Are Payers Adding to Health Care Costs with Prior Authorization Burdens?

The American Medical Association (AMA) recently sponsored a physician survey which reports a significant increase in prior-authorization burdens in the last few years. Payers may be placing more prior authorization requirements on commonly prescribed drugs and services that in reality are not costly nor new. Moreover Andis Robeznieks writing for the AMA online reports this type of payer activity costs the Cleveland Clinic alone $10 million dollars annually.  

Mr. Robeznieks writes that Susan Milheim, senior director of revenue cycle management for Cleveland Clinic, reports that their staff must wait at least 10 minutes during prior authorization processing requests at least 3,000 times per year.

The United States health care system faces considerable challenges on all fronts—from pharmaceutical manufacturers that seek to satiate investor demand for high returns; to providers that face a complex tangle of federal and state regulatory burdens as well as ongoing litigation threats; to payers possibly seeking to delays processes—“the floatin their attempt to mitigate risk and maximize shareholder returns to growing lifestyle-driven crisis (e.g. obesity, etc.) that contribute to overall costs.  

Over 120 million in the United States are on some form of public payer assistance (Medicaid, Medicare, etc.) at great expense to the U.S. Treasury. Untangling the interconnected cost elements will not be easy but it shouldn’t be rocket science either.  Let’s start by calling out problematic behaviors and change them—payers should apply a risk-based approach to prior authorizations—if a drug or procedure is neither new nor abnormally costly than streamline the process—and we can look at providers where they in fact can streamline processes and let’s not stop till we have a more effective and efficient healthcare system.