To learn about the CMS final rule, please read our piece, CMS Final Rule: A First Look for Payers and Providers.

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CMS Prior Authorization Final Rule: The Burden and Benefits

Recently, CMS finalized CMS-0057-F, “CMS Interoperability and Prior Authorization.” Among other requirements of the rule, health plans will be required to adjudicate urgent prior authorization requests within 72 hours and standard requests within seven days. Additionally, payers will be required to post on their website services that require prior authorization; provide statistics regarding approvals, denials, and overturns of those requests; and inform providers of the specific reasons a request is denied.

Very little of this is new. I’m a physician. I had a solo, private practice for many years and have experienced the burden of obtaining prior authorization. I was once accused by a colleague of, “going to the dark side.” However, I went to the “inside.” I will always be a physician and will continuously advocate for patients. I am not (I sincerely hope), a DINO: doctor in name only.

Prior Authorization exists for a reason. Regrettably, the reason is that many providers have not adhered to the evidence basis and best practice of medicine over the years but instead have maintained they know better, and no one should question their expertise. Just as regrettably, there are those who take advantage of the reimbursement system for their own gain. Half a dozen years ago, I was the chief medical officer for Medicare Advantage at one of the country’s largest payer organizations. While there, I was asked to respond to a request from both the U.S. Senate and the House Ways and Means Committee regarding the need for prior authorization. In my response I elaborated on a number of justifications.

Quality Care

The evidence basis for best practice care is well established for many conditions. High-value care can be identified — as well as low-value, wasteful care — for many conditions. Subjecting patients to low-value care exposes them to multiple risks, including unnecessary medical procedures (which are often invasive), delayed appropriate care, and additional and potentially unnecessary, harmful care subsequent to the known incidence of false positive results of procedures that were not appropriate in the first place. Ordering tests and procedures in the absence of critical evaluation and physical examination is not good medicine. What I have termed “just checking” medicine — the ordering of tests that will not impact decision making — needs to be eliminated. Prior authorization subjects requests for services to evidence-based criteria to determine if the request is the right treatment, at the right time, in the right setting, in the right amount, for the right patient. This is the definition of medical necessity I coined and on which I began to lecture in 2004. A prior authorization denial based on medical necessity doesn’t mean treatment is not necessary but rather a more appropriate treatment should be pursued. As we use machine learning to analyze more data that become available, medical necessity can have a more precise application.

Fiduciary Responsibility

Resources are not unlimited. Providers are in a better position than anyone to assure the appropriate performance of high-value care. Each of us has a role to play in healthcare when it comes to preventing wasteful care. Prior authorization establishes the guardrails for prevention of wasteful, low-value care.

Wise care utilization also protects patients’ financial resources. Limiting patient exposure to unnecessary co-insurance payments can go a long way to preventing healthcare bankruptcies.

Fraud, Waste, and Abuse

Regrettably, there are providers who seek the opportunity to take advantage of our care reimbursement system. I was published in the Wall Street Journal many years ago, using de-identified data to single out several providers whose claims’ histories evidenced fraud. Working with multiple Special Investigative Units (SIU) and Medicaid Fraud Control Units (MFCU), I’ve personally uncovered and recovered hundreds of millions of dollars in fraudulent and wasted healthcare dollars. The actors are few in number; the dollars are disproportionally large. Certain durable medical equipment/prosthetics, orthotics, and supplies are particularly susceptible to fraud, and prior authorization can be used as a first line defense.

Professionalism and Autonomy

Put very simply, if we as physicians and providers don’t monitor ourselves, someone else will.  We’re a highly educated group of professionals; we should act as such. In just a bit, I will discuss approvals, denials, and overturns. Academic rigor, honesty, and documentation are critical.

I’ve elaborated, wearing my healthcare system “hat.” Now, let’s examine prior authorization from the patient and provider standpoint.

Prior Authorization as a Burden

I could use other terms than “burden.”  I’ve been in practice; I know the “drill.”

Let me say simply: If as a physician (or other provider) you adhere to the best practice evidence, document it, and submit it with your request, you will get prior authorization approval, and you will receive it promptly. Period.

When initial adverse determinations (also known as “denials”) are appealed, on average, 50% are overturned because the appropriate supporting documentation and substantiation are submitted. Prior authorization is not an inflexible mandate; if rationale that substantiates the request is presented, the request can be considered in terms of the unique circumstances and approved. Payers gain absolutely nothing by creating member and provider abrasion. In fact, it negatively affects HEDIS/CAHPS and STAR ratings, both in terms of satisfaction and overturns by the CMS-designated Independent Review Entity.

No physician or patient wants to hear a health plan say, “We have 14 days to make a decision.” Frankly, the 7-day turnaround time for standard determinations is appropriate, reasonable, and necessary. Similarly, the 72-hour time frame for urgent or expedited requests is entirely necessary and has been the standard for years. This has downstream effects in terms of the Quality/STAR bonus and ultimately member enrollment and premium revenue. Additionally, providers typically recommend insurance plans that are easier to do business with. “Kicking the can down the road” by denying requests, only to approve them on appeal, is not a good business strategy.

As physicians, we’ve been taught if it isn’t documented, it didn’t happen. Submit the required documentation and prior authorization approval will follow. The statistics are correct: Approximately 80-90% of requests are ultimately approved when the necessary documentation is provided. But (and it is a BIG “but”) the documentation must be provided.

Turnaround Time

Providers are absolutely correct that turnaround time is an issue. It’s an issue that frustrates providers and patients alike. As I’ve said above, supply the necessary documentation, adhere to the evidence-based guidelines, and the request will “fly” through the system. However, providers need to be honest. Patients don’t know that when they are seen on Tuesday, the office may not submit the request until Friday. The actual processing time for their request may not be as long as it seems. Electronic prior authorization (ePA) systems will go a long way to resolving this issue as approvals will be obtained within half a minute of submission if the necessary documentation is available. Payers have every incentive to comply with this requirement to reduce the transactional expenses associated with processing requests, appeals, and submissions to the Independent Review Entity.

I try very diligently not to be a DINO. Prior authorization may seem to be a burden. However, if we are intellectually and academically honest, it’s less of a burden than many would protest. The American Board of Internal Medicine published the “Choosing Wisely” guidelines. Milliman published their “Waste Calculator.” Numerous specialty societies have socialized their professional guidelines. And virtually every single payer organization has published their “Prior Authorization List (PAL) and Clinical Practice Guidelines,” which are aligned with the evidence-based guidelines and authoritative publications. Prior authorization lists are typically reviewed quarterly with a lens to balance the reimbursement, transactional cost to the payer, and potential for abuse amongst other factors. It makes no sense to spend more to review a request than it does to pay it — as long as the potential for fraudulent requests and patient harm are kept in mind. The hierarchy of adjudication for essentially every government-sponsored health plan in the country, Medicare Advantage or Managed Medicaid, is as follows:

• Eligibility
• Benefits
• National Coverage Determination
• Local Coverage Determination
• FDA and Compendia
• Plan Policy
• Nationally accepted guidelines
• Peer-reviewed publications and authoritative literature

The criteria for prior authorization are not arbitrary and are no mystery. If providers are academically and intellectually honest, prior authorization should not be the impediment to timely and appropriate care that detractors insist it is.

Want to learn more about the final rule? Read our First Look for Payers and Providers.