Prior Authorization Rates & Processes Go Public

Prior authorization, or the insurance practice of requiring authorization prior to the delivery of care or dispensation of drugs, has been under fire for the consequences of restricting timely access to care. Now, payers will be required to post data on how often they deny requests, how quickly they process them and how often denials are overturned on appeal.

The Centers for Medicare and Medicaid Services (CMS) finalized the Interoperability and Prior Authorization Rule in January 2024, and the rules apply to all Medicare Advantage plans, state Medicaid and CHIP plans, managed care organizations and plans on the individual marketplaces. The rule says the insurers must publish their metrics annually, and the first set was to be published on March 31 for 2025 data, Becker’s explains. In 2027, payors will be required to include a provider access user interface platform (API) that can receive and respond to requests electronically.

Policymakers have struggled to implement rules that could alleviate the stresses on patients and providers, but some states have endeavored to set procedural rules that directly regulate health plans. The Regulatory Review explains that some states have formulated programs like the Texas and West Virginia “gold card” laws that exempt certain healthcare providers based on past approval rates. Policy scholars suggest that the insurers’ framing of prior authorization as a cost-control tool means that it inherently functions as a barrier to care.

In preventing timely access to care, prior authorization carries additional costs to mitigate the health consequences of delays and the clerical costs associated with clinical requests. The practice costs the U.S. healthcare system an estimated $35 billion each year and requires practices to complete nearly 40 requests per physician per week. Physicians broadly report experiencing delays in care while waiting for approval and patients abandoning treatment due to the wait. Another study shows that each PA transaction costs practices between $20 and $30, Medpage Today reports.