- CMS should continue its prior authorization demonstration projects, currently on pause or scheduled to end this year, or risk “missed opportunities for achieving its stated goal of reducing costs and realizing program savings,” according to a Government Accountability Office report released Monday.
- The handful of Medicare prior authorization programs have saved an estimated $1.1 billion to $1.9 billion through March 2017, the report found. However, the GAO acknowledged it is difficult to separate the projects’ savings from other CMS cost-cutting efforts.
- GAO said many providers and suppliers found prior authorization to be an “effective tool to reduce unnecessary utilization and improper payments,” but did struggle with documentation requirements.
Payers continue to experiment with prior authorization policies, but providers have pushed back strongly. While both sides generally approve of reducing unneeded services, doctors say prior authorization tends to be overly burdensome.
More than nine in 10 doctors sampled in a recent American Medical Association survey said prior authorizations hurt clinical outcomes, and 84% said their administrative burdens were either high or extremely high. Clinics deal with an average of about 30 prior authorization requests a week and spend an average of 14.6 hours a week working on them, the survey found.
Doctors also said they were seeing more requests, as payers look at multiple avenues for cutting the country’s notoriously high healthcare costs. Anthem, which has come under fire for its aggressive tactics, has said it won’t pay for MRI or CT scans at hospitals on an outpatient basis without prior authorization. Earlier this year, Aetna’s programs were scrutinized after a former medical director for the payer said he didn't review patient medical records when deciding on authorizations.
Despite the struggles, the potential for savings and reduction in unnecessary treatment mean prior authorization isn't going away. AMA, along with the American Hospital Association and America’s Health Insurance Plans, is making an effort to work with payers to develop industry best practices.
The Medicare prior authorization demonstrations, which began in September 2012, are relatively small-scale. Four fixed-length programs covered repetitive scheduled non-emergency ambulance services, home health services, certain mobility devices and non-emergency hyperbaric oxygen therapy. There is also a permanent program for some durable medical equipment, prosthetics, orthotics and supplies.
HHS “neither agreed nor disagreed” with GAO’s recommendations but continues to evaluate program results. The agency has looked at extending prior authorization to other items, including hospital beds and oxygen concentrators, according to the report.