Healthcare providers must often obtain approval, referred to as pre-authorization or prior authorization, from the insurance company before certain treatments, procedures, or medications will be covered. Health insurance companies say that this approval is necessary to ensure that the requested service is medically necessary and appropriate based on the patient's condition. Typically, inpatient hospitalization, most surgical procedures (inpatient and outpatient), imaging (PET Scans, MRI’s, CT Scans), and many medications require pre-authorization. Ostensibly, prior authorizations act as a check to prevent unnecessary or inappropriate healthcare services, helping to manage costs for both patients and insurance companies.
However, obtaining pre-authorization can be a major barrier to accessing healthcare. The process can be time consuming and cumbersome, requiring healthcare providers to submit detailed documentation and justification for the requested service. Delays in obtaining pre-authorization can lead to delayed or denied care, impact patient outcomes, and cause frustration for both patients and healthcare providers. Additionally, the criteria used by insurance companies to approve or deny pre-authorization do not always align with the best interests of patients, thereby creating further challenges in navigating the healthcare system.
Everyone should be familiar with their insurance policy’s requirements concerning pre-authorization. Insurers have different procedures and medications that are subject to this possible roadblock. Human Health Advocates recommends that everyone establish an account with their health insurer’s member portal. Typically, those services, medications, and medical equipment that require pre-authorization are listed online and accessible through your portal. This is also a good tool for monitoring claims and checking benefits. It is important to verify that, when required, pre-authorization is obtained before undergoing a treatment or purchasing medication or medical equipment. One should insist on seeing a copy of the pre-authorization, if possible.
Insurance companies and many providers have contractually shifted the burden of obtaining a pre-authorization to the patient. This is counterpoint to the reality of obtaining pre-authorization. It is typically necessary to establish medical necessity in the request for pre-authorization. The CPT codes for procedures or the codes for drugs are in the possession of our doctors and, without diagnosis and procedure codes, the request will be denied. Patients are typically not in possession of the necessary information. However, if your provider’s office fails to correctly submit these requests in a timely manner, the request will be denied. Even the smallest error (incorrect code, wrong number of days in hospital, or which type of medications your doctor requests) in the pre-authorization might result in denial or even non-payment. Best practices suggest that one verify that the pre-authorization has been submitted and approved rather than counting on administrative personnel’s assurances.
Medicare Advantage plans frequently require prior authorizations for services or prescription medication. “More than 35 million prior authorization requests were submitted to Medicare Advantage insurers” on behalf of patients in 2021 (Biniek & Sroczynski, 2023). Physicians say that prior authorizations adversely affect patients by acting as a roadblock to receiving care in a timely manner, Sometimes, this results in patients abandoning treatment altogether, and has even led to a life-threatening event (American Medical Association & American Medical Association, 2023). However, Medicare Advantage plans are falling out of favor with many providers, due to excessive denials and slow/low payments. More to follow in Part 2
Sources
American Medical Association & American Medical Association. (2023, March 29). 1 in 3 doctors has seen prior auth lead to serious adverse event. American Medical Association. https://www.ama-assn.org/practice-management/prior-authorization/1-3-doctors-has-seen-prior-auth-lead-serious-adverse-event
Biniek, J. F., & Sroczynski, N. (2023, February 3). Over 35 million prior authorization requests were submitted to Medicare Advantage Plans in 2021 | KFF. KFF. https://www.kff.org/medicare/issue-brief/over-35-million-prior-authorization-requests-were-submitted-to-medicare-advantage-plans-in-2021/#:~:text=Just%20over%202%20million%20prior,or%20in%20part%20in%202021.