Medical EconomicsPractice ManagementAmerica's Health Insurance Plans
`Curing the prior authorization headache
`
`October 10, 2013
`By Jeffrey Bendix, Senior Editor
`
`Few words arouse more frustration among primary care physicians (PCPs) than “prior authorization.”
`And it’s easy to understand why. The time you and your staff have to spend persuading an insurance
`company to cover a medication or procedure is an expensive and annoying distraction from the task of
`caring for patients.
`
`On the bright side, while you may not be able to avoid prior authorizations entirely, you can take steps
`to minimize the hassle and expense they bring.
`
`The costs of prior authorization
`
`Although prior authorization has been an issue among healthcare providers for at least a quarter of a
`century, surprisingly little is known about its cost, either to individual practices or to the healthcare
`system as a whole. In 2006, PCPs spent a mean of 1.1 hours per week on authorizations, primary care
`nursing staffs spent 13.1 hours, and primary care clerical staff spent 5.6 hours, according to a 2009
`study published in Health Affairs. The study estimated that the overall cost to the healthcare system of
`all practice interactions with health plans, including authorizations, was between $23 billion and $31
`billion annually.
`
`More recently, a study of 12 primary care practices published earlier this year in the Journal of the
`American Board of Family Medicine put the mean annual projected cost per full-time equivalent
`physician for prior authorization activities between $2,161 and $3,430. The study’s authors concluded
`that “preauthorization is a measurable burden on physician and staff time.”
`
`Focus on medications, diagnostic imaging
`
`While insurance companies differ somewhat in the areas where they require prior authorizations, the
`two most common are imaging procedures such as computerized tomography (CT) scans and magnetic
`resonance imaging (MRI), and brand-name pharmaceuticals.
`
`“We have to get authorization for most CTs and MRIs, along with some ultrasounds and sleep studies,”
`says Jeffrey Kagan, MD, an internal medicine practitioner in Newington, Connecticut, and Medical
`Economics editorial adviser. Kagan says prior authorizations and insurance referrals together consume
`about 25% of the time of his practice’s two billing clerks and one of the practice’s three receptionists.
`
`The practice’s prior authorizations for medications usually involve brand-name products for which there
`is no generic equivalent, or a drug that a patient has taken for years but for which the insurance carrier
`now requires annual reauthorization.
`
`“This all wastes a lot of our time and it’s not reimbursed,” Kagan adds. “I feel that if an authorization
`has to be done the insurance company should allow a higher level of billing for the visit or a surcharge.
`I’m sure attorneys don’t bring motions before a judge for free.”
`
`“It’s a nuisance, it’s time-consuming, and often it’s not in the patient’s best interest,” says George G.
`Ellis, Jr., MD, a solo internal medicine practitioner in Boardman, Ohio, and Medical Economics
`editorial adviser. He recounts the frustration of dealing with a Medicaid health maintenance
`organization over the proper medication for treating a patient’s gout. The HMO was requiring prior
`authorization for the drug Ellis wanted to prescribe, but not for a less expensive medication that Ellis
`
`http://medicaleconomics.modernmedicine.com/medical-economics/content/tags/americas-health-...
`
`10/30/2017
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`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1538
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`

`

`Medical EconomicsPractice ManagementAmerica's Health Insurance Plans
`Curing the prior authorization headache
`
`October 10, 2013
`By Jeffrey Bendix, Senior Editor
`
`Few words arouse more frustration among primary care physicians (PCPs) than “prior authorization.”
`And it’s easy to understand why. The time you and your staff have to spend persuading an insurance
`company to cover a medication or procedure is an expensive and annoying distraction from the task of
`caring for patients.
`
`On the bright side, while you may not be able to avoid prior authorizations entirely, you can take steps
`to minimize the hassle and expense they bring.
`
`The costs of prior authorization
`
`Although prior authorization has been an issue among healthcare providers for at least a quarter of a
`century, surprisingly little is known about its cost, either to individual practices or to the healthcare
`system as a whole. In 2006, PCPs spent a mean of 1.1 hours per week on authorizations, primary care
`nursing staffs spent 13.1 hours, and primary care clerical staff spent 5.6 hours, according to a 2009
`study published in Health Affairs. The study estimated that the overall cost to the healthcare system of
`all practice interactions with health plans, including authorizations, was between $23 billion and $31
`billion annually.
`
`More recently, a study of 12 primary care practices published earlier this year in the Journal of the
`American Board of Family Medicine put the mean annual projected cost per full-time equivalent
`physician for prior authorization activities between $2,161 and $3,430. The study’s authors concluded
`that “preauthorization is a measurable burden on physician and staff time.”
`
`Focus on medications, diagnostic imaging
`
`While insurance companies differ somewhat in the areas where they require prior authorizations, the
`two most common are imaging procedures such as computerized tomography (CT) scans and magnetic
`resonance imaging (MRI), and brand-name pharmaceuticals.
`
`“We have to get authorization for most CTs and MRIs, along with some ultrasounds and sleep studies,”
`says Jeffrey Kagan, MD, an internal medicine practitioner in Newington, Connecticut, and Medical
`Economics editorial adviser. Kagan says prior authorizations and insurance referrals together consume
`about 25% of the time of his practice’s two billing clerks and one of the practice’s three receptionists.
`
`The practice’s prior authorizations for medications usually involve brand-name products for which there
`is no generic equivalent, or a drug that a patient has taken for years but for which the insurance carrier
`now requires annual reauthorization.
`
`“This all wastes a lot of our time and it’s not reimbursed,” Kagan adds. “I feel that if an authorization
`has to be done the insurance company should allow a higher level of billing for the visit or a surcharge.
`I’m sure attorneys don’t bring motions before a judge for free.”
`
`“It’s a nuisance, it’s time-consuming, and often it’s not in the patient’s best interest,” says George G.
`Ellis, Jr., MD, a solo internal medicine practitioner in Boardman, Ohio, and Medical Economics
`editorial adviser. He recounts the frustration of dealing with a Medicaid health maintenance
`organization over the proper medication for treating a patient’s gout. The HMO was requiring prior
`authorization for the drug Ellis wanted to prescribe, but not for a less expensive medication that Ellis
`
`http://medicaleconomics.modernmedicine.com/medical-economics/content/tags/americas-health-...
`
`10/30/2017
`
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`

`

`felt was contra indicated. “Why should I spend 45 minutes on the phone to prescribe a drug that is
`indicated versus one that is contra indicated? It’s crazy,” he says.
`
`Kevin de Regnier, DO, a solo family practitioner in Winterset, Iowa, has seen the demands for prior
`authorization grow steadily during his 26 years of practice. “When I started out it never came up,” he
`recalls. “Then we started seeing it in a small number of high-dollar medications, then it expanded into
`more and more branded medications, and then moved into getting procedural prior auths, especially in
`the radiology field,” he says.
`
`The problem now is particularly acute in treatment involving workers compensation claims, he adds.
`“Now you’ve got to prior auth every procedure and every referral, even referrals for physical therapy.”
`
`Most of the responsibility for obtaining prior authorizations falls to the practice’s three nurses.
`According to de Regnier, the nurses spend about 10% of their time each day on prior authorization. “It’s
`an unreimbursed cost of providing care, and unfortunately we don’t have the financial resources to
`bring in someone to do prior auth exclusively, even on a part-time basis,” he says.
`
`‘We get numb to it’
`
`Yul Ejnes, MD, MACP, an internal medicine practitioner in Cranston, Rhode Island, and past president
`of the American College of Physicians Board of Regents, regards prior authorization as “one of the
`many hassles we have to deal with, but it’s kind of in the background except when things heat up for
`one reason or another.” Such a situation occurred at the start of 2013, Ejnes says, when the state’s
`largest insurer changed its pharmacy benefits manager (PBM). The new PBM had different rules for
`drugs it would cover, resulting in a flurry of new prior authorizations.
`
`“That reminded us all that it (prior authorization) exists, but on any given day we get numb to it, like we
`do to a lot of the other hassles we deal with,” Ejnes says.
`
`The payers’ perspective
`
`Despite
`PCPs’
`
`complaints about prior authorization, it’s used less frequently now than in the past, says Susan Pisano,
`vice president for communications for America’s Health Insurance Plans, the trade association
`representing the health insurance industry. “It focuses on really specific things now, such as back
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`surgery and high-tech imaging, where there’s clear documentation that something is being overused or
`misused, and where there’s both a patient safety and cost implication.
`
`“There’s clear evidence that overuse of high-tech imaging may in some cases be contributing to
`cancers,” she adds. “So you want to make sure the benefit outweighs the risks.”
`
`Pisano cites a 2008 study from the U. S. General Accounting Office showing that spending on advanced
`imaging rose by 17% annually between 2000 and 2006, far faster than less-expensive procedures.
`
`Regarding medications, Pisano says the widespread availability of generics has made prescription drugs
`more affordable for many patients. “There will always be patients who require the brand name for one
`reason or another, but when you’ve got something that works as well and is less costly, you want to
`make that available to consumers,” she says.
`
`Easing the prior authorization burden
`
`Although prior authorizations may be an unavoidable part of doing business for primary care practices,
`there are still plenty of steps practices can take to reduce the time and financial burdens associated with
`them. A good start is to look at how frequently a payer requires prior authorizations and balance that
`against the payer’s level of reimbursement, says Judy Bee, medical practice management consultant in
`La Jolla, California and Medical Economics consultant.
`
`“If you have a plan that is ho-hum in its reimbursement and is requiring a lot of time (for prior
`authorizations) you probably should rethink whether you need to participate, because that’s coming
`right out of your wallet,” she says.
`
`In addition, practices should go through payers’ Web sites to obtain prior authorizations whenever
`possible, says Bee. Going online usually gets a quicker response and avoids wasting time on hold on
`telephone calls.
`
`Practices with more than one location
`often can create greater efficiencies by
`centralizing the prior authorization
`responsibility, says Owen Dahl, MBA,
`FACHE, principal of Owen Dahl
`Consulting in The Woodlands, Texas.
`Putting just one or two individuals in
`charge of prior authorizations for the
`entire practice will enable those
`employees to become highly skilled in
`the process and develop relationships
`with the payers.
`
`Dahl also recommends seeking pre-
`approval from payers for a plan-of-care if
`it has proven successful with multiple
`patients. “Tell the payer that if the patient
`presents with this disease, this is what we
`will do, can we get blanket approval for
`this without having to call every time for
`authorization if the patient needs a
`procedure under this treatment plan?”
`says Dahl. Even if the payer declines, he
`adds, you’ve at least opened a dialogue with the payer that could prove useful later on.
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`The next step is to try and minimize the number of times you’re required to get a prior authorization.
`For medications, Ejnes recommends becoming familiar with insurers’ formularies, and developing a list
`of drugs they all cover for common diseases. For example, he says, if there are multiple choices for
`medications to treat high blood pressure, but you know all your insurers will cover Losartan as a generic
`angiotensin receptor blocker, “then just get in the habit of prescribing that drug—always assuming it’s
`appropriate for the patient—and you avoid having to deal with a multitude of prior auths,” he says.
`
`Ejnes also instructs his staff to have the forms required for the drugs and procedures that most
`commonly require a prior authorization easily available, either in hard copy on their computers. “That
`way when a ‘prior authorization necessary’ alert comes in, they’re not scrambling to download a form,”
`he says.
`
`Minimize high-cost imaging tests
`
`Robert Eidus, MD, MBA, a family practitioner in Cranford, New Jersey, also tries to avoid prior
`authorizations, both by minimizing the number of high-cost imaging tests he orders, and by starting
`patients on generic medications whenever possible. But if ordering an MRI or other high-cost test is
`called for, he tries to simplify the process with the help of his practice’s electronic health record (EHR)
`system. His practice developed a customized form on its EHR that automatically captures the
`demographic information the radiology utilization review company usually requires before authorizing
`payment for a procedure.
`
`The form also includes a reminder at the bottom to see the most recent clinical note for the patient.
`“When we do a prior auth, a clerical person generates the form and they attach the last note, which
`streamlines the administrative process,” Eidus says.
`
`To reduce the number of what he terms “inappropriate denials,” Eidus recommends learning each
`payer’s criteria for authorizing coverage of an imaging procedure and ensuring that the data sent to the
`approving body clearly meets the criteria.
`
`“When I know I have to do a prior auth, my progress note for that day is designed to clearly justify why
`I need it,” he says. “So it might say the patient has had physical therapy or has severe intractable pain,
`and make it very clear and distinct so that a reviewer can’t miss it.”
`
`An additional challenge PCPs sometimes face is patients requesting a brand-name medication before
`trying a generic. de Regnier says he addresses that situation by asking the patient his or her reasons for
`requesting the brand-name.
`
`“Usually what you find is they’re basing the request on a TV commercial,” he says. “If it’s appropriate
`I’m willing to go to bat for them, but usually it’s not what they need and won’t be approved, so I try to
`explain that to them.”
`
`Target the outliers
`
`Although many physicians recognize the need to minimize inappropriate use of costly radiology
`procedures and prescription medications, they say the solution is to find and penalize the relative
`handful that do so, rather than all physicians.
`
`Such an approach would benefit both payers and providers, says Reid Blackwelder, MD, president of
`the American Academy of Family Physicians. “Insurance companies don’t want to practice medicine,”
`he says. “The costs, in both time and resources, to obtain prior authorization is high for everyone
`involved.
`
`“Insurance companies should focus on the outliers, those who order tests or utilize services that are not
`consistent with similar clinical circumstances,” Blackwelder adds.
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`de Regnier estimates that no more than 20% of most insurance companies’ physician panels are
`overprescribing or overutilizing. “And yet the other 80% of us pay the price for that,” he says. “So why
`not work with the physicians’ societies to provide a more focused educational program? I think that
`would be effective and reduce the global cost of caring for patients.”
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