The Futility of Prior-Authorization

The insurance giant Aetna now requires prior-authorization for all cataract surgeries. Why, because it “helps members avoid unnecessary surgery.” That’s healthcare shorthand for “We don’t want to pay for it.”

Cataract surgery is safe and effective and is the most common medical procedure performed in the United States. (Four million Americans have cataract surgery every year with a success rate of 97+ percent.) Cataract surgery improves quality of life, cuts the risk of falls and car accidents, and reduces cognitive decline among older adults. 

According to the American Academy of Ophthalmology (AAO), “Because Aetna published no updated policy documents and provided limited prior education, the new policy is already causing chaos at the doctor’s office. This at a time when ophthalmology practices are struggling to fit patients in as they work through a backlog of surgeries due to COVID-19 shutdowns. The nation’s ophthalmologists are committed to finding a solution that does not delay or deny our patients access to vision-restoring surgery.”

This issue may be new to ophthalmologists – but it is hardly new.

Prior authorization (also known as pre-authorization, pre-certification, or prior notification) is a policy whereby an insurance company refuses to pay for some treatments unless a doctor first seeks permission before writing a prescription. Since most drug regimens should begin immediately, waiting days or even weeks for an insurer to approve a doctor's prescription simply isn't tenable. Insurers know that better preventive care is ultimately more cost-effective.

Subpar insurance harms patients' financial health, too. Using a better medicine from the start prevents lost productivity and needless hospitalizations. In fact, for every dollar spent on newer advanced medicines, non-drug medical spending drops by more than $7.

But insurers hesitate to make large up-front investments in patients' health since people frequently switch insurers. Companies don't want to spend heavily—and jeopardize their sacred quarterly results—to save their rivals money a few years down the road.

Two independent nationwide surveys, one by the American Medical Association (AMA) and the other from the American College of Rheumatology (ACR) show broad physician dissatisfaction with prior-authorization and step therapy. Let’s look at the numbers.

Per the AMA-conducted survey of 1,000 physicians, surveyed in December 2020, 83% responded that prior authorizations for prescription medications and medical services increased over the past five years. Along with increased volume, most physicians reported a continued lack of transparency in such programs, with a majority finding it difficult to determine whether a prescription medication (68%) or medical service (58%) requires prior authorization. A frightening 87% of physicians reported that prior authorization interferes with their patients’ continuity of care.

In parallel, the American College of Rheumatology reports that: 

• 47.94% of patients receiving treatment for their rheumatic disease reported that their provider needed to obtain prior authorization for their prescription in the past year.
• 46.17% of patients receiving treatment for their rheumatic disease reported they were required to undergo step therapy, even when their doctors are not confident the insurer-preferred options will be equally effective as their own choices.

  The American Medical Association, the American College of Rheumatology and the American Academy of Ophthalmology are calling on Congress to remedy the problem by passing The Improving Seniors’ Timely Access to Care Act (HR 3173). 

This bipartisan piece of legislation would require Medicare Advantage (MA) plans to streamline electronic prior authorization to ensure swift decision-making and ensure that routinely approved care and treatments are not subjected to unnecessary delays.

Prior authorization may save insurance companies money, but it ends up raising healthcare costs for everyone else. If doctors can only prescribe “less expensive," less-effective treatments, patients will get sicker, be hospitalized more frequently and require more expensive care. Such demand will drive up overall healthcare costs, overwhelming healthcare providers and hospitals with waves of new patients. Sound familiar?

It’s time for change. It’s time for action. Lives are at stake.

Peter J. Pitts, a former FDA Associate Commissioner, is President of the Center for Medicine in the Public Interest and a Visiting Professor at the University of Paris School of Medicine