The mother recently changed insurance and received notice that her son’s TNFi would not be covered. The physician was not surprised and said the office would obtain prior authorization. Again, the medication was denied. The physician reached out for a peer-to-peer review, and the peer, a radiologist, reported the TNFi would not be authorized because the patient must have failed a conventional disease-modifying anti-rheumatic drug (DMARD) first.
The physician explained this was a continuation of current successful treatment; however, the physician was told the rules are the rules and no exception could be made. The physician escalated the prior authorization review to the medical director, who finally agreed to allow treatment with a TNFi, stating, however, that a different agent must be used because the prescribed treatment is not on formulary for the current insurance.
Dr. Christina Schutt
The physician reported back to the mother who remained worried her son will flare with a change in treatment and couldn’t understand why the physician was unable to convince the insurer to continue the current treatment.
This case illustrates a number of different ethical issues that are all too familiar to practicing physicians, who must balance trying to address the needs of one patient while responding to rules and changes that add time to a schedule already stretched thin.
Prior Authorization Struggles
Nothing is more frustrating or infuriating for a physician than spending time on hold with an insurance company to plead for approval so patients can obtain the medications they need, only to be met with cookie-cutter guidelines, forcing the physician to follow the guidelines or risk spending hours more on the phone. This is exceedingly common in pediatric rheumatology, in which many drugs are used off label, due to the difficulty of performing studies in the pediatric population.
Decisions often appear capricious. Companies may demand the use of a tablet in place of an expensive liquid despite the fact that the patient is a toddler. Companies may insist that all patients with any subtype of JIA be treated with a TNFi first, despite ample evidence that this class of medications does not work for systemic JIA. Patients who have been stable for years on one medication may be asked to switch to a different medication due to a sudden formulary change.
A practice of just three physicians would require one full-time employee to focus solely on prior authorizations.
This antiquated system forces physicians to make decisions about when a fight is worth the effort. Going through multiple appeals may take hours, while changing medications in response to insurance rules may cause patients to question the original treatment decision, interfering with the doctor-patient relationship.
Original purpose: Why does the prior authorization process exist? The stated reason is to prevent overprescribing expensive new medications when a trusted, cheaper, older medication is available. The process may also prevent a patient from being prescribed medications they may not need or that could interact dangerously with other medications they take. Finally, screening requirements may remind physicians to do routine checks, such as annual tuberculosis tests for patients receiving a TNFi.
Although those intentions are worthwhile, the evidence that healthcare costs have lessened or that patient safety has improved as a result of prior authorization use is very limited.
Does the prior authorization process truly save money for patients and society at large, or does the cost just get shifted?
Physician cost: A 2019 survey completed by the American Medical Association (AMA) found that physicians spend an average of 14.4 hours each week completing these authorizations and complete, on average, 33 prior authorization requests per physician, per week.1 A practice of just three physicians would require one full-time employee to focus solely on prior authorizations.
Eighty-six percent of physicians say their perspective of the burden of prior authorizations is either high or extremely high.
A study published in Health Affairs delved deeper and found that converting the time into dollars, practices nationwide spend an average of $68,274 per physician per year on prior authorization requests. This comes to an estimated $23 billion to $31 billion annually.2 Physicians are spending an astronomical amount on administrative costs to complete prior authorizations.
Even more worrisome is that the majority of physicians (86%) report this burden has continued to increase over the past five years.
After an initial denial, a physician may appeal, which can sometimes take weeks or more. Some insurance companies demand that appeals occur in writing only. Some companies allow an appeal over the phone with an insurance company-compensated physician. This process is commonly referred to as peer-to-peer.
Often, these peer physicians are not in the same field as the requesting physician. Frequently, they are authorized only to explain why a decision was made and have no power to reverse a decision. This can be especially problematic for specialists who deal with rare diseases, such as pediatric rheumatologists.
Drug formularies: Formulary changes contribute to much of the chaos. Each insurance company has its own formulary and set of rules regarding what it will and won’t cover, making the formulary process almost impossible to navigate.
This is especially difficult for the young, as well as indigent patients covered by Medicaid. Different rules and standards are set for each state without any consistency.
The attention focused on setting a formulary by an intermediary known as the pharmacy benefit manager (PBM) has been increasing. PBMs manage prescription drug benefits on behalf of health insurers. They help negotiate discounts or rebates on specific drugs from manufacturers, which then lead to that drug’s inclusion on an insurer’s formulary.
Many people believe this middleman forces higher list prices for medications. And a recent study found the share of rebates PBMs pass through to insurers and payers increased from 78% in 2012 to 91% in 2016.3 But many small insurers and employers say they don’t receive this share of savings. There is great interest in tracking this money trail. If the formulary changes from year to year, it may very well be due to rebates or discounts. That information is never available to the physician or patient.
Patient safety: As for patient safety, the same 2019 AMA survey asked physicians if they had experience(s) in which the prior authorization process affected care delivery and led to a serious adverse event, defined as death, hospitalization, disability/permanent bodily damage or other life-threatening event. Twenty-four percent of physicians reported this experience and 16% of physicians additionally reported that delay led to hospitalization. Ninety-one percent reported some sort of a care delay due to prior authorizations, and 74% reported that some patients abandoned the recommended course of treatment due to their prior authorization experience.
Delay of care and treatment abandonment certainly play a role in ensuring poorer outcomes for patients.
Call for Reform
Insurers may have instituted the prior authorization process with the intention of decreasing healthcare costs and improving patient safety and outcomes. However, it has become abundantly clear that the current, convoluted process does nothing but cause frustration, while passing the costs to physicians and patients. What can we do as physicians to push for change?
We can lend our voices to a call for a federal legislative solution, such as reform bill H.R. 3107: The Improving Seniors’ Timely Access to Care Act. This bill would require standardization of the prior authorization process via an electronic format, which can ease transmission to insurance companies and potentially provide real-time decisions in response. The bill would also require transparency, requiring payers to publish specified prior authorization information annually, including the percentage of requests approved and the average response time.
This bill could be a great start toward improving patient care and outcomes, preserving the relationship between patient and physician, and decreasing the physician burden by doing away with an antiquated and opaque system.
Christina Schutt, DO, FAAP, is an assistant professor in pediatrics in the Division of Rheumatology, University of Rochester Medical Center, N.Y. She is a current member of the ACR Committee on Ethics & Conflicts of Interest.
References
- American Medical Association. 2019 AMA prior authorization (PA) physician survey. 2020.
- Casalino LP, Nicholson S, Gans DN, et al. What does it cost physician practices to interact with health insurance plans? Health Aff. 2009 July–Aug;28(4 Suppl 1):w533–w543.
- The prescription drug landscape, explored. The Pew Charitable Trusts. 2019 Mar.
Editor’s note: This article was written for The Rheumatologist on behalf of the ACR Committee on Ethics & Conflict of Interest. If you have comments or questions about this case, or if you have a case that you’d like to see in Ethics Forum, email us at [email protected].
