The push to revamp prior authorization practices has picked up steam recently.
Some physicians and other healthcare leaders have long been outspoken about the issues created by strict prior authorization rules, and the practice has been found to have negative effects on patient care. A 2022 survey by the American Medical Association found that 33% of physicians said delays in processing a prior authorization request led to a serious adverse event for a patient. The same survey found that physicians and their staff spend 14 hours a week, or almost two business days, on prior authorizations.
Further, the administrative costs of healthcare, including prior authorizations, are estimated to make up 20% to 34% of healthcare expenditures, according to a report from the American Enterprise Institute, a public policy think tank.
Here are the latest updates regarding prior authorization policy from payers, individual states and the U.S. as a whole:
Insurers updating policies
Last year, payers including Humana, Cigna Healthcare and UnitedHealthcare loosened their prior authorization requirements. Cigna cut more than 600 codes from its list of services requiring prior authorization — trimming its list by nearly 25%.
Statewide movements
States have begun to take prior authorization reform into their own hands. According to the AMA, 17 states have adopted comprehensive policy updates, and there are more than 70 bills of various types in more than 28 state legislatures being introduced this year.
Nine states — Arkansas, Louisiana, Montana, New Jersey, Rhode Island, Tennessee, Texas, Washington, West Virginia — and Washington, D.C., updated laws or passed new ones in 2023 that shifted prior authorization rules, according to a March 8 article posted on the AMA's website.
Other states, including California and Ohio, have legislation pending that would work to tackle these issues.
Some solutions that have been implemented or proposed include prohibiting retroactive denials in cases where care is preauthorized, requiring physicians to make determinations and making authorizations last for at least a year even if a patient's dosage changes.
Nationwide changes
At the beginning of the year, CMS updated its interoperability and prior authorization final rule at the beginning of the year. The rule requires payers to implement features including adding information about prior authorizations to their patient access interfaces and creating provider access interfaces to share patient data, claims and prior authorization information.
Plans are now required to support electronic prior authorization processes by 2027, include the reasoning behind any prior authorization denials, and require all decisions to be made within 72 hours for urgent requests or seven days for standard requests.