Latest / Cut & Tell / Prior auths, step therapy, and AI: how doctors lose their professional sovreignty

Transcript

Prior auths, step therapy, and AI: how doctors lose their professional sovreignty · Cut & Tell

• 0:00
  Hi there and welcome to Cut and Tell.
• 0:01
  I'm Liz Malfress.
• 0:02
  I'm a newly minted plastic surgeon in the great city of Philadelphia.
• 0:05
  And this season is all about arming you with the health policy knowledge that you need to be an advocate for your patients and just as importantly, for yourself in this crazy healthcare system.
• 0:30
  Okay, so today we're going to be taking a deep dive into prior auths, the history, what they are, kind of how they apply today.
• 0:38
  And we're even going to do a little bit of, like, current events, what's going on now, because it's a pretty active area.
• 0:43
  So prior auths.
• 0:44
  Auths is just an abbrev for authorization.
• 0:46
  So prior authorizations, if you're in healthcare, you probably know about these, at least in a general way, but you may not know exactly how we got here or really, I think the extent to which, how.
• 0:57
  Just how malignant they are and how they act on our system.
• 1:01
  And I don't, I don't, like, I don't make the cancer metaphor lightly, y'.
• 1:04
  All.
• 1:04
  Like, I, I mean it, because I really think that's sort of how this idea has operated in our system.
• 1:08
  And at this point, it is metastasizing.
• 1:11
  So, like, it is, It's.
• 1:12
  It's out.
• 1:13
  Prior auths are sucking all the energy and nutrients out of our normal, healthy systems that are supposed to work in a certain way to support, you know, a.
• 1:21
  A system that actually functions.
• 1:23
  And they're not even putting that energy to any productive use.
• 1:26
  You know, like, it's just this system is growing, it's sp.
• 1:29
  Spreading.
• 1:29
  And at this point, I think we've had a major breach too, of like, a boundary that has really changed things.
• 1:36
  And that's because this, this prior auth kind of idea has now spread into Medicare as well.
• 1:43
  And this is through a program called the Wiser Program.
• 1:46
  We're going to talk about that a little bit towards the end.
• 1:48
  But anyway, I think this is a major issue.
• 1:51
  And like, like, I have for the last couple episodes, I just keep coming back to this idea of professional sovereignty that we talked about in that first episode that was sort of like.
• 2:01
  And culture episode.
• 2:03
  So Paul Starr, in his book, his main kind of message or the key kind of thesis of it, was that so much of our history was about maintaining professional sovereignty, meaning that doctors are the ones who make decisions,
• 2:16
  though.
• 2:16
  They're the only ones who can make those decisions about healthcare, and that basically no one should ever come between the doctor and the patient in terms of that relationship.
• 2:25
  And in terms of that decision making authority.
• 2:28
  And I would argue that we officially lost our professional sovereignty basically with the advent of the prior auth concept.
• 2:37
  As soon as that came onto the scene.
• 2:38
  I think this was, I think this really is that first and kind of most important, most impactful wedge between the doctor and the patient and that decision making authority that I, I kind of, I think Sara is correct,
• 2:51
  that that's in a way like a sacred bond and it's, it's been violated.
• 2:55
  Like it didn't happen.
• 2:56
  It didn't happen in a big splashy way, y'.
• 2:58
  All.
• 2:58
  As a change happens, it happens slowly, inexorably.
• 3:02
  And what we have now is a system that's been totally changed by it and that we, you know, did not succeed in maintaining.
• 3:08
  So I really think in a lot of ways we've kind of lost that battle.
• 3:11
  And at this point, it's more about trying to claw back our professional sovereignty that's been taken from us basically through this crazy system.
• 3:19
  Okay, but before I get all philosophical, y' all know that I like to do that.
• 3:23
  I do at least want to start off with some concrete information for, for anyone out there who's like, I know I, I know the term prior auth, but like, let's just break it down.
• 3:32
  What are we actually talking about?
• 3:33
  Okay, prior authorization is basically a utilization control system that's initiated by the payer, in this case the health insurance company.
• 3:43
  But payer can also mean Medicare, whoever's paying for the healthcare.
• 3:47
  So this utilization control system is initiated by the payer, and it basically means that the doctor or the healthcare provider has to get approval from the health insurance plan from the payer before they deliver that service, procedure, device,
• 4:03
  drug, whatever it is.
• 4:05
  And if they don't get that prior permission before offering the service, the insurer, the payer, however you want to refer to it, they will opt to either not pay for it at all or only pay in part.
• 4:17
  And it's kind of a lot of jargon, but if you break it down, basically what we're talking about is that for certain kinds of doctor things, the doctor has to get permission from the health insurance person before they
• 4:28
  can do what they think the patient needs.
• 4:32
  And it's just worth keeping track through all of this.
• 4:34
  That, that basic, that basic core idea is kind of fucked up, honestly.
• 4:38
  So what actually happens with a prior auth, like, what are the mechanics of it?
• 4:43
  Because I know not everybody who's listening actually kind of lives and breathes this every day.
• 4:47
  So let's just go over it briefly.
• 4:49
  So you, you're the doctor, you place an order for something that you think your patient needs based on your like, you know, clinical judgment or whatever.
• 4:57
  Either you or more likely your staff, someone on checks the payer's rules.
• 5:02
  Those rules are going to be different for every payer and even can be different for different plans with the same payer.
• 5:07
  So that's not necessarily an easy step.
• 5:10
  Staff figures out what the payer rules are.
• 5:12
  If it's something that needs a prior auth, they submit that prior auth often still via fax.
• 5:19
  We are keeping the fax industry alive here in healthcare, so they submit it either via fax.
• 5:23
  A lot of them now have payer like portal systems where you have to log on and submit it in their particular format.
• 5:28
  And then sometimes it's electronic, but that's still, it's, it's a lot less electronic than it should be, honestly.
• 5:36
  Next the payer takes that submitted prior auth which has the information about like what, what's being requested and they apply this criteria, this like it's kind of basically to decide whether or not they think, make a determination about
• 5:48
  whether they think that that thing that you're asking for is medically necessary.
• 5:52
  A lot of times these specific criteria are actually licensed from third party vendors, which is kind of crazy.
• 5:56
  So there's like a lot of different players involved, a lot of moving parts here.
• 6:00
  So they, you know, take however much time they decide that they want to make this decision and they either approve it or they deny it or you know, they request more records.
• 6:09
  There's a lot of kind of different options to delay as well.
• 6:13
  If they deny it, you usually have the option for a peer to peer review.
• 6:16
  And if you're not familiar with the peer to peer review process, it's, it's kind of crazy.
• 6:19
  And like the, the idea behind it is that you are reviewing it with a peer.
• 6:23
  So like another doctor in your profession.
• 6:25
  The reality is is it's often not another doctor in your profession, but that's the idea.
• 6:29
  So basically the, the point is that you're going to review this decision with another physician and kind of argue your case.
• 6:36
  And if that doesn't work out, there's always like an opportunity for a formal appeal process to kind of like restart the whole system all over again.
• 6:43
  So what do you need prior auths for?
• 6:45
  Prior auths do not apply to everything, thank the Lord so far at least.
• 6:50
  But it certainly applies to more and more things over time and that's kind of part of the problem here.
• 6:54
  So depending on what kind of insurance Your patient has.
• 6:56
  And depending on your specialty, prior auths may be like a rare thing that comes up every once in a while.
• 7:01
  Or it can be very much part of your daily life, especially in certain subspecialties.
• 7:05
  These.
• 7:06
  So for example, in plastics, that's just what I'm most familiar with.
• 7:08
  So in plastics, like breast reductions and paniculectomies, very bread and butter cases that we do frequently, a lot of these require prior authorization or another kind of like, it's, it's really this.
• 7:20
  I didn't want to make it.
• 7:21
  It's a whole separate thing because it really is kind of the same concept.
• 7:24
  But there's, there's also this idea of like step therapy or fail first policies.
• 7:28
  Basically what that means.
• 7:29
  It's the same thing.
• 7:30
  It's like you cannot give the patient the exact treatment that you want to give them.
• 7:34
  You have to try and fail at all of the cheaper things first.
• 7:39
  And so like the basic example that we use in plastics and this, I think it's kind of, I think it's a good one because it's sort of absurd is some insurance companies will say your patient, if they have
• 7:49
  back pain from their giant breasts, they really need to try physical therapy first and like, see if that helps.
• 7:54
  They have to like fail a trial of physical therapy before they can get approved for a breast reduction.
• 8:00
  And that's like, would be one of those medically necessary criteria.
• 8:04
  And that same, that like fail first policy that also plays out in a lot of different fields.
• 8:08
  Like I think especially for some of the advanced biologic medications that are super expensive.
• 8:13
  Like, the only way you can get that is by quote, failing to be able to respond to a bunch of other cheaper options.
• 8:21
  Even if, as is sometimes the case, your doctor has the expertise to say, like, no, my patient needs this better medication.
• 8:27
  But anyway, this is kind of how it works.
• 8:30
  Other common ones are like Botox.
• 8:32
  If you, if you know someone who gets Botox for migraines, they almost definitely had to deal with prior auths, a lot of like injections for joint stuff, a lot of back surgery, and again, lots of, lots and lots
• 8:43
  of drugs we've had.
• 8:44
  There's a huge explosion of very expensive, very advanced drugs on the market.
• 8:48
  And a lot of those require some version of prior auth or that like fail first kind of concept.
• 8:55
  You get the picture.
• 8:55
  Basically, prior authorizations and fail first policies target expensive treatments with additional administrative hoops that you as a doctor and you as the patient have to jump through.
• 9:05
  And the argument is basically that the insurance company needs to See that the thing that you're recommending is truly medically necessary and the only available option.
• 9:15
  So, like, it has to be like, this is, this is the cheapest and best way for me to achieve this.
• 9:19
  You have to prove that to them.
• 9:21
  And only if you do that beforehand will they decide to pay for it.
• 9:25
  And while this concept, like, I can see that, like, maybe this concept could work for certain kinds of, like, very elective type procedures, certain kinds, like really expensive options.
• 9:35
  Like, maybe, sure.
• 9:36
  But the problem here is this.
• 9:38
  This removes the doctor's professional sovereignty from the equation because suddenly the doctor can no longer make the decision for their patient.
• 9:47
  They have to go ask permission from someone else.
• 9:50
  And that just the nature of that dynamic.
• 9:53
  Like, I just, I think if you went back and you told the people in, who were like kind of first establishing our system, if you told them that this is where we landed, that we kind of let this
• 10:04
  happen to us, they would be horrified because it's a.
• 10:06
  It's completely against so much of the founding ideas that really drove this profession.
• 10:12
  But of course, you know, we did the same thing in the last episode.
• 10:15
  Let's talk about, like, why they think this is a good idea.
• 10:18
  Like, what was the rationale for this?
• 10:19
  The rationale behind this idea comes from economics.
• 10:24
  It's this idea from the economics literature called moral hazard.
• 10:29
  Moral hazard is the idea that if you have an arrangement where risks and consequences are unevenly distributed, the party in that relationship that is responsible for, like, less of the consequences, that has less skin in the game, they
• 10:44
  are going to be taking on riskier behaviors than they would if they were left to their own devices because they know that the consequences are not going to fall on them or they're in some way, like, protected from
• 10:54
  those consequences.
• 10:57
  It's the key concept that underlies really any kind of insurance.
• 11:01
  But I honestly think that some of the applications we've seen of it, particularly in health insurance, are kind of, kind of like, kind of stretching things here.
• 11:09
  Economics in general.
• 11:10
  And like, I am not.
• 11:11
  I refuse to go on a tangent here.
• 11:12
  I'm, I'm just, I'm just going to say this is a field in general.
• 11:15
  Like, I, I studied economics in my, in my public policy degree.
• 11:18
  I feel like I've read a lot in this field.
• 11:20
  I've, like, understand at least the basic concepts.
• 11:23
  Economics is full of great ideas that sound good, like they sound right, and that I think make a lot of sense in an abstract kind of idealized system where people are acting rationally.
• 11:34
  But I think this is Part of, I think how I've broken in a lot of ways with some of the stuff that I learned in my master's degree is I think a lot of this just breaks down so
• 11:44
  completely when it's applied to the real world that it stops being meaningless and maybe even stops being a force for good.
• 11:50
  But anyway, I digress.
• 11:52
  The way that this moral hazard concept gets applied in healthcare is basically like if you're the patient, like, imagine you're the, you're the patient, you're a patient, you have this amazing, like the best health insurance that anyone has
• 12:03
  ever had before.
• 12:04
  It's basically magic.
• 12:05
  It covers anything and everything you want, no matter what.
• 12:08
  You kind of get to make all the, make all the calls.
• 12:11
  And if, say you had that, say you have this magical health insurance, the health insurance company, if you, if you put yourself in their shoes, what's to stop you as a patient from just like going wild out there?
• 12:22
  Every time, like you stub your toe, you're like, I need to go see the world's leading expert in toe stubbing.
• 12:28
  Like, every time you like have a cough, you're like, I need to be evaluated by this super specialist.
• 12:34
  Every time, you know, you get like just every year, you're like, you know what?
• 12:36
  I feel a twinge, need a ct.
• 12:38
  Like, that's, that's, that's what they're, that's what they're conceptualizing.
• 12:41
  Their, their argument is basically like, because you're not.
• 12:44
  Because you're paying for your health insurance and there's no like additional payment for each thing that you utilize, there's nothing to stop you from like way over utilizing HealthC.
• 12:55
  So that's what moral hazard means in the context of health insurance.
• 12:59
  So from the perspective of the health insurance company, they need to have some way to prevent you from going wild like that.
• 13:06
  And so this is, this is what drives a lot of the policies in this space.
• 13:10
  So, so, for example, like, you know, most of us, you have some kind of co.
• 13:13
  Pay like you, you go to the doctor and they still, you still pay a little something.
• 13:15
  Like you pay some amount to go to your dermatologist every time.
• 13:20
  And that's an example of this moral hazard thing where like you have some skin in the game when you go to the doctor, there's still some of that falls on you.
• 13:28
  It's not a hundred percent paid, like without any question by your health insurance.
• 13:33
  And so so much of pri prior also the same, like all these systems are basically about discouraging you as a patient from seeking out more health care than you quote, unquote, need.
• 13:45
  The thing with prior auth, though, is like, this takes this, this takes this idea of moral hazard to a whole new level, basically because it implicates both the patient and the physician in this moral hazard concept.
• 13:57
  So not only is the health insurance company, like, ostensibly worried that the patient is out there, you know, like, doing all these, you know, drinking whatever they want, jumping off of things because they've decided they don't care about
• 14:08
  whether they get injured or not because someone else is paying so that they got the patient's moral hazard.
• 14:12
  They're.
• 14:12
  They're also worried now about the doctor's moral hazard because what' to stop the doctor also from choosing the most expensive treatment all the time?
• 14:20
  Because that's probably better for them, right?
• 14:24
  And I'm not saying here, like, yes, I'm a doctor in general, I am on doctor sides, but like, obviously I know there are doctors out.
• 14:31
  Not all doctors are perfect.
• 14:33
  They're absolutely unscrupulous doctors out there.
• 14:36
  Just like there's unscrupulous everything out there.
• 14:38
  And doctors very much can be influenced by incentives.
• 14:41
  Like, I have seen that so clearly, especially in residency, like, we are not perfect.
• 14:46
  But I'd still say, I think it's a pretty bold position to take for you to be assuming that all doctors are out there doing that.
• 14:53
  And it's really kind of like, it's honestly kind of ridiculous to me when you stop and think about it.
• 14:58
  Because another term that we could use, I would say for moral hazard is just, just call it what it is.
• 15:03
  You're talking about greed.
• 15:04
  So the health insurance company is worried that you and your, and your doctors, you as a patient and you as a doctor are going to act greedy.
• 15:12
  They're worried that they're.
• 15:13
  You're going to like, want to take like, extra health care, spend all their money on it, and then you, the doctor I want to, gonna want to do extra health care and like, same thing, like get paid for
• 15:21
  it and that they're just going to be stuck with a bill.
• 15:24
  The problem that I have with this is like, doesn't moral, doesn't moral hazard apply to the health insurance companies too?
• 15:31
  And who's doing anything about that?
• 15:34
  So what's to stop them then from just charging more and more and adding extra, extra fees and putting more and more limits on what they'll pay for because all of that stuff benefits them.
• 15:45
  What's to stop them from being greedy?
• 15:47
  Because health insurance companies have very much used this concept of our like, theoretical greed.
• 15:52
  For their own very greedy purposes, okay?
• 15:54
  And remember, all.
• 15:55
  All that they have to gain and all that they have to lose in this scenario is money, okay?
• 16:00
  For patients, there's much, much, much, much more at stake.
• 16:04
  Because, like, who really thinks that, like, because you have health insurance or you're, like, more likely to jump off of a bridge and, like.
• 16:10
  Like, because you think it's not gonna.
• 16:11
  Because you think someone's gonna pay for your healthcare when you do, like, it's a little bit absurd, okay?
• 16:15
  And honestly, I feel like the same is true to a large extent for doctors because of this.
• 16:20
  Like, if you understand our profession, our whole identity and livelihood as a profession is founded on the idea that we can be trusted to act in our patient's best interest.
• 16:32
  And so to me, like, the whole concept of prior auth, it just automatically calls that into question.
• 16:39
  And I'd say that doctors have actually quite a lot to lose through unscrupulous practices.
• 16:44
  That is.
• 16:44
  Is not just about.
• 16:46
  It's not just about, like, the money, okay?
• 16:48
  Like, it's about.
• 16:49
  It's just about so much more than that for doctors.
• 16:53
  So I will say a lot of the consequences of the prior auth system, I would say, arguably fall into the unintended category.
• 17:00
  Or like, at least you could argue that they're not the harms that were like, that they're not harms that were specifically intended by health insurers.
• 17:08
  And that's because a lot of it actually kind of appears through administrative burden that comes with enforcing these policies and with applying these policies.
• 17:17
  Because all this prior stuff, this is actually what is, I think, most corrosive about it, or I guess malignant about it.
• 17:24
  To.
• 17:24
  To not mix my metaphors, is that all of this stuff takes so much extra time and work and energy, and that is not benign.
• 17:33
  Like, all of that has a cost, particularly I think, the time, because you are, when you have, like, these prior auths absolutely delay care.
• 17:40
  We'll talk about a little more detail shortly.
• 17:42
  But, like, they.
• 17:43
  They absolutely cause harm in all these different ways, some of which are not just because you're denying a more expensive treatment, it's just because you're delaying them getting any treatment at all.
• 17:52
  So if prior auths.
• 17:54
  If prior auths could be processed, like, instantaneously, that you just press the prior auth button and you, like, find out.
• 18:00
  I do think that that system would harmful than what we have now.
• 18:04
  So one question you could reasonably ask is, like, first of all, does this prior thing even work?
• 18:08
  Like, is this even a good idea?
• 18:10
  And I was a little.
• 18:12
  I, I looked into this for this podcast because I honestly wasn't sure, and I was a little surprised that it wasn't a more robust literature on this, actually.
• 18:19
  So the evidence is more kind of mixed and spotty than you might think.
• 18:23
  And I think it really comes down to the fact that, like, if you're going to study this, what you need to show is that these, that these policies, prior authorizations, you need to show that it saves money without
• 18:35
  have any consequences for outcomes.
• 18:37
  So you need to show that, like, you save money and the people are exactly as healthy as they would have been otherwise.
• 18:42
  That's a tough bar.
• 18:43
  And the other thing is, like, if you did have a study that showed that people weren't as healthy, like, would you publish that?
• 18:48
  I don't think so.
• 18:50
  It's a really, It's a tough line to walk if you're on this line of work.
• 18:53
  So the study that gets pointed to most often is from the National Bureau of Economic Research.
• 18:57
  And they basically did this analysis, analysis showing that in Medicare Part D, so looking at drugs, specifically, prior auths cut utilization of restricted drugs by almost 30%, like 26.8, and that that reduction in use of those Drugs saved
• 19:13
  about $96 per beneficiary year without any statistically significant effect on outcomes.
• 19:20
  So, like, that's it there, there's, you know, that's the study.
• 19:22
  Like, it's, you know, it's, again, it's, it's honestly not surprising to me.
• 19:25
  Like, of course they save money and, like, I'm glad they could at least find that in some cases it's not harmful.
• 19:31
  The issue here is, like, the consequences of these policies are really hard to measure because a lot of what we're.
• 19:36
  There's no control group, and a lot of what we're measuring is, like, delays in care and just things that are going to be difficult to capture.
• 19:43
  So just to make sure, I just want to make sure you have, like, an idea of the scope and the impact of prior auths and what they have wrought upon our healthcare system.
• 19:51
  So let's go.
• 19:51
  I've got some numbers for you.
• 19:54
  These are mostly from this survey from the AMA in 2025, looking at physician experiences with prior auths.
• 20:02
  What they found is that physicians complete an average of 40 prior authorizations per week, and that those 40 auths take about 13 hours of physician and staff time every week.
• 20:15
  So this is, we're talking like, this is approaching a halftime job here.
• 20:19
  40% of practices employ dedicated staff that only work on prior auths so think about that.
• 20:26
  An entire person's paycheck going into just dealing with prior auths.
• 20:30
  95% of physicians say that prior auths delay access to necessary care.
• 20:35
  So that's basically all of us saying this is delaying access to care that your patients actually really do need.
• 20:42
  And then 92% say it negatively affects their clinical outcomes.
• 20:45
  So almost the same 32% of these physicians surveyed said that requests are often or always denied.
• 20:53
  And then 74% said denials have increased over the past five years.
• 20:59
  26% reported that prior US had led to a serious adverse event.
• 21:03
  So a hospitalization, major disability, or even death that these doctors surveyed were attributing to prior offs and the delays that they caused.
• 21:12
  That is, that is a scary number.
• 21:16
  And then 79% said that patients that they have in their treatment group have abandoned treatments altogether because this process is so burdensome.
• 21:27
  Not all payers are like, equally as, as bad about this process or as equally as egregious in their use of prior auths and like, kind of how they are weaponizing them against us.
• 21:37
  But you'll be shocked to hear United Healthcare was ranked in this survey as being the highest in terms of the burden of their prior auth system, followed by Humana and then Anthem, Aetna, Cigna, and then Blue Cross Blue
• 21:52
  Shield performed the best based on, you know, at least on this survey.
• 21:55
  Okay.
• 21:56
  Another thing that's important to point out about this is like, it's not that doctors are making a bunch of like, insane requests or things that they know are going to get denied.
• 22:05
  In a lot of these cases, denials actually conflict with that specialty's own guidelines.
• 22:10
  So there's one survey that I looked at, for example, the cardiology literature is good for this because they just have, like, very clear guidelines for stuff.
• 22:17
  So one of their surveys showed that 78% of cardiology denials conflicted with acc appropriate use criteria.
• 22:24
  So that's their own group's criteria for what is reasonable and appropriate use than like clinically evidence based.
• 22:32
  And what sometimes gets used as like, an explanation for this or as an excuse is that a lot, A lot of those, if you appeal, it will ultimately get approved.
• 22:41
  But like, to me, that doesn't make it okay.
• 22:43
  Like, it's just the, the actual.
• 22:44
  The delay is the point.
• 22:45
  The delay is itself harmful too.
• 22:49
  Now let's talk a little bit about how we got here.
• 22:51
  So as I've said before, I am no historian, but I do think that understanding the origins of some of these ideas can be useful just in like showing you how it fits into the larger conversation we're having about
• 23:03
  loss of trust and loss of confidence and faith in the relationship between doctors and patients.
• 23:08
  Okay, so as we often have done so far, we're going to go back to 1965 when Medicare and Medicaid came on the scene.
• 23:15
  So 1965, Medicare, Medicaid launch and as you can imagine, you start paying for people's healthcare, they start using it, so spending starts going up.
• 23:23
  So as part of that, in response, Medicare developed this utilization review system to basically just kind of look at the, the, at the spending, look at the data and say like how are we going to like what are
• 23:33
  areas where we can control costs?
• 23:35
  But there's still at this point wasn't anything like prior auth where like that approval has to happen before the healthcare itself happens.
• 23:43
  The first sort of like kind of version of this probably comes from Blue Cross.
• 23:48
  So if you remember from our earlier episode, Blue Cross, Blue Shield, Blue Cross is the hospital's Blue Shield is the physician.
• 23:53
  So Blue Cross plans during this kind of time period started requiring physicians, physicians to justify certain really high cost things like extended hospital stays using this language of it has to be medically necessary.
• 24:06
  So early on it was really about targeting like the most expensive things.
• 24:09
  So like really high cost procedures, really long hospital stays.
• 24:13
  And in general how this would work is that the doctor, like if you have a patient who's getting really expensive and it's getting flagged by the insurance, the doctor could just call the plan's medical director and just like
• 24:23
  they could just talk it out man to man.
• 24:25
  You know, I think it was mostly men back then.
• 24:26
  Private insurers were still though doing that in a like post, post, talk away or like once things are already underway.
• 24:31
  It wasn't until the 1980s when private insurers first started using like that's, that was kind of the very earliest prior auth.
• 24:39
  So when you're actually using it before the healthcare is administered, not through chart review after.
• 24:45
  And it's important to remember like all this stuff.
• 24:47
  This is not so this decision in the 1980s where they, or this time when we first started seeing prior auths emerge, this was not, there was not a law, there was no act of Congress, there was nothing that
• 24:56
  like you can point to that was like, oh, oh, this happened and then they were allowed to do that or like this happened and they're, they started doing it in response to it.
• 25:03
  No, no, no.
• 25:04
  These are just private companies making policies and changing their policies over time without any kind of oversight from anybody else.
• 25:12
  They just started changing the rules and nobody stopped them.
• 25:16
  So in the 1990s, 1990s is like, that is the managed care era.
• 25:19
  Like it goes from being sort of like a sideshow that was like working in certain contexts to being like hmo.
• 25:25
  Enrollment was like, likes going up really high.
• 25:28
  So when you, when you go from having this HMO thing being kind of niche to being like a huge part of our healthcare system, then you're looking at a different problem because now you gotta control costs at a
• 25:36
  bigger scale because you have like much more adoption.
• 25:38
  So prior Auths, which had previously been like sort of this more select, like special case thing, Prior Auths suddenly start being applied to much more common things.
• 25:48
  So instead of it just being like, you know, the super, super sick people, it started to be like, oh, we're going to do it for imaging, we're going to do it for specialist referrals, we're going to do it
• 25:57
  for medications.
• 25:58
  Medications have become a huge, huge kind of area for prior Auths.
• 26:04
  So at this point when it's gotten to be this much bigger volume of patients, now we're looking at, it's generating thousands of requests a week instead of the maybe like rarer dozens or so that happened before.
• 26:15
  So while in the early days it kind of worked because like you, the doctor, if you had a patient that was super expensive, you know, you're just like, you call up your buddy, you talk it out like, and
• 26:23
  it's, it's like a, it's like not a usual thing.
• 26:25
  It's not happening every week.
• 26:26
  It's like a very unusual circumstance.
• 26:28
  And you, you figure it out together.
• 26:29
  You know, that is, that is not what's happening anymore.
• 26:32
  Now it goes from that to just it being this incredibly insane bureaucratic machine because prior Auths are now just becoming a normal part of the workflow and the work stream of how healthcare is getting done.
• 26:45
  So there, there's a lot of backlash to the whole HMO concept.
• 26:48
  Like, we're not going to get into that right now.
• 26:49
  Maybe we'll do a future episode.
• 26:50
  But anyway, anyway, let's put that aside for now.
• 26:53
  Just leave it at this was not a super popular approach in general.
• 26:57
  And I think HMOs in a lot of ways like that, like, at least the name of what that is has mostly gone by the wayside at this point, but prior Auths have definitely survived.
• 27:07
  So if you look at like healthcare in the like late 90s, 2000s, up into the 2010s, this whole era was Very focused on the idea of modernizing healthcare, mostly through use of computers.
• 27:20
  So, like, electronic health records became a major priority.
• 27:24
  We had the set of electronic standards that were meant to make it easier for everyone to get onto electronic health records.
• 27:30
  And this has been like a huge success.
• 27:32
  And what's crazy about it though, is that while all of those records went online, by 2022, only about 28% of prior auths were actually moving through an electronic system, which is kind of crazy.
• 27:46
  Like in an era where like literally everyone is on emr, that's like the, you know, the prior.
• 27:51
  It's.
• 27:51
  It doesn't serve them.
• 27:52
  And so they are not there.
• 27:54
  And so not only, it's like, not only that, it's not a standardized electronic system.
• 27:58
  It's still fax, it's still phone, it's still like a payer setting up their weird specific web portal that works for them.
• 28:05
  Each of these payers out there, and they, they can like, build their own proprietary system.
• 28:09
  They can set their own criteria, they can have their own forms that someone has to sit there and like, fill out each time like they're there.
• 28:15
  Well, there's been a lot of, I would say arguably a lot of success in standardization and medical records.
• 28:20
  That standardization has not at all happened on the payment side.
• 28:23
  And it was kind of supposed to.
• 28:26
  So at this point, we have a.
• 28:27
  The system where we have like, there's an entire workforce that is devoted just to this issue of how do you process prior auth?
• 28:35
  Like the idea that 40 of practices now employ at least one person whose entire job is to do prior auth.
• 28:40
  This is insane.
• 28:41
  Okay, okay.
• 28:42
  There's also all these other players.
• 28:44
  Like, there's these like, utilization criteria, like systems that get licensed out by different third parties.
• 28:50
  There's whole other, like contractors and companies that are all just built around, like, solving this problem in a very expensive way.
• 28:58
  And all of them are just adding to just like more and more steps, more and more distance, one more wedge between the physician and the patient and the care that the physician is recommending for that patient.
• 29:11
  So it started out as being like, hey, dude, your patient's been in the hospital for six weeks already.
• 29:16
  Like, what's going on has now become this huge bureaucracy that is just built to second guess everything the physician's doing and has no incentive to give the physician an answer in any kind of timely or efficient manner.
• 29:31
  So at this point, roughly 1 in 4 drugs on the Medicare Part D formulary.
• 29:35
  So that's the, you know, that are covered by Medicare, require prior offer costs 1 in 4 and 80.
• 29:41
  Like I'm not gonna.
• 29:42
  We may do an episode as well on, on Medicare Advantage plans.
• 29:44
  But Medicare Advantage, as you hopefully know, is basically like Medicare administered by private health insurers.
• 29:50
  And if you're in a Medicare Advantage plan, 80% of those plans require prior auth as well for some non prescription services, whereas traditionally like fever service, Medicare has historically used like very few of these prior.
• 30:03
  Awesome.
• 30:03
  Which is part of why people really like Medicare care.
• 30:06
  Okay, so where do things stand now with prior auths?
• 30:08
  Prior auths are so bad, like so like so much of a problem like that even the health insurance companies themselves have started to acknowledge it, which is, it's pretty shocking honestly, if you think about it.
• 30:21
  So let's talk about some of what's going on here that I think is worth keeping our eyes on in this kind of environment.
• 30:28
  So in June 2025, AHIP, which is like the, you know, big trade group for health insurers, they put out a statement publicly pledging that they were going to work as an industry towards cutting prior auth volume across plans
• 30:42
  over the next year.
• 30:44
  And this is what I mean.
• 30:45
  Like when you have an industry that's saying like, hey, we hear you, we got a problem, we're gonna do something about it, like, it's a big deal.
• 30:52
  My interpretation at least is it means they've realized that this is like potentially untenably unpopular at this point.
• 30:59
  So as of the last kind of report we have on this is April 20266 and they'd made some progress, but it sounds like they, according to their own reports, collectively eliminated 11% of prior auth requirements, which, like, you
• 31:12
  know, anything is good, but like, I certainly think we could do better.
• 31:16
  And just to be like kind of clear and fair on this, like, y' all know where I stand.
• 31:19
  But I, I do think that prior auths potentially could have a role.
• 31:24
  It's just that like the way they've been implemented and how extensively they've been applied to so many things, like that's the problem.
• 31:30
  And so there, there is at least one survey I've seen where they talk to physicians about prior auth.
• 31:34
  It showed like 65% of physicians do agree that prior us have a legitimate role specifically for flagging super low value care.
• 31:41
  So like you do not want to, if we've got an ER doctor somewhere who's ordering an MRI on every like ankle.
• 31:46
  Boo boo.
• 31:47
  Like that's we.
• 31:47
  That is a problem.
• 31:48
  Like we, we should probably stop that.
• 31:50
  But there's a big difference between that and this kind of insane system now where we have entire people, people's whose like job it is just to fight with insurance companies over care, that is perfectly reasonable.
• 32:03
  So as I mentioned at the top, this is, it's finally come from Medicare.
• 32:07
  Like I, I cannot kind of can't believe it honestly.
• 32:09
  Medicare has been safe from prior AUTH stuff for a really long time.
• 32:13
  But it's finally, this prior AUTH idea has finally breached the barrier.
• 32:18
  So CMS again this is not happening in Congress or anything.
• 32:20
  This is policies that are happening at the level of CMS itself.
• 32:24
  So CMS has this program called Wiser.
• 32:28
  Wasteful and Inappropriate Service Reduction Wiser.
• 32:30
  I wonder how long it took them to come up with that acronym.
• 32:33
  So they have this new model, the Weiser model.
• 32:36
  This was launched in January 2026 as a pilot project in six states.
• 32:40
  That's Arizona, New Jersey, Ohio, Oklahoma, Texas, Washington.
• 32:43
  If you're in one of these states for sure you need to pay attention to this.
• 32:47
  So their argument is that this is a plan that's supposed to help Medicare reduce use of elective services in order to reduce cost costs.
• 32:55
  So it's targeting specific things like nerve stimulators, epidural steroid injections.
• 33:01
  There's a lot of wound care stuff.
• 33:02
  So like debrisment of like lower extremity wounds and use of skin substitutes.
• 33:06
  So certainly relevant to plastics also like elective surgeries for sleep apnea.
• 33:11
  There's this whole kind of long list of things that they view as like, like expensive and potentially being overused.
• 33:18
  But what's interesting about this system and a little bit I think like, you know, concerning for the future is that the people who are going to be making the decisions like that are going to making those prior Auth
• 33:28
  calls are not people, they are basically AIs.
• 33:33
  So the idea here, there's six outside tech companies that they're using that are using these like elaborate kind of systems that are supposed to make these coverage determinations.
• 33:43
  And the idea is like they should be, they should, they probably should be faster because it's not going to be made by a bunch of humans, it's going to be made by this technology.
• 33:51
  But the problem is that these companies are going to get incentive payments based on how much spending they prevent.
• 33:58
  So basically these people who are in this wiser program, these tech companies are building tools that are designed specifically to reduce use of care and that actually get incentive payments when they prevent people from getting treatments that their
• 34:13
  doctors recommend.
• 34:14
  So like to me this is like, this is bad, like Come on, y'.
• 34:16
  All.
• 34:16
  Like, we're in the bad place.
• 34:17
  This is not.
• 34:18
  This is.
• 34:18
  This is really dark stuff.
• 34:21
  So Congress actually did try weekly, briefly, and ultimately ineffectively to stop this.
• 34:27
  There was briefly in, like, I think it was like a cr or something.
• 34:30
  Some point.
• 34:30
  There was.
• 34:30
  There was like an amendment to block funding for this because people recognize this is, like, a little bit insane.
• 34:37
  But ultimately it did not get passed.
• 34:40
  So, like, this is.
• 34:41
  I think this is where we're headed now is like, we're not even.
• 34:43
  We're just going to even further abstract responsibility away from any of the insurers and say, you know, oh, like, so they can just say, oh, it wasn't even me.
• 34:51
  It was the AI computer that did it.
• 34:53
  And so, I'm sorry, we don't have to pay for this.
• 34:58
  And I think how they'll get away with it is, like, kind of.
• 35:00
  Like I was saying, a lot of the harm of prior us actually comes from the time loss, like, how much of a delay there is.
• 35:06
  And so probably these determinations will be faster.
• 35:08
  Like, God, I hope they are.
• 35:10
  But it's still a little bit dark, I think, to think that we're going to have an AI tool that's going to make a determination without any doctors being involved and say, like, oh, we've decided that, like, your patient
• 35:22
  that you want to have this, they can't have it.
• 35:25
  It's just really hard.
• 35:26
  Like, if we step back, like I thought the point of being in this industry and like, if you talk to people in health insurance, they.
• 35:31
  They talk that same game about this all being about taking care of patients.
• 35:36
  But, like, how.
• 35:36
  How could you possibly think that this system is going to help take better care of patients?
• 35:42
  You're literally incentivizing tech companies to.
• 35:44
  To deny care to people.
• 35:48
  And remember, they're never going to look that person in the face.
• 35:50
  You are you the doctor.
• 35:52
  You're the one who's going to look at them.
• 35:54
  So I really wish.
• 35:55
  I wish that I could close out this episode with, like, something more hopeful.
• 35:59
  I realized that this series has been probably a little bit on the dark side, but I.
• 36:04
  I really.
• 36:04
  I just think, if anything, I think we're not dealing enough with how bad it is, like, how unacceptable this has become.
• 36:11
  The system that we had set up, that our, like, doctory forefathers set up was for this to be an industry that regulated itself.
• 36:18
  And I think because of that, our industry fought really hard against government regulation.
• 36:25
  And I think what we see now has happened is even though it's not necessarily the government.
• 36:32
  Other people have stepped in.
• 36:33
  Like, we.
• 36:33
  We have very much lost control.
• 36:35
  We've lost the ability to really be the decider for our patients.
• 36:39
  And we're certainly, I think our industry is for sure, in part responsible for that and, like, should take ownership of it because.
• 36:44
  Because I do think that we've failed to advocate as a block for doctors and for maintaining with the same level of ferocity as her forefathers did, like this, this critical, this professional sovereignty that this is our world, that
• 36:58
  we make the rules, because at this point we don't.
• 37:01
  Okay, like, the health insurance company gets set aside.
• 37:04
  And so I don't have any great answers.
• 37:06
  Honestly.
• 37:06
  I think there's a lot of things that would make prior auths better.
• 37:10
  I think.
• 37:10
  I think one of the most kind of obvious ones that would just be, this is just an incremental solution.
• 37:14
  This is like, I.
• 37:15
  I think that we need to just.
• 37:17
  We need to throw all health insurance away and start over and just like cleansing fire this whole deal.
• 37:21
  But, you know, don't vote for me for president.
• 37:24
  But I will say that I think if these prior auth determinations were made, like, by the specialty societies, instead of being this, like, insane system where these random companies just get to decide unilaterally and individually by themselves what
• 37:38
  they think is qualified or not, like those standards that they're.
• 37:41
  They're referring to when they make those decisions, those at the very least should be coming from the specialty societies.
• 37:47
  So it should be like, you know, know, cardiology is like, these are the rules.
• 37:50
  And like, this is what we think is reasonable to pay for.
• 37:52
  And like, that should be what people are pinging off of.
• 37:55
  Because if that were more standardized for each profession, that at the very least would make things a lot, I would think, a lot more seamless and a lot more reasonable and a lot more predictable for the doctors so
• 38:06
  that they don't have to spend all their time chasing their.
• 38:08
  Chasing stuff down on this.
• 38:11
  I also do think it's, like, it's completely unacceptable that this stuff is not yet digitized and standardized.
• 38:17
  Or like ahip, if you want to do something like ahab, that health insurance trade group, they should, you know, if.
• 38:23
  If they were really trying to make this better, they should be getting all of those health insurance companies to accept the same forms.
• 38:29
  Like, we could totally.
• 38:30
  This can totally be standardized, y', all, and it's not.
• 38:33
  And part of it is talk about incentives.
• 38:36
  The health insurance company has no incentive to make it easier for you to get paid or for you to provide care to your patient.
• 38:44
  They're just by nature, they're positioned as your.
• 38:47
  As your enemy, basically, like their who.
• 38:49
  Their goal is to not pay you, and because you're required to work with them and they get to make the rules.
• 38:55
  Like, they don't, you know, I also think the helpful people out there, which is not me, I guess, would tell you, like, there's all kinds of things you could do with your documentation, with your system to try to,
• 39:06
  like, improve the chances that the care that you give to your patients will be paid for consistently.
• 39:12
  But to me, I think one thing that I think is missing and one thing that I.
• 39:16
  I do when I talk to patients is you need to make it clear to your pat, if they're not getting the care that you want them to have, you need to make sure the patient realizes that it's because
• 39:27
  of the health insurance.
• 39:28
  Because one thing that really grinds my gears is I think a lot of times patients end up thinking that it's the doctor's fault because they'll go to their health insurance, and the health insurance will say, oh, we can't
• 39:39
  do this because your doctor didn't fill out the right paperwork or whatever.
• 39:42
  And, like, that's not true.
• 39:43
  That's, like, totally unfair.
• 39:45
  And so when this comes up with patients, like, particularly around a certain procedure that I think they need, that they're not gonna be able to get, I tell them, like, that's.
• 39:54
  That's why this is happening.
• 39:55
  I take that role for education in terms of, like, policy and, like, how our world works.
• 40:00
  That is my responsibility too.
• 40:02
  Because, again, like, the.
• 40:04
  What the part of this.
• 40:05
  Why this matters or, like, why I'm taking the time to talk about this and why I think it's so important is I really think that we're in a state of crisis regarding the level of trust that we have
• 40:14
  between doctors and patients.
• 40:16
  And I think it's things like this that are why.
• 40:19
  Like, this is the cancer that has eaten our professional sovereignty.
• 40:22
  And, like, here it is, you know, Know.
• 40:25
  So I think the most hopeful thing now we have is, like, I do think that public opinion has swung pretty aggressively against prior auths, and, you know, if it swung so far that even the industry itself is talking
• 40:36
  about trying to, you know, regulate itself in.
• 40:38
  In some small way, I think that's a really bright spot.
• 40:41
  But I really think, like, you cannot.
• 40:42
  We cannot be trusting.
• 40:44
  Like, in the same way that they don't feel like they can trust us to do the right thing, I certainly can't trust them to do the right thing.
• 40:50
  And so I really do think that we need some major changes in in law.
• 40:54
  Like we need to, like this needs to be something that comes from on high.
• 40:57
  And it's just tough because I don't know that the will is there right now.
• 41:00
  But I hope that it will be at some point.
• 41:02
  And when that happens, I hope that we can stay down with the prior auth.
• 41:08
  Like, I, I recognize that it's important to control costs and then that's part of the equation.
• 41:12
  But I just think that at this point, the idea that doctors are spending most of their time arguing and fighting for every single thing that their patients need, it's just there's no way that if we're actually as an
• 41:25
  trying to help patients, there's no way that that's what anybody wants.
• 41:30
  Thank you for listening to Cut and Tell.
• 41:31
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• 41:34
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• 41:36
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• 41:46
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