Montana considers regulating prior authorization practices

Some providers and patients have encountered much frustration from the challenges of prior authorization and other cost-saving measures of insurers. KFF Health News published an article of how enough people in Montana have been exasperated by insurers' practices that the there is now bipartisan legislation being considered to regulate different aspects of prior authorization.

In principle, prior authorization helps protect against fraudulent providers who bill for unnecessary procedures by giving insurers a way of preemptively denying certain treatments that they deem unnecessary. However, the cost of prior authorization (paperwork and delays) is borne by many physicians and patients, not just ones that try to cheat the system. Additionally, others have noted that some insurers spend very little time reviewing decisions, adding costs to the system by asking doctors to appeal denials. In the article, one doctor is quoted as saying that she spends twelve hours a week on prior authorization -- which seems excessive.

Proposed remedies include eliminating "retroactive denials -- when insurers refuse to pay for treatment they'd authorized" (unclear why that practice is allowed) and prohibiting requiring prior authorization for most generic drugs. Although not proposed in the article, perhaps another way of handling the issue is to set up an state-level arbitration committee, and make it easy for doctors to appeal to them, potentially trigger fines for insurers when the committee rules in favor of the patient. It is understandable that more patient-friendly practices will result in higher costs, but perhaps there could be some system-level savings when doctors and insurers need not spend as much time arguing about approval for specific treatments.