Arizona plan reinstitutes preauthorization

Physicians question whether such a move was necessary, even for the HMO's financial benefit.

By Leigh Page, AMNews staff. May 14, 2001.

As Arizona practices have discovered, health plans that abolish prior authorization requirements for referrals, tests and other services can bring them back again.

Other health plans that did away with the policy, such as UnitedHealthcare, are hanging tight. But Health Net of Arizona Inc., a subsidiary of Foundation Health Systems Inc. of Woodland Hills, Calif., reimplemented prior authorizations in April, after a $24.8 million loss in 2000.

Practices report that the policy change, though allowable under the contract, came with little warning. Both practices and plan were short of staff to process the requests because these people had been reallocated to other jobs. The health plan conceded that in the first week, practices were on hold an average of almost an hour to get authorizations.

"It creates havoc in your office," said Dan Topp, executive director at the Carondelet Medical Group, a 40-doctor group in Tucson, Ariz. Procedures had to be canceled because authorizations did not come through, he said.

While Topp and others acknowledge that the backlogs have ended, they say they have had to rejuggle staff to process the requests.

But some physician groups are wondering why Health Net is bringing back preauthorization, given that almost a month into the process, not one of their requests had been denied.

"We're still trying to understand how this is saving money," Topp said.

Health Net spokeswoman Sally Fernandez, however, insists that the insurer is denying 3% of requests, a rate that is slightly higher than during the plan's last prior authorization policy. [...]