In this three-part series, we will provide an overview of what insurance-driven prior authorization is, then share input from the provider community on its impact, and finally describe the experiences of patients who have attempted to obtain authorization ordered/requested by their primary care physician.
By the end of this series, you will have a clear overview of the challenges that have increased over the past few years and how they are affecting physicians and patients.
What is a “prior authorization” and how does it work when getting medical care?
As the country struggles to address continually rising overall health care costs, the expanded use of prior authorization has become a powerful tool used by insurers.
How does it work and why is it used? One common theme in healthcare is overutilization of services. When an insurance company denies a prior authorization, this is sometimes called a “not medically necessary service.” This is confusing for patients who have a health problem, visit a doctor, the doctor determines that diagnostic work is needed to confirm the diagnosis, and the insurance company denies the request for the requested service (i.e. refuses to pay for the requested service). The process of “prior authorization” is the most common definition of the process by which insurance plans only approve “high value care.” Sometimes the requested service is denied, but the insurance company recommends something different based on questionable knowledge of the patient’s history. It couldn’t be more confusing for patients. The doctor thinks it’s necessary. The test is available in the patient’s network. But the insurance plan denies it. Is this “insurance-directed care or physician-directed care?” What happens next?
Anyone else reading this…
Prior authorization is a tool insurance plans use to determine whether a test, chemotherapy drug, inpatient or outpatient procedure, or nearly any service ordered, meets the plan’s definition of “value-based or medically necessary care.”
Prior authorizations can be a concern for the medical community not only because they can cause significant delays in treating a patient’s condition, but also because they can lead to ongoing dialogue with the insurance plan to “negotiate” coverage, change to a different test, tell the patient to pay out of pocket because the insurance company will not approve the service, appeal the insurance plan’s decision (what patient would know how to do this?), or abandon the test/procedure.
Often, patients hear their doctor say, “I’m ordering an MRI to confirm the damage, but I have to wait to see if my insurance will cover it,” or, “I really need a vitamin D test to rule out an unexplained cause of muscle pain, but I know my insurance won’t cover it.” Patients may wonder, “What if the insurance company refuses? Isn’t what the doctor is ordering ‘medically necessary’?” Medical terminology can be confusing.
Idea: If you need a medical test/procedure/specialty drug for your health, you are the person who has your best interest in mind. Your doctor/healthcare provider is best prepared to give your insurance plan the medical information it needs during the pre-authorization process. But if your plan denies the treatment, call your insurance plan right away. You can usually find a customer service number on your insurance card. This should be your first call, because it may take a bit of “pushing” to get to the right person to discuss the denial. Ask why it was not approved, what you can do to get it approved, and what other options you have.
Day Egusquiza is president and founder of an Idaho-based family foundation, Patient Financial Navigator Foundation Inc. All past articles and training materials can be found on the Patient Financial Navigator Foundation webpage. PFNFinc.comWe are an Idaho-based family foundation founded in 2017. For more information, please contact us at 208 423 9036. (If you have a topic for Healthcare Buzz, please send it to [email protected].)
