Another look at pre-authorization

Adding to the area highlighted in last week's blog post, ProPublica published a look into one major insurer's way of handling prior authorization requests. We tend to think of automation positively, but what about when it can be used to create much more hassle for patients and doctors? The picture that ProPublica's article paints is that the insurer's doctors use software to reject prior authorization requests in bulk, in some instances averaging less than two seconds per case. It appears that the researchers for the article obtained an internal spreadsheet that documented how many claims were denied per doctor in a two-month time span. A former executive at the insurer was quoted as describing a strategy of denying all requests and seeing which rejections were contested.

One core issue with the system is the asymmetry of the costs and rewards: rejecting a prior authorization request costs the insurer very little, but can cost the provider much time and can cost the patient much money. If the rejection is not contested, insurers likely save money (at least in the short-term), and if a rejection is contested, they likely do not pay any out-of-pocket penalty. Last week's post mentioned some potential fixes, such as publishing rejection rates or making the insurer (or medical directors) liable for the harm caused to patients because of the denied medical care. One could imagine setting up a state-level ombudsman to adjudicate disputes and requiring insurers to compensate providers for their time whenever a case is decided in the providers' favor.