “silent PPOs” and other unauthorized entities should not be allowed to access rental network PPO contract discounts.

The ARC worked extensively with the National Conference of Insurance Legislators (NCOIL) to develop a model bill to improve transparency in the rental network market. View the related issue brief and talking points for more information.

Health Insurer Code of Conduct

The AMA has developed 10 explicitly defined principles governing both clinical and business operations of health plans which the medical profession believes to be critical to enable an efficient, patient-centered health care system. The AMA encourages all health insurers and other third-party payers to pledge to conduct business in adherence with the Health Insurer Code of Conduct. Learn more and access the complete AMA Health Insurer Code of Conduct.