Study quantifies prior-authorization burden

Georgia medical society found that 880 services required prior approval from payers and discovered inconsistencies in how the list was used.

By Emily Berry — Posted May 20, 2009

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Asking permission from an insurance company before performing a service has rubbed many physicians the wrong way over the years, but there appear to be relatively few studies that quantify how much of a burden prior authorization requirements are for doctors.

The Medical Assn. of Georgia took on the task earlier this year and found that as many as 880 services required prior authorization for one or more major payers in the state.

John A. Goldman, MD, a rheumatologist from Atlanta who chairs the group's Third Party Payer Committee, said the association felt that the problem of prior authorizations was big enough to merit a close look.

The number of services required for prior authorization wasn't deemed the only problem. The study showed inconsistencies in how insurers publish the lists of services that require prior authorization, a wide range in how long it typically takes doctors to get an approval or denial, and even a wide variation in penalties for failing to obtain prior authorization, from no stated penalty to total denial of payment.

The group's recommendations reflected those problems. MAG said insurers should adopt more consistent rules, make them less onerous to follow and do a better job communicating the rules to physicians.

But insurers continue to posit prior authorization as a valuable tool in promoting quality, not just cost savings.

Robert Zirkelbach, spokesman for insurer trade group America's Health Insurance Plans (AHIP), said prior authorization requirements serve an important purpose -- standardizing care in a system that has been shown repeatedly to vary widely in terms of cost and quality.

"What this is designed to do is help ensure patients are getting the right health care treatments at the right place at the right time," he said.

More details about the MAG study are available online (link).

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