Prior authorizations (PA’s) are now being required by many insurance companies for even the simplest procedures and prescription drug medications. This is angering consumers and health care professionals alike.
Insurers are mandating prior authorizations for a widening array of procedures, drugs and tests. Heretofore, prior authorizations were traditionally required only for expensive, elective or new procedures, such as a hip replacement or bypass surgery. Now the pendulum has moved in the opposite direction — with some insurers now requiring PA’s for even the simple renewal of some prescription drugs. And, to add more restriction, many of these preapprovals are time-limited.
While doctors and hospitals chafe at the administrative burden, insurers contend the review is necessary to ferret out waste in the system. They claim that costs are exploding and that many procedures are really not necessary. They want to ensure that doctors are prescribing useful treatments.
Prior Authorizations: Beware, Your Approval Can Be Rescinded After Your Procedure Is Completed
Yes, a recent report by Kaiser Health News details the growing number of cases where approved PA’s were subsequently reversed after the patient already had the procedure done. Consequently, the patient was directly billed and required to pay out of pocket.
As described by Kaiser Health News, Darla and Andy Markley’s bankruptcy and loss of their home in Beloit, Wisconsin, came from a PA reversal.
Darla Markley, 53, said her insurer had sent her a letter pre-approving her to have a battery of tests at the Mayo Clinic — after she came down with transverse myelitis, a rare, paralyzing illness. She was hospitalized for over a month. The medical bills totaled over $34,000.
Anthem Blue Cross and Blue Shield judged that the tests weren’t needed after all and refused to pay. Even though Markley said she and Mayo had gotten approval.While Darla learned to walk again, the Markleys tried to pay off the bills. Even after Mayo wrote off some of what they owed, her disability and Social Security checks barely covered her insurance premiums. By 2014, five years after her initial hospitalization, they had no choice but to declare bankruptcy.
The Markleys’ experience has also hit other patients as well. When insurers revoke their decision to pay after the service is completed, patients are legally required to pay the bill.
Prior authorizations may now include a line saying: “This is not a guarantee of payment.” This loophole allows insurers to change their minds after the fact. The insurer claims that your treatment was medically unnecessary.
They will claim that the procedure was performed too long after approval was granted.
In other cases, a patient is told that no PA is needed. But later, after the procedure is done, it demands the PA and refuses to pay.
Prior Authorizations: Clogging The Health Care Pipeline
Many physicians consider the extra paperwork needed for PA’s, a growing problem that requires extra staff.
According to an AMA survey released in 2019, 88% of providers reported that PA’s increased over the past five years. This forces staff to spend an average of two business days a week completing the paperwork.
It’s unknown how many patients get stuck with bills for prior approvals gone wrong. But retrospective denials have become only more common as PA’s have increased.
Prior Authorizations: Is There A Solution?
We encourage consumers to remain vigilant,” said Katie Dzurec, acting director for the Health Market Conduct Bureau in Pennsylvania. “Ask questions, review documents and contact the insurance department.”
Also important is to work closely with your doctor to insure that the paperwork submitted is clear and correct. Don’t give your insurance company any excuse to deny your PA.