AMA survey indicates prior authorization wreaks havoc on patient care

Introduction

In this article we are going to discuss what prior authorization is as it relates to health insurance and why it matters and how to improve patient care and reduce costs with or without prior authorization.

What is Prior Authorization?

Prior authorization is a cost-control tactic requiring physicians or practices to obtain approval from a health insurance company before a treatment qualifies for coverage.

Why Does it Matter?

We will demonstrate how prior authorization affects patient care, timely, or any, treatments and workforce productivity at the hospital and practice.  

The Problem

The American Medical Association issued a press release recently that is quoted almost verbatim below and states

“Access to patient-centered care continues to suffer as health insurance companies impose prior authorization barriers on necessary care and substitute corporate policy for clinical decisions that are in patients’ best interest. Turmoil caused by excessive authorization controls leads to serious or life-threatening events for patients, unnecessary waste, and physician burnout, according to the latest survey from the American Medical Association (AMA).”

The delay in patient care alone is dangerous or sometimes deadly to the patient.  AMA President Bruce A. Scott wrote in his viewpoint

“Payers erect roadblocks and hurdles allegedly designed to save money for the health system and protect precious resources, but when patients and their doctors face care delays—or even give up and abandon necessary care—the result can actually be increased overall costs when worsening health conditions force patients to seek urgent or emergency treatment. Our patients are caught in the middle, twisting in the wind, while physicians fight for them, often with fax machines as our only available weapon.”

Measurable Outcomes

The AMA survey results illustrate that delayed and disrupted care has become a predictable and miserable part of the patient experience as widespread use of prior authorization programs by the health insurance industry continues to negatively impact the delivery of necessary medical treatments, jeopardize quality care, and harm patients.

• Patient Harm
  Nearly one in four physicians (24%) reported that prior authorization has led to a serious adverse event for a patient in their care, including hospitalization, permanent impairment, or death.
• Bad Outcomes
  More than nine in 10 physicians (93%) reported that prior authorization has a negative impact on patient clinical outcomes.
• Delayed Care
  More than nine in 10 physicians (94%) reported that prior authorization delays access to necessary care.
• Disrupted Care
  More than three-fourths of physicians (78%) reported that patients abandon treatment due to authorization struggles with health insurers.
• Lost Workforce Productivity
  More than half of physicians (53%) who cared for patients in the workforce reported that prior authorizations had impeded a patient’s job performance.

Further, physicians reported high administrative burdens across major health plans when complying with prior authorization requirements and appeal procedures, forcing time and effort to be redirected away from patient care. The burdensome administrative duties consume scarce resources and significantly contribute to physician burnout.

• Added Burden
  Physicians reported completing an average of 43 prior authorizations per week, and more than a quarter (27%) of physicians reported that prior authorization requests are often or always denied.
• Diverted Time and Resources
  Prior authorization requirements for a single physician consume the equivalent of 12 hours of physician and staff time each week, and more than a third (35%) of physicians employ staff members to work exclusively on tasks associated with prior authorization.
• Burnout Factor
  More than nine in 10 physicians (95%) reported that prior authorization somewhat or significantly increases physician burnout.

Not only does prior authorization negatively impact patient-centered care and adds to crushing administrative burdens on physicians, the AMA survey found it also adds significant waste and cost to the entire health system.

• Wasted Health Resources
  More than four in five physicians (87%) reported that prior authorization requirements lead to higher overall utilization of health care resources, resulting in unnecessary waste rather than cost-savings. More specifically, physicians reported resources were diverted to ineffective initial treatments (69%), additional office visits (68%), urgent or emergency care (42%), and hospitalizations (29%) due to prior authorization requirements.

Despite mounting evidence that prior authorizations for drugs and medical services can be a hazardous and burdensome obstacle to patient-centered care, the AMA survey found that the health insurer industry continues to show ineffectual follow-through on five key reforms that were mutually agreed to in January 2018 by the AMA and other national organizations representing pharmacists, medical groups, hospitals and health insurers.

Given the health insurance industry’s lack of progress toward voluntarily expediting comprehensive prior authorization reforms, the AMA has taken a leading role in advocating for state-level prior authorization reforms and strongly supports bipartisan and bicameral federal legislation to reform prior authorization procedures within Medicare Advantage—the Improving Seniors’ Timely Access to Care Act of 2024.

Dr. Scott continues

“The time is now for Congress to adopt reintroduced prior authorization reform legislation that prioritizes patients’ access to care, reduces administrative burdens on physicians, and preserves resources for high-quality care, because insurers will not change their ways despite their rhetoric, lawmakers have an important opportunity to rein in excessive prior authorization requirements and unnecessary administrative obstacles between Medicare Advantage patients and evidence-based treatments.”

The AMA continues to work on every front to right-size prior authorization programs so that physicians can focus on patients rather than administrative burdens. Patients, physicians, and employers can learn more about reform efforts and share personal experiences with prior authorization at FixPriorAuth.org.

The Solution

For those of you who follow us, you know exactly where we are going with this.  Just like banks, insurance companies don’t DO anything.  You pay your premium; they pay your medical expenses.  Anything outside of this is malicious and designed solely to avoid fulfilling the contractual obligation to pay for your medical care.  All the big buildings, all the equipment and energy and most of all people that you see working for an insurance company are there to simply defraud the consumer.  Oops, I mean avoid paying your medical treatments.

Here is what we do: We create a new kind of insurance company that provides its own medical records system (Electronic Medical Record, or EMR) to all the practices and all the hospitals of the world, free of charge.  We then assign payments to all procedures in the EMR.  When a physician documents a procedure, the insurance company sees the new claim and pays it.  This eliminates all of the big buildings, equipment and people that cost YOU money and avoids medical coding and billing at the practice, cutting approximately 47% out of the cost of YOUR health insurance.  How we got to 47% is out of scope for this article, but we have detailed the calculation before on this very platform.  It should be in a list here.  

Conclusions

We and the AMA have documented the malicious greed of your health insurance company and shown how to improve patient care and reduce costs without prior authorization.

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