In Today’s Prior Authorization System, “Coverage Is Not Access”

The panel said the prior authorization system was intended not just to make sure treatments are necessary but also to ensure that practices get paid; however, it needs a lot of work.

Prior authorization requirements in cancer care have become so burdensome that payers are essentially making coverage decisions one case at a time, according to a panelist who took part in the session, “Prior Authorization: How the Sausage Is Made,” which drew a large crowd Thursday during the Association of Community Cancer Centers’ 2022 Annual Meeting & Cancer Center Business Summit, held in Washington, DC.

Collectively, the panel moderated by Ira Klein, MD, MBA, FACP, vice president for medical affairs and payer relations, Tempus Labs, said the system needs a lot of work. Andrew Hertler, MD, chief medical officer for New Century Health, said the system was intended not just to make sure treatments are necessary but also to ensure that practices get paid.

But other panelists said prior authorization requires practices to make costly investments in personnel and software to navigate payer requirements, and they argued that the shift toward practices assuming risk should make this bureaucracy obsolete.

Prior authorization has become so broken in health care that, “coverage itself is not access,” said John Hennessy, MBA, CMPE, senior vice president and strategist, Valuate Heath Consultancy. He explained that prior authorization transactions happen all the time—but most are seamless, such as handing a credit card to a hotel clerk, who makes sure the bill can be paid before checking in a guest.

In health care, the process is both slow and unpredictable. “Prior authorization at some point was meant to protect people from low-value experiences,” Hennessy said. “When those transactions happen poorly, and they happen with great uncertainty, that value is lost.”

Being told “no” repeatedly tells a practitioner and a patient that the services or drugs they cannot have must be really good. Thus, by their behavior, payers are communicating the wrong message, Hennessey said. “So, that part of the process is broken,” he said.

Lalan Wilfong, MD, executive vice president, Value Based Care & Quality Programs, Texas Oncology, and vice president of payer relations and practice transformation at McKesson Specialty Health, said he’s heard all the payer claims that the next portal will be better—and it’s never true. But most of all, he said, prior authorization represents “inserting an entity into care that’s getting between you and the patient.”

“There’s got to be better solutions,” Wilfong said.

Klein, who previously worked for a payer, said there’s an appropriate role for prior authorization—if the payer is administering claims for a self-insured employer, for example, a stop-loss insurer must be informed before a claim gets too large. But when patients get a diagnosis of cancer and are then told that it’s not clear they can get the diagnostic testing or therapy their doctor recommends, that becomes upsetting.

Are there solutions to the current system?

Wilfong said he doesn’t see an issue with documenting the reasons for going off guidelines when that occurs in a small percentage of cases. Regional payers are more willing than national payers to be flexible in giving practices freedom to avoid prior authorization in exchange for assuming risk, he said. Texas has also created a “gold card” system, which exempts practices from prior authorization if 90% of their claims were approved in the previous 6-month period.

Hertler sees possibilities with artificial intelligence, which would use information from the electronic health record to speed decision-making. But when conversations are needed, Hertler said oncologists should get to speak with other oncologists at the payer level, instead of having to explain the need for a drug to a medical director with no background in cancer care.

“It’s a trust-and-verify system,” Wilfong said.

Hennessy said prior authorization shouldn’t be used as a hammer to replace the fact that some payers have poor pricing in some regions or at some hospitals.

Finally, Wilfong said, payers have to stop subjecting practices that have assumed risk to the misaligned incentives that are found across health care. He used an example currently roiling many oncologists: Anthem is telling practices they must use higher-cost rituximab instead of lower-cost biosimilars.

“Using prior authorization for formulary management is inappropriate,” he said. “We all know exactly what’s going on here.” Practices, he said, will be forced to carry more brands of rituximab and have more refrigerators, and nurses will have to know more formulations.

Hertler agreed, saying that rebates threaten to undermine the ability of practices to manage costs with biosimilars. “The rebates go one place, and someone else is paying the cost,” he said. “If I could eliminate rebates from the world, I would.”

He sees hope in approving “bundles” of care; for example, a patient with non–small cell lung cancer would be approved up front for diagnostic testing, scans at designated intervals, and a course of treatment.

Panelists discussed abuses with step edits, and Klein sees challenges in the diagnostic space.

“It’s not about which is the best product, but which has the best rebate for the payer,” Hennessy said. “If someone takes offense, I’m sorry, but that’s what’s going on. One of the challenges is, as we try as providers of care to take care of patients, to simplify this process, sometimes things outside of our control make it a lot more complex. And prior authorization, in some cases, becomes almost a contract negotiation on a patient-by-patient basis.”