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Sen. Tyler Johnson has again authored a bill in the Indiana General Assembly that would put some reins on “prior authorization” for medical services and prescriptions by insurance entities.
Prior authorization is a method by which insurance companies scrutinize medical provider orders for services and prescriptions before coverage is approved. Tyler’s legislation last session did not survive despite strong bipartisan support because of concerns over potential increased costs to state employee health plans and Medicaid.
Physicians and other medical providers will tell you that PA is out of control and has transcended any legitimate rationale for its establishment. It was advanced as a way to address health care system waste, fraud and abuse, and better assure that medical care provided was safe, high-quality, cost-effective, evidence-based and medically necessary.
However, the medical community views PA as primarily a method for employers to cut costs and for the insurance industry to limit or delay payments to increase profits. “Deny and delay” is the mantra commonly recited by PA critics. Medical providers can recount endless examples of the PA system denying or delaying reasonable and needed care, testing, and prescriptions essential to optimal care in the best interests of patients. Denials can also result in cost shifting to patients.
PA can even interfere with routine clinical decision making. Do we really need insurance entities to provide draconian oversight over the expertise of medical professionals in all but possibly the most complex and costly cases?
PA adds administrative burdens and increased costs to medical practices, necessitating expanded staff and significant physician and staff time submitting PA requests and responding to denials. Better to allocate these resources to direct patient care.
Most important, PA can be a dangerous barrier to care for patients. Interruptions, delays and denials can result in the worsening of medical conditions, leading to even more costly testing, treatments and avoidable or longer hospitalizations. Examples are the patient who is urgently awaiting a prescription or an MRI approval while the patient’s condition deteriorates. Worse are denials for essential services or medications. There’s a legion of scenarios.
Here are some of the major PA reforms in Johnson’s Senate Bill 480 (as introduced):
◗ A mandate that an insurer may only impose PA requirements annually on less than 1% of unique health care services and less than 1% of health care providers overall.
◗ Payment of claims cannot be retrospectively denied if the services were prior-approved, submitted appropriately and performed in good faith.
◗ Restrictions on retrospective review or denial of claims in certain circumstances for unanticipated medically necessary services without a PA.
◗ Prohibition of PA requirements for emergency services, medications for opioid use disorder, and medications with a net annualized cost of $100 or less (including step-therapy requirements).
◗ If adverse PA determinations are made, providers may request a “peer-to-peer” case review to be conducted within 48 hours of the request.
◗ Adverse PA decisions, including appeals, must be made by a clinically experienced physician in the same or similar specialty as the requesting provider.
◗ PA transparency with current requirements and restrictions, detailed statistics on approvals and denials, and clinical criteria used readily accessible on the entity’s website.
◗ New time limitations on PA determination responses for various services, prescriptions, and emergency and urgent health care situations.
Although the bill will undoubtedly be modified in the legislative process, the need for this legislation is undeniable. Let’s hope for its enactment this year.•
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Feldman is a family physician, author, lecturer and former Indiana State Department of Health commissioner for Gov. Frank O’Bannon. Send comments to ibjedit@ibj.com.
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