Prior Authorization: Insurers’ Delight, Physicians’ Plight, and Patients’ Pain

UnitedHealthcare’s new rule requiring prior authorization for surveillance and diagnostic endoscopy was to go into effect on June 1st. But, at the final hour, United ditched the rule. Instead, United will require an Advance Notification process to determine member coverage based on medical necessity. And here I was celebrating how lucky I was to get my routine surveillance colonoscopy on May 31st, right in the nick of time!

Anyway, I wrote this article on May 30th, assuming the rule would go into effect. Instead of throwing the article out, I just updated it with the new information.

In this article, I’ll discuss UnitedHealthcare’s reasons for initially implementing the prior authorization rule for non-screening endoscopy, highlight gastroenterologists’ argument against this new rule, and add my insights on the prior authorization process.

UnitedHealthcare’s Argument for New Prior Authorization Rule

UnitedHealthcare announced a new rule in March requiring prior authorizations for non-screening colonoscopies. The new rule, which was to start on June 1st, included some of the following procedures:

• Esophagogastroduodenoscopies (EGD)

• Capsule endoscopies

• Diagnostic colonoscopies

• Surveillance colonoscopies

Said another way, healthy patients without gastrointestinal disease wouldn’t need prior authorization for their recommended preventive colonoscopy screening for colorectal cancer, but every other patient would need prior authorization. So, if a patient complains of dark, black stool, for two weeks and lightheadedness, concerning for an upper GI bleed, the physician would need to obtain prior authorization for an EGD before performing the procedure to diagnose an active upper GI bleeding.

United supported their new rule with evidence regarding the overuse of some endoscopic procedures not in line with current guidelines. One study examining how well gastroenterologists follow guidelines for monitoring Barrett’s esophagus found that some patients without Barrett’s esophagus received unnecessary surveillance, while others with Barrett’s esophagus were monitored too frequently.

United cited a study on adherence to guidelines for monitoring colon polyps. The researchers of the study found that overall compliance two years after updated guidelines were published was low, with only 48.9% of the ~500 colonoscopies analyzed adhering to the recommended surveillance intervals. However, compliance varied based on the risk of the polyp: low-risk adenoma has 8.3% compliance compared to 88.3% compliance for high-risk adenoma. Also note the small sample size.

When physician societies pressed United to show their data supporting their claim of unnecessary endoscopy procedures, United didn’t budge.

Due to pressure from physician societies and the lack of supporting data from United regarding overutilization of non-screening endoscopies, United decided to abandon the prior authorization rule at the last minute. Instead, United will implement an Advance Notification process for non-screening and non-emergent endoscopies (colonoscopy, EGD, capsule).

This Advance Notification process won’t deny a medically necessary procedure even if it doesn’t adhere with clinical guidelines. But, United will “provide you the opportunity to engage in a comprehensive peer-to-peer discussion with a board-certified gastroenterologist around clinical guidelines.” (Did you just role your eyes? Because I did…) The Advance Notification process is meant to expedite United’s Gold Card Program (launch 2024), which will decrease prior authorization requirements for physicians with an excellent track record of following clinical guidelines.

Gastroenterologists’ Argument Against New Prior Authorization Rule

Gastroenterologists’ argument against United’s prior authorization rule came down to two things:

1. Patient harm: prior authorization requirements for non-screening endoscopies would simply delay care or, at worse, prevent care if the endoscopy claim is denied. Screening colonoscopies are recommended to start at age 45 or 50. Colorectal cancer, however, is the leading cause of cancer death in Americans under 50. So, if a 40 year old patient presents to the office with signs of colorectal cancer, United’s rule would have required prior authorization before performing a colonoscopy, which would have delayed care. In fact, 94% of physicians surveyed by the American Medical Association reported prior authorization for treatments delayed access to medically necessary care and 25% said prior authorization leads to treatment abandonment.

2. Increased physician burden: the prior authorization rule would have added even more hurdles to the already frustrating process of getting insurers to approve coverage for needed procedures. The burden of this prior authorization rule would have negatively impacted physicians productivity and affected the way they deliver care. It would have (and does) erode the autonomy physicians have to tailor care based on unique clinical picture as opposed to relying on generalized guidelines (with varying degrees of evidence) alone. The rule would have allowed United to dictate how care should be done based on their own guidelines. Last I checked, United didn’t go through medical school, residency, and fellowship.

Dash’s Dissection

United’s latest rule, even if not implemented, highlights a much larger problem in the health insurance space where insurers essentially practice medicine without any medical training by denying or approving medically necessary treatments and procedures.

The prior authorization process is timely and costly, with practices and health systems creating separate departments solely to deal with prior authorization requests and appeals. Dr. Eric Bricker estimates that for United Healthcare alone, 13+ million hours are spent by physicians and office staff on prior authorization. This is just for one insurer.

Yes, the intention of prior authorization is to control spending by controlling overutilization of treatments and procedures. And we—the U.S. healthcare system—need to significantly control costs. The irony, however, is prior authorization increases administration costs! Again, whole departments are created to deal with prior authorization. This is their only job. In Dr. Bricker’s video, he suggests that in negotiations, insurers should agree to drop prior authorization as long as the hospital drops their prices (which are high to begin with partly to account for administrative costs!).

But it won’t ever happen.

It won’t happen because the Affordable Care Act mandates insurers maintain a medical loss ratio of no less than 80-85%. This means 80-85% of insurers’ revenue must be spent on claims before it can be spent on other expenses like marketing. Prior authorization and denials are the way insurers can tightly control their medical loss ratios. For example, if care utilization is down as it was during the height of the pandemic when elective procedures were cancelled, insurers would need to spend more money on claims (e.g. approving treatments and procedures) to maintain that 80-85% medical loss ratio. But, if care utilization is high, insurers would be more stringent with their prior authorizations and denials.

The unfortunate fact (for physicians and patients) about United’s rule on endoscopies is this: they created the rule because they could. No one is/was stopping them. Had United followed through with the rule, it may have invited other insurers to do the same.

There are two ways to approach improving prior authorization: create a bandaid solution or address the root cause. A bandaid solution is adding more and more administrative staff to deal with prior authorization and ease the burden for physicians and patients. This is expensive and will cause an endless cycle of hospitals increasing their prices and insurers denying those expensive treatments or procedures. The root cause solution would include policy changes or models like direct primary care where insurers are cut out from the reimbursement process.

In summary, UnitedHealthcare initially announced a prior authorization rule for non-screening endoscopies, which was later abandoned in favor of an Advance Notification process. While UnitedHealthcare cited evidence of overutilization, concerns were raised by gastroenterologists about patient harm and increased physician burden. The prior authorization system, although intended to control costs, has become burdensome and costly. Addressing the root cause of the problem, such as policy changes or alternative reimbursement models, may be necessary for long-term improvements in prior authorization processes.

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