A debate between Vermont health insurers and physicians over the need for prior medical authorizations is picking up steam in the Statehouse.
Insurers require this extra review before they’ll authorize coverage of certain treatments or medications.
Two parallel bills in the House (link) and Senate (link) seek to make the prior authorization process more transparent. The legislation proposes measures such as requiring insurers to publicly post data and clinical criteria for such decisions; to involve at least one physician in the review process; and give the state the power to penalize insurers $500 for failing to comply with the law.
Although the current legislation is considered a consumer protection bill, there’s a strong physician desire to get rid of prior authorizations altogether.
“Speaking on behalf of my membership, we would love to see prior authorization go away,” said Paul Harrington, who directs the Vermont Medical Society and spoke to the House Health Care Committee. “I can understand why under a fee-for-service reimbursement system there are those who feel you need prior authorizations. I don’t think fee-for-service is going to go away in my lifetime.”
The state’s physician association recently polled about 90 group practices for their take on the prior authorization process. The survey found that:
• 81 percent of practices say it’s “fairly or extremely difficult to determine what requires a” prior authorization.
• 94 percent find the prior authorization process “has a very or somewhat negative effect on their ability to treat patients.”
• 56 percent refer patients to specialists to avoid the process.
• 47 percent say their offices spend more than 11 hours a week dealing with this insurance review.
While physicians want relief from this administrative burden, insurers say they want to ensure that there are proper checks on the system, since they bear the financial risk.
Leigh Tofferi, who lobbies for Blue Cross Blue Shield of Vermont, told VTDigger that the state’s largest insurance provider is aware that prior authorizations are an “imposition on physicians,” but the current fee-for-service payment system doesn’t encourage the best or most cost-effective practices.
“When you get to the point where providers are sharing risk with the insurers, then the need for insurance companies to do the prior authorizations is alleviated somewhat,” he said.
There’s also what’s called “a sentinel effect,” Tofferi added.
“If people know prior authorizations are required, that has an effect on people’s behavior and the way they think about things,” he said. “If there’s no prior authorization, and people know there’s no prior authorization, people won’t pay attention to whether there’s a better or cheaper alternative.”
Tofferi and Susan Gretkowski, who lobbies for MVP Health Care, provided several examples of when their companies require such review. Breast reconstruction or a tummy tuck, for instance, can be necessary for medical purposes. But such operations are often undergone for cosmetic reasons, which aren’t covered by the providers, they said.
MVP requires certain surgeries to be done in high-volume hospitals, and Blue Cross won’t pay for a $300,000 a year drug, which is used to treat one variation of cystic fibrosis, if the drug is being used to treat a different variant.
Rep. George Till, D-Jericho, and Allan Ramsay of the Green Mountain Care Board – both physicians – say that they understand where insurance companies are coming from, but that there’s no evidence to prove the effectiveness of prior authorizations.
“We don’t know that these add any benefit, but we don’t know that they don’t,” Till said. ““We have perverse incentives within the economics of medicine right now, and prior authorizations are a way to try to counterbalance that. So we do recognize there’s a tension here.”
Although Vermont insurance companies provided the state with claim denial rates last month , they didn’t include prior authorization denials.
Till said that removing the administrative burden of prior authorizations would keep doctors in the state and attract doctors from across the country.
To test this notion, Ramsay is proposing a pilot project that does away with the prior authorization process for a sample of physicians. It would allow the state to analyze how prior authorizations affect the quality of care and cost savings.
“I’d like the things that we spend money on in our system to be based on improving the value and the only way I can identify that is if there is evidence to support what they’re doing,” Ramsay said.
This pilot project is something Ramsay and Till would like to fold into the current consumer protection bill.
“It could morph into something more significant,” Till said.