Prior Authorization

Recently a managed care plan notified me that one of my patients should be taking daily aspirin for secondary prevention of heart disease. A quick review of the chart showed that we had discussed this before, and the patient was likely already taking aspirin. Sadly, his medication list did not accurately reflect this fact. “I’ll fix that,” I thought, and entered an order for aspirin 81 mg daily. I’m sure you can imagine the next thing that rolled out of our fax machine: A prior authorization request for a 126-year-old generic drug that costs less than $1 for 100 tablets.

How did we get to this point? In the halcyon days of yore, doctors wrote their orders, and somebody paid for it—no questions asked. Well, that is not exactly true. In the 1960s and earlier, most people paid for medical care out-of-pocket (or simply did without if they could not afford the treatment). It was the advent of Medicare, Medicaid, and the expansion of employer-sponsored health insurance that shifted the financial burden and stewardship obligations onto third-party payers. Because “he that pays the piper calls the tune,” payers created the prior authorization (PA) process to help control costs.

Unfortunately, what started as a pragmatic tool for controlling healthcare costs has morphed into a time-wasting administrative burden. According to a 2022 AMA survey, 94% of physicians reported that the PA process delayed starting care or interrupted the continuation of necessary care. One-third of those surveyed reported at least one serious patient adverse event related to prior authorization.

The prior authorization process often appears opaque and arbitrary. Physicians grapple with constantly evolving rules. Preferred medications change frequently, and physicians must play a guessing game when it comes to choosing a covered alternative. The rate of PA denials varies greatly across insurance plans, as does the probability of a successful appeal. The Office of Inspector General found that 82% of Medicare Advantage denials were overturned on appeal, leading one to wonder if anything is being accomplished by this byzantine endeavor—other than generating paperwork and delaying care.

The weight of the process drowns physicians in busy work and diverts staff from attending to patient care needs. It is estimated that physicians and their staff spend about 14 hours per week completing PA requests. This burden disproportionately affects primary care practices that typically have lower staffing levels and tighter operating margins.

As much as physicians groan under this system, it is patients who are harmed the most. A Kaiser Family Foundation survey in 2023 found that 16 percent of insured adults experienced problems related to prior authorization. Unfortunately, these problems unjustly affected patients with multiple health problems and those with diabetes and mental health conditions. Nearly one-third of people who reported problems with prior authorization said their health had declined as a direct result.

The prior authorization process has an even more insidious effect on the healthcare system. The frequent rejection of physician orders undermines patient confidence in our judgment. Patient denial notices are framed in language that implies that it is the physician’s fault for the lack of coverage. This creates an adversarial atmosphere that undermines collaborative decision-making, an essential component of optimal patient care.

Reforming the PA process has been a long-term goal for the AAFP. This advocacy led the Academy to develop specific goals to reduce the administrative burden of prior authorization. These recommendations include:

  • Creating a “gold card” system that exempts PA requirements for physicians in risk-sharing arrangements and those who have established a high approval rate.
  • Eliminating PA for services that have evidence-based standards of care; for inexpensive and generic drugs; and for services that are regularly approved after appeal.
  • Not requiring PA for patients with a chronic disease currently under effective management.
  • Standardizing the PA process across all payers, including the required use of a uniform electronic authorization interface.
  • Acknowledging that diagnosis alone should be sufficient evidence for establishing medical necessity.
  • Setting mandatory response times for payers.
  • Requiring payers to provide up-to-date formularies and specify which medications do not require prior authorization.

Last month CMS announced a long-awaited Final Rule on streamlining the prior authorization process. The rule applies to Medicare Advantage plans, Medicaid managed care plans, and qualified health plans. Although much of the rule will not be fully implemented until January 2026, it firmly establishes that the federal government recognizes the malign effects of the current prior authorization regime and expects it to change. As HHS Secretary Becerra stated when announcing the rule: “When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner.”

Prior authorization is a fact of life in a fee-for-service third-party payer health care system. It can’t be eliminated but it must be reformed. All our anger and frustration with the PA process will come to naught without effective advocacy by our Academy. By recognizing the detrimental impact of prior authorization and working together for effective solutions, we can navigate this labyrinth toward a healthcare system that truly prioritizes patient well-being.

This article was published in South Carolina Family Physician.