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UnitedHealthcare’s Announcement re Prior Auth Changes Disappoints!

Today’s video discusses prior authorization requirements and the recent changes UnitedHealthcare announced which rather surprisingly made the cover page of the Wall Street Journal. We would welcome substantive changes to prior authorization procedures because they create an administrative burden for providers and patients and it is not clear these processes achieve their purpose.

Prior authorization is a cost-containment measure used by insurance companies to review and approve services before they are provided. Prior authorization is typically required for costly procedures and drugs. It is reasonable for there to be some process to ensure that costly healthcare resources are used wisely and fairly. However, there is very little evidence of the effectiveness of prior authorization. A process that requires administrative resources from the insurer and the provider, disrupts patient care and potentially leaves expensive equipment idle when scheduled procedures are canceled, needs to be effective. Otherwise, prior authorization simply adds unnecessary administrative costs to a system burdened with so much waste already. And think of the stress prior authorization often creates. The newly diagnosed cancer patient receives a letter that states, “based on the information your healthcare professional sent us, we cannot approve this request.”

UnitedHealthcare made the front page of the Wall Street Journal on March 29 with an article entitled “Dreaded Medical Paperwork Required by Insurers to be Trimmed.” The article states that United processes about 13 million prior authorization requests out of a total of 600 million claims and that its stated goal is to reduce use of the prior authorization process to roughly 10 million requests per year. That United processes 600 million claims per year isn’t that relevant to the debate. What should be focused on is, of the 13 million prior authorization requests, what percentage are approved timely and what percentage are denied? Further, of the percentage denied, what percentage were appropriate denials? An appropriate denial might include insufficient clinical information, a request that seems excessive when other effective options are available or a request that does not seem appropriate for the condition or diagnosis. However, we fear the “tug of war” which the prior authorization process often involves simply delays care which is subsequently provided and paid for anyway.

Physicians who consistently refer appropriately should have access to a less burdensome process. And patients with a diagnosis that requires regular periodic testing shouldn’t have their physician offices subjected to endless submissions to justify a procedure that the medical literature agrees should be done at a given interval.

Unfortunately, UnitedHealthcare’s announcement also failed to identify where the reduction in three million procedures requiring prior authorization might occur. If they have that specific a goal, we would hope they would have greater focus on what procedures would be affected. Here is a quote from the article:

The company didn’t list specific services that will be affected but suggested they could include certain types of medical equipment like orthopedic support devices and some genetic tests used for diagnosis.

The overall cost impact of pulling back on prior authorization will be very small, Mr. Kaufman said. (Kaufman is the Chief Growth Officer for UnitedHealthcare).

In summary, we are extremely sympathetic to the medical community’s concern that prior authorization often delays needed care. According to a Kaiser Family Foundation article published last year, a 2021 American Medical Association survey determined that “most physicians (88%) characterized administrative burdens from this process as high or extremely high.”

If, as stated by UnitedHealthcare’s executive, the “overall cost impact of pulling back on prior authorization will be very small,” then more reasonable approaches should be adopted by all insurers and implemented immediately.

Please watch the video!