Increased Scrutiny of Prior Authorization: Are Payers Fully to Blame, and Can AI Improve the Process?

Prior authorization (PA) is being scrutinized closely, as evidenced by recent media reports, government proposals and actions, and pullback from payers.

The New York Times recently published a video that included interviews with 50 physicians and patients sharing their negative experiences with PA.¹ Jessica Korman, MD, a Bethesda, MD gastroenterologist, told the Times that 85% of the drug prescriptions she writes are subject to PA. “We have four full-time employees whose sole focus is to obtain prior authorization for medications to treat Crohn’s disease and ulcerative colitis.”

A recent assessment of 5000 medical codes estimated that PA costs provider groups an average of $20 to $30 per submission.² Moreover, a 2023 Kaiser Family Foundation analysis found that more than 35 million PA requests were submitted to Medicare Advantage in 2021.³ Of those, 2 million were fully or partially denied, and just 11% were appealed. More than 80% of the appeals were fully or partially overturned. The appeals typically occur after insurance-mandated peer-to-peer conversations. Shikha Jain, MD, a medical oncologist at the University of Illinois Cancer Center, told The New York Times she is frustrated by the need to have such conversations 5 to 10 times a day. Peers sometimes “couldn’t pronounce the names of the drugs I was trying to prescribe,” she said.

Health insurers such as Cigna Healthcare maintain PAs “play an important role in keeping patients safe, improving health outcomes and care experiences, and reducing unnecessary costs.”⁴ Jeff Hankoff, MD, a medical officer at CIGNA, noted that for CIGNA members, less than 4% of services require PA. “Unnecessary tests and treatments result in significant costs for health plans and can be expensive for patients…. Suppose there are clinically equivalent treatment options or sites of care. In that case, [PA] helps ensure…the most cost-effective treatment [is selected] for the patient’s condition, based on that individual’s coverage.” He added there are times when PA results in more expensive treatments if such interventions are proven to decrease costs downstream.

Caroline Forrester, PharmD, a clinical specialist at MedImpact, a pharmacy benefit manager (PBM), addressed PA’s role in determining appropriate drug therapy. “These drugs may be preferred because of cost differences, efficacy and/or safety differences, rebate programs, or alignment with evidence-based treatment guidelines.”⁵

Critics of PA argue that rebate programs play an outsized role in the process. As the Times put it, insurers and PBMs “weaponize this mundane process in order to control doctors and inflate their profits.”1 Payers are responding to the criticism. In August 2023, Cigna announced that it was removing one-fourth of its medical services–representing 600 medical codes–from PA/precertification requirements.⁶ Five months before that, United Healthcare said it was removing 20% of current PAs.⁷

The federal government and some states are also pushing for more efficiency. HR 4968 would require Medicare Advantage insurers to offer gold card programs that enable qualified providers to skip PA.⁸ They are exempted for a year “if the provider had at least 90% of prior authorization requests approved the preceding year.” The bill, which was introduced in 2023, is stuck in Washington’s political gridlock. But its mere existence seems to be spurring action. United Healthcare plans to launch a gold card program in 2024.⁹ According to The New York Times video, 5 states–Arkansas, Louisiana, Michigan, Texas, and West Virginia–created gold card programs.¹

While payers are often cited as culprits, other factors are at play. “Approval of novel therapies has created increased cost and clinical appropriateness triggers for PA,” F Randy Vogenberg, PhD, RPh, principal, Institute for Integrated Healthcare, Greenville, SC, explained in an interview with First Report Managed Care. “And it’s not likely to subside—affecting access to and optimal outcomes from novel therapies.”

Some informatics authorities believe that artificial intelligence (AI) could improve PA. “Combining modern approaches for accessing and exchanging existing electronic health data with AI methods tailored to reflect the judgments of expert panels…could create a just and efficient process that serves the interests of society as a whole,”¹⁰ experts reported in 2023. Provider-submitted data would be subjected to deep learning AI models previously trained to simulate consensus expert judgment and subjected to public-facing review. The authors acknowledged the potential for bias and believe a gradual rollout would be required.

It makes sense to Dr Vogenberg. “AI-driven adjudication will close the gap [between PA request and approval] in the next few years.”

References

1. ‘What’s my life worth?’ the big business of denying medical care. The New York Times. Published March 14, 2024. Accessed March 22, 2024. https://www.nytimes.com/2024/03/14/opinion/health-insurance-prior-authorization.html
2. Sahni NR, Gupta P, Peterson M, Cutler DM. Active steps to reduce administrative spending associated with financial transactions in US health care. Health Affairs Scholar. 2023;1(5). doi:10.1093/haschl/qxad053
3. Biniek JF, Sroczynski N. Over 35 million prior authorization requests were submitted to Medicare Advantage plans in 2021. KFF News. February 2, 2023. Accessed March 23, 2024. https://www.kff.org/medicare/issue-brief/over-35-million-prior-authorization-requests-were-submitted-to-medicare-advantage-plans-in-2021/
4. Prior authorizations help keep patients safe, improve health, and make care more affordable. Cigna Healthcare. Accessed March 29, 2024. https://newsroom.cigna.com/prior-authorization-keep-patients-safe-improve-health-affordability
5. Forrester C. Benefits of prior authorizations. J Manag Care Spec Pharm. 2020; 26(7):820-822. doi:10.18553/jmcp.2020.26.7.820
6. Cigna Healthcare removes 25 percent of medical services from prior authorization, simplifying the care experience for customers and clinicians. Cigna Healthcare. Published August 24, 2023. Accessed March 29, 2024. https://newsroom.cigna.com/2023-08-24-Cigna-Healthcare-Removes-25-Percent-of-Medical-Services-From-Prior-Authorization,-Simplifying-the-Care-Experience-for-Customers-and-Clinicians
7. Easing the prior authorization journey. United Healthcare. Published March 29, 2023. Accessed March 29, 2024. https://www.uhc.com/news-articles/newsroom/easing-prior-authorizations
8. Burgess and Gonzalez work to streamline quality care for American patients. News release. US Congressman Michael C. Burgess, MD (26 District, Texas). Published July 31, 2023. Accessed March 29, 2024. https://burgess.house.gov/news/documentsingle.aspx?DocumentID=403783
9. Prior authorization reduction equals nearly 20 percent of overall volume. United Healthcare. Published August 1, 2023. Accessed March 29, 2024. https://www.uhcprovider.com/en/resource-library/news/2023/medical-prior-auth-code-reduction-august.html
10. Lenert L, Lane S, Wehbe R. Could an artificial intelligence approach to prior authorization be more human? J Am Med Inform Assoc. 2023;30(5):989–994. doi:10.1093/jamia/ocad016