MGMA has partnered with the American Medical Association (AMA), American Academy of Family Physicians (AAFP), American College of Cardiology (ACC), American Hospital Association (AHA) and other organizations to release a set of prior authorization principles aimed at reducing the administrative burden associated with receiving approval from health plans, benefit managers and others to deliver care to patients. The goal of the initiative is to shine a bright light on today’s onerous prior authorization requirements and offer tangible recommendations for improving the current environment.
Utilization management programs, such as prior authorization and step therapy, create significant administrative challenges for physician practices. These highly manual, time-consuming processes employed by health plans burden practice clinicians and administrative staff by requiring the use of telephone, fax and web portals to transmit authorization requests and forward any supporting documentation.
In addition to diverting valuable practice resources away from direct patient care, prior authorization also creates significant barriers for patients themselves by often delaying the start or continuation of necessary tests or treatment. Too often the end result of this protracted prior authorization process is adverse patient health outcomes. Health plans and benefit managers counter that utilization management programs are employed to control costs and ensure appropriate treatment.
The coalition developed a set of 21 principles tackling the following four broad categories:
Clinical validity
1. Issue: Providers want nothing more than to provide the most clinically appropriate care for each individual patient. Cost-containment provisions that do not have proper medical justification can put patient outcomes in jeopardy.
Principle: Any utilization management program applied to a service, device or drug should be based on accurate and up-to-date clinical criteria and never cost alone. The referenced clinical information should be readily available to the prescribing/ordering provider and the public.
2. Issue: The most appropriate course of treatment for a given medical condition depends on the patient’s unique clinical situation and the care plan developed by the provider in consultation with his/her patient. While a particular drug or therapy might generally be considered appropriate for a condition, the presence of co-morbidities or patient intolerances, for example, may necessitate an alternative treatment. Failure to account for this can obstruct proper patient care.
Principle: Utilization management programs should allow for flexibility, including the timely overriding of step therapy requirements and appeal of prior authorization denials.
3. Issue: Adverse utilization management determinations can prevent access to care that a healthcare provider, in collaboration with his/her patient and the care team, has determined to be appropriate and medically necessary. As this essentially equates to the practice of medicine by the utilization review entity, it is imperative that these clinical decisions are made by providers who are at least as qualified as the prescribing/ordering provider.
Principle: Utilization review entities should offer an appeals system for their utilization management programs that allows a prescribing/ordering provider direct access, such as a toll-free number, to a provider of the same training and specialty/subspecialty for discussion of medical necessity issues.
Continuity of care
4. Issue: Patients forced to interrupt ongoing treatment due to health plan utilization management coverage restrictions could experience a negative impact on their care and health. In the event that, at the time of plan enrollment, a patient’s condition is stabilized on a particular treatment that is subject to prior authorization or step therapy protocols, a utilization review entity should permit ongoing care to continue while any prior authorization approvals or step-therapy overrides are obtained.
Principle: Utilization review entities should offer a minimum of a 60-day grace period for any step-therapy or prior authorization protocols for patients who are already stabilized on a particular treatment upon enrollment in the plan. During this period, any medical treatment or drug regimen should not be interrupted while the utilization management requirements (e.g., prior authorization, step therapy overrides, formulary exceptions, etc.) are addressed.
5. Issue: Many patients carefully review formularies and coverage restrictions prior to purchasing a health plan product in order to ensure they select coverage that best meets their medical and financial needs. Unanticipated changes to a formulary or coverage restriction throughout the plan year can negatively impact patients’ access to needed medical care and unfairly reduce the value patients receive for their paid premiums.
Principle: A drug or medical service that is removed from a plan’s formulary or is subject to new coverage restrictions after the beneficiary enrollment period has ended should be covered without restrictions for the duration of the benefit year.
6. Issue: Many conditions require ongoing treatment plans that benefit from strict adherence. Recurring prior authorizations requirements can lead to gaps in care delivery and threaten a patient’s health.
Principle: A prior authorization approval should be valid for the duration of the prescribed/ordered course of treatment.
7. Issue: Many utilization review entities employ step therapy protocols under which patients are required to first try and fail certain therapies before qualifying for coverage of other treatments. These programs can be particularly problematic for patients — such as those purchasing coverage on the individual marketplace — who change health insurance on an annual basis. Patients who change health plans are often required to disrupt their current treatment to retry previously failed therapeutic regimens to meet step therapy requirements for the new plan. Forcing patients to abandon effective treatment and repeat therapy that has already been proven ineffective under other plans’ step therapy protocols delays care and may result in negative health outcomes.
Principle: No utilization review entity should require patients to repeat step therapy protocols or retry therapies failed under other benefit plans before qualifying for coverage of a current effective therapy.
8. Issue: Prior authorization requirements and drug formulary changes can have a direct impact on patient care by creating a delay or altering the course of treatment. In order to ensure that patients and healthcare providers are fully informed while purchasing a product and/or making care decisions, utilization review entities need to be transparent about all coverage and formulary restrictions and the supporting clinical documentation needed to meet utilization management requirements.
Principle: Utilization review entities should publically disclose, in a searchable electronic format, patient-specific utilization management requirements, including prior authorization, step therapy, and formulary restrictions with patient cost-sharing information, applied to individual drugs and medical services. Such information should be accurate and current and include an effective date in order to be relied upon by providers and patients, including prospective patients engaged in the enrollment process. Additionally, utilization review entities should clearly communicate to prescribing/ordering providers what supporting documentation is needed to complete every prior authorization and step therapy override request.
9. Issue: Incorporation of accurate formulary data and prior authorization and step therapy requirements into EHRs is critical to ensure that providers have the requisite information at the point of care. When prescription claims are rejected at the pharmacy due to unmet prior authorization requirements, treatment may be delayed or completely abandoned, and additional administrative burdens are imposed on prescribing providers and pharmacies/pharmacists.
Principle: Utilization review entities should provide, and vendors should display, accurate, patient-specific and up-to-date formularies that include prior authorization and step therapy requirements in EHR systems for purposes that include e-prescribing.
10. Issue: Data are critical to evaluating the effectiveness, potential impact and costs of prior authorization processes on patients, providers, health insurers and the system as a whole; however, limited data are currently made publically available for research and analysis. Utilization review entities need to provide industry stakeholders with relevant data, which should be used to improve efficiency and timely access to clinically appropriate care.
Principle: Utilization review entities should make statistics regarding prior authorization approval and denial rates available on their website (or another publically available website) in a readily accessible format. The statistics shall include but are not limited to the following categories related to prior authorization requests:
- Healthcare provider type/specialty
- Medication, diagnostic test or procedure
- Indication
- Total annual prior authorization requests, approvals and denials
- Reasons for denial such as, but not limited to, medical necessity or incomplete prior authorization submission
- Denials overturned upon appeal
These data should inform efforts to refine and improve utilization management programs.
11. Issue: A planned course of treatment is the result of careful consideration and collaboration between patient and physician. A utilization review entity’s denial of a drug or medical service requires deviation from this course. In order to promote provider (physician practice, hospital and pharmacy) and patient understanding, and to ensure appropriate clinical decision-making, it is important that utilization review entities provide specific justification for prior authorization and step therapy override denials, indicate any covered alternative treatment and detail any available appeal options.
Principle: Utilization review entities should provide detailed explanations for prior authorization or step therapy override denials, including an indication of any missing information. All utilization review denials should include the clinical rationale for the adverse determination (e.g., national medical specialty society guidelines, peer-reviewed clinical literature, etc.), provide the plan’s covered alternative treatment and detail the provider’s appeal rights.
Timely access and administrative efficiency
12. Issue: The use of standardized electronic prior authorization transactions saves patients, providers and utilization review entities significant time and resources, and can speed up the care delivery process. In order to ensure that prior authorization is conducted efficiently for all stakeholders, utilization review entities need to complete all steps of utilization management processes through NCPDP SCRIPT ePA transactions for pharmacy benefits and the ASC X12N 278 Health Care Service Review Request for Review and Response transactions for medical services benefits. Proprietary health plan web-based portals do not represent efficient automation or true administrative simplification, as they require healthcare providers to manage unique logins/passwords for each plan and manually re-enter patient and clinical data into the portal.
Principle: A utilization review entity requiring healthcare providers to adhere to prior authorization protocols should accept and respond to prior authorization and step-therapy override requests exclusively through secure electronic transmissions using the standard electronic transactions for pharmacy and medical services benefits. Facsimile, proprietary payer web-based portals, telephone discussions and nonstandard electronic forms shall not be considered electronic transmissions.
13. Issue: Providers have encountered instances where utilization review entities deny payment for previously approved services or drugs based on criteria outside of the prior authorization review process (e.g., eligibility issues, medical policies, etc.). These unexpected payment denials create hardship for patients and additional administrative burdens for providers.
Principle: Eligibility and all other medical policy coverage determinations should be performed as part of the prior authorization process. Patients and physicians should be able to rely on an authorization as a commitment to coverage and payment of the corresponding claim.
14. Issue: Significant time and resources are devoted to completing prior authorization requirements to ensure that the patient will have the requisite coverage. If utilization review entities choose to use such programs, they need to honor their determinations to avoid misleading and further burdening patients and healthcare providers. Prior authorization must remain valid and coverage must be guaranteed for a sufficient period of time to allow patients to access the prescribed care. This is particularly important for medical procedures, which often must be scheduled and approved for coverage significantly in advance of the treatment date.
Principle: In order to allow sufficient time for care delivery, a utilization review entity should not revoke, limit, condition or restrict coverage for authorized care provided within 45 business days from the date authorization was received.
15. Issue: In order to ensure that patients have prompt access to care, utilization review entities need to make coverage determinations in a timely manner. Lengthy processing times for prior authorizations can delay necessary treatment, potentially creating pain and/or medical complications for patients.
Principle: If a utilization review entity requires prior authorization for non-urgent care, the entity should make a determination and notify the provider within 48 hours of obtaining all necessary information. For urgent care, the determination should be made within 24 hours of obtaining all necessary information.
16. Issue: When patients receive an adverse determination for care, the patient (or the physician on behalf of the patient) has the right to appeal the decision. The utilization review entity has a responsibility to ensure that the appeals process is fair and timely.
Principle: Should a provider determine the need for an expedited appeal, a decision on such an appeal should be communicated by the utilization review entity to the provider and patient within 24 hours. Providers and patients should be notified of decisions on all other appeals within 10 calendar days. All appeal decisions should be made by a provider who (a) is of the same specialty, and subspecialty whenever possible, as the prescribing/ordering provider and (b) was not involved in the initial adverse determination.
17. Issue: Prior authorization requires administrative steps in advance of the provision of medical care in order to ensure coverage. In emergency situations, a delay in care to complete administrative tasks related to prior authorization could have drastic medical consequences for patients.
Principle: Prior authorization should never be required for emergency care.
18. Issue: There is considerable variation between utilization review entities’ prior authorization criteria and requirements, as well as extensive use of proprietary forms. This lack of standardization is associated with significant administrative burdens for providers who must identify and comply with each entity’s unique requirements. Furthermore, any clinically based utilization management criteria should be similar—if not identical—across utilization review entities.
Principle: Utilization review entities are encouraged to standardize criteria across the industry to promote uniformity and reduce administrative burdens.
Alternatives and exemptions
19. Issue: Broadly applied prior authorization programs impose significant administrative burdens on all healthcare providers. For those providers with a clear history of appropriate resource utilization and high prior authorization approval rates, these burdens become especially unjustified.
Principle: Health plans should restrict utilization management programs to “outlier” providers whose prescribing or ordering patterns differ significantly from their peers after adjusting for patient mix and other relevant factors.
20. Issue: Prior authorization requirements are a burdensome way of confirming clinically appropriate care and managing utilization, adding administrative costs for all stakeholders across the healthcare system. Health plans should offer alternative, less costly options to serve the same functions.
Principle: Health plans should offer providers/practices at least one physician-driven, clinically-based alternative to prior authorization, such as but not limited to “gold-card” or “preferred provider” programs or attestation of use of appropriate-use criteria, clinical decision support systems or clinical pathways.
21. Issue: By sharing in the financial risk of resource allocation, providers engaged in new payment models are already incented to contain unnecessary costs, thus rendering prior authorization unnecessary.
Principle: A provider that contracts with a health plan to participate in a financial risk-sharing payment plan should be exempt from prior authorization and step-therapy requirements for services covered under the plan’s benefits.
MGMA and the coalition plan an aggressive advocacy campaign aimed at urging commercial health plans to seek opportunities to decrease their prior authorization requests, as well as simplify existing prior authorization processes. At the same time, the federal government will be encouraged to implement standards that facilitate automated prior authorization solutions.
In addition to MGMA, AMA, AAFP, ACC and AHA, the coalition includes the American Academy of Child and Adolescent Psychiatry, American Academy of Dermatology, American College of Rheumatology, American Pharmacists Association, American Society of Clinical Oncology, Arthritis Foundation, Colorado Medical Society, Medical Society of the State of New York, Minnesota Medical Association, North Carolina Medical Society, Ohio State Medical Association and Washington State Medical Association.
Explore Related Content
More Insight Articles
