What’s the news: Prior authorization is a huge administrative burden for physician practices that often delays patient care. But prior authorization is also bad for business, because those delays interfere with having a healthy, productive workforce.
Prior authorization has in fact interfered with a patient’s job responsibilities, according to a majority of physicians (51%) who participated in a newly released AMA survey (PDF) of 1,004 physicians who treat active members of the workforce.
“Health insurance companies entice employers with claims that prior authorization requirements keep health care costs in check, but often these promises obscure the full consequences on an employer’s bottom line or employees’ well-being,” said AMA President Gerald E. Harmon, MD.
While health insurers tout prior authorization as a cost-saving measure, the AMA survey of 1,004 physicians conducted in December found that it can lead to absenteeism and a less productive workforce.
“Benefit plans with excessive authorization controls create serious problems for employers when delayed, denied or abandoned care harms the health of employees and results in missed workdays, lost productivity and other costs,” said Dr. Harmon, a family physician in South Carolina.
More than nine in 10 physicians (93%) reported care delays while waiting for insurers to authorize necessary care, and 82% said prior authorization can lead to treatment abandonment because of prior authorization struggles with their insurance company.
Why it’s important: Prior authorization is a health plan utilization-management or cost-control process that requires physicians to get approval before a prescribed treatment, test or medical service qualifies for payment.
More than one-third (34%) of physicians reported that prior authorization led to a serious adverse event. This includes hospitalization (24%), and disability or even death (8%) for a patient in their care.
Meanwhile, 30% of physicians reported that prior authorization criteria are rarely or never evidence-based, with 91% saying prior authorization has a somewhat or significant negative impact on patients’ clinical outcomes.
“Now is the time for employers to demand transparency from health plans on the growing impact of prior-authorization programs on the health of their workforce,” said Dr. Harmon.
To help employers—the nation’s largest purchasers of health insurance—choose the right plan to provide coverage for their workforce, the AMA offers the recommendations below.
Ask health insurance plans questions during the next benefit-contracting season. The AMA offers employers a list of questions (PDF) to ask plans about how their prior-authorization requirements may affect employees.
Solicit feedback from employees about their experience with prior authorization. The AMA encourages employers to use a benefit satisfaction survey, anonymous human resources complaint line, or open engagement with HR representatives.
Take action by visiting FixPriorAuth.org. Employers and their workers can submit stories and sign the AMA’s reform petition.
Health plans, the AMA, hospitals and others agreed to make a series of improvements (PDF) to the prior-authorization process several years ago, but despite the harmful repercussions of delayed or disrupted care, most payers are not making meaningful progress on reforms.
Learn more: Prior authorization also has negative economic consequences for physician practices as a small business. On average, practices must complete 41 prior authorizations per physician each week. This workload consumes almost two business days of physician and staff time, with 40% of physicians reporting that they’ve hired staff who work exclusively on prior authorizations.
It’s no wonder, then, that 88% of physicians in the survey reported that the administrative burden associated with prior authorization is high or extremely high.
The AMA works to right-size prior authorization through research, collaborations, advocacy and leadership so physicians can focus on patients rather than paperwork. Patients, physicians and employers can read about reform efforts and share their personal experiences with prior authorization at FixPriorAuth.org.