Bills in 30 states show momentum to fix prior authorization

. 4 MIN READ
By
Kevin B. O'Reilly , Senior News Editor

What’s the news: A majority of U.S. states are considering legislation to rightsize the time-wasting, care-delaying payer practice of prior authorization. In all, nearly 90 prior-authorization reform bills have been considered this legislative session in 30 states, and more than a dozen are still on the table for potential passage.

Fixing prior authorization

Prior authorization is costly, inefficient and responsible for patient care delays. The AMA stands up to insurance companies to eliminate care delays, patient harm and practice hassles.

That includes legislation in Arkansas, California (PDF), New Jersey (PDF), North Carolina (PDF), Washington, D.C. (PDF), and Washington state.

Many of the bills draw on the AMA’s model legislation (PDF) and encompass prior-authorization reforms to:

  • Establish quick response times (24 hours for urgent, 48 hours for nonurgent care).
  • Allow adverse determinations only by a physician licensed in the state and of the same specialty that typically manages the patient’s condition.
  • Prohibit retroactive denials if care is preauthorized.
  • Make authorization valid for at least one year, regardless of dose changes; and for those with chronic conditions, the prior authorization should be valid for the length of treatment.
  • Require public release of insurers’ prior authorization data by drug and service as it relates to approvals, denials, appeals, wait times and more.
  • Require a new health plan to honor the patient’s prior authorization for at least 90 days.
  • Reduce volume through the use of solutions such as prior authorization exemptions or gold-carding programs.

"The momentum behind prior-authorization reform feels powerful right now, with dozens of bills in state legislatures this year and advocates laying the groundwork for next year," said AMA President Jack Resneck Jr., MD. "These efforts join major reforms at the federal level being proposed and finalized. Policymakers and other stakeholders seem to be realizing what patients and physicians have known for a long time—prior authorization harms patients, undercuts clinical decision making and wastes valuable health care resources."

Related Coverage

1 in 3 doctors has seen prior auth lead to serious adverse event

The progress at the state level comes as the Centers for Medicare & Medicaid Services (CMS) has taken action at the federal level, releasing a final rule (PDF) last month that revises Medicare Advantage prior-authorization program requirements. In February, the AMA and nearly 120 physician organizations sent a letter (PDF) to CMS Administrator Chiquita Brooks-LaSure in strong support of the proposed prior-authorization changes, and many of the provisions have been finalized.

Fixing prior authorization is a critical component of the AMA Recovery Plan for America’s Physicians.

Prior authorization is overused, and existing processes present significant administrative and clinical concerns. Find out how the AMA is tackling prior authorization with research, practice resources and reform resources.

Why it’s important: As AMA Executive Vice President and CEO James L. Madara, MD, explained in a letter (PDF) supporting New Jersey Assembly Bill 1255, “AMA survey data released earlier this month show that 94% of physicians report care delays because of prior authorizations. The same survey [PDF] found that 89% of physicians saw prior authorization as having a negative effect on their patients’ clinical outcomes and 80% of the physicians surveyed indicated that patients abandon treatment due to authorization struggles with health insurers.

“Alarmingly, AMA data also show that 33% of physicians report that prior authorization has led to a serious adverse event for a patient in their care, such as hospitalization, permanent impairment or death,” Dr. Madara wrote in the letter to the chair of the state assembly’s Financial Institutions and Insurance Committee.

The New Jersey bill, like others advanced in legislatures across the country, “would go a long way in reducing patient harm as a result of prior-authorization requirements,” he added.

The Medical Society of New Jersey supports A1255, said Josh Bengal, director of government relations and staff counsel there.

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How doctors shaped prior-auth reforms in Medicare Advantage

“Our ongoing conversations with legislative leadership revolve around the dire need to support our physician and patient communities, especially in the wake of the pandemic,” Bengal said. “We hope these critical bills will move forward before the legislature’s summer recess.”

Learn more: Patients, physicians and employers can learn more about reform efforts and share personal experiences with prior authorization at FixPriorAuth.org.

Visit AMA Advocacy in Action to find out what’s at stake in fixing prior authorization and other advocacy priorities the AMA is actively working on. 

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