Latest / CareTalk: Healthcare. Unfiltered. / The Hidden Costs of Prior Authorization

Transcript

The Hidden Costs of Prior Authorization · CareTalk: Healthcare. Unfiltered.

• 0:00
  David: Have you ever had your health insurance deny a treatment that your doctor says that you need?
• 0:05
  David: You're not alone.
• 0:06
  David: But there is good news, which is that people who appeal often win.
• 0:10
  David: So today you're gonna hear a little bit about prior authorization policy, but also how to succeed if you need to file an appeal.
• 0:24
  David: Welcome to Care Talk, America's home for incisive debate about healthcare, business and policy.
• 0:29
  David: I'm David Williams, president of Health Business Group.
• 0:32
  John: And I'm John Driscoll, the chairman of Yukon Health.
• 0:35
  John: David, this whole prior authorization thing, uh, is really a, uh, a cover.
• 0:41
  John: Phrase for a lot of managed care techniques and it's, folks haven't described, they haven't really, uh, don't really understand what it is and why it's there.
• 0:50
  John: Maybe you could sort of explain it.
• 0:52
  John: 'cause what is prior authorization?
• 0:55
  David: Well, John, just as, as I'm thinking about it, I'm actually thinking the term may actually redundant 'cause it's here gonna get authorized to do something where it's gonna get authorized prior to doing something.
• 1:06
  David: So it's a term John, which says, okay.
• 1:09
  David: Insurance gives you certain benefits, but then to use some of them, you need to get prior authorization.
• 1:15
  David: You need to ask for permission and make sure that, uh, it's allowed and it's really done, uh, for the insurers to try to control spending.
• 1:25
  David: So let's say they don't want you to do something expensive without having to jump through some hoops to do it.
• 1:31
  John: I mean, I, I think that it's sort of, it's ironic that it's prior authorization when if you need a prior authorization, they're probably looking to deny it.
• 1:40
  John: So it's, it's, it's that, that I think is the, the, but, but you know, it was a reasonable concept when the h, when the health management organization is, the original health management organizations were created to reduce costs to, to kind of help create healthcare in a budget, to move away from indemnity care.
• 1:58
  John: Where they pay historically paid for everything.
• 2:01
  John: They used the ability to channel decisions around very expensive medical procedures like organ transplants, um, like, uh, uh, experimental therapies around, uh, for, for people who were really sick to determine whether they were medically necessary and clinically appropriate and would be honestly worth the ROI, I mean the, the classic example being someone who continues to get chemo, who's in a, a dire.
• 2:27
  John: Terminal state where you're costing the health plan money and putting the patient through an unnecessary amount of pain and suffering that that could be avoided.
• 2:35
  John: It, it proliferated after the, in the seventies, into the eighties and nineties, as managed care organizations realized that the more.
• 2:43
  John: Whether intentionally or unintentionally, the more hoops you put out that, that doctors and patients had to jump through, uh, the lower the cost trend.
• 2:51
  John: And so it started to pop into things like basic specialty referrals where your internist is want, it's to refer something out, or diagnostic tests or services that the, the, the, the pa that, that the plan.
• 3:05
  John: Might have not liked 'cause they were expensive, but the patient or the employer actually needed.
• 3:10
  John: And that's, and then that's created a lot of friction and probably adds pretty materially to the administrative costs that represent the 20% excess administrative costs that you in the US pay versus.
• 3:24
  John: Other systems around the world.
• 3:25
  John: So prior authorizations are a very big deal, but they've also been historically a black box.
• 3:31
  John: And so maybe you could unpack, give for patients, employers, and payers today, what's the state of play and, and, and like, how would a, as a, what's the, what's the patient path to actually get the authorized authorization that they need to get the care they, they deserve?
• 3:49
  David: That's right John.
• 3:49
  David: You know, it used to be a kind of the exception and now it's more of the overall flow.
• 3:53
  David: Um, it has evolved.
• 3:55
  David: I remember we talked about like electronic prior auth, so it went from faxes where you're literally filling out, you know, paper and faxing it in to more of an electronic version of that.
• 4:05
  David: The same way a, a claim might be submitted.
• 4:08
  David: Electronically that basically this happens, uh, often in a time where someone's sick and needs something and there's some time sensitivity to it.
• 4:16
  David: And so in addition to it being costly for the provider.
• 4:20
  David: Uh, which is clearly measured and results in, you know, extra staff costs through labor costs.
• 4:26
  David: It's, it's expensive to the patient as well 'cause they have to take a lot of their time often to deal with it and the stress of it.
• 4:32
  David: But the, the current flow is usually.
• 4:36
  David: Sort of like electronic versions of faxes.
• 4:38
  David: Now what's coming in with this more technology?
• 4:41
  David: You know, nobody actually wants to look at anything on, on either side.
• 4:44
  David: So there's more of a kind of a robotic approach as well, especially on the uh, side that's receiving the prior authorization request.
• 4:51
  John: Just to strip it down.
• 4:52
  John: What the managed care company will want is more clinical detail and what the and and I, and ideally on the managed care side, they've then got an algorithm or a logic.
• 5:03
  John: Usually overseen by a clinician, but not always to resolve the the question, the challenge.
• 5:10
  John: The more data and the response to get the patient the care they need.
• 5:14
  John: Historically, when when prior AU started, it was all physician to physician consult, and then it became physician or physician staff to nurse, and now it's gone from physician data.
• 5:27
  John: To managed care algorithm to your point, but there's still plenty of faxes and it is a clumsy, time consuming process.
• 5:34
  John: And to your point, from a patient perspective, it's a black box.
• 5:38
  John: And so if you're a patient that's being required to or told that, hey, at a servicer, a referral, or a drug is delayed until it's authorized.
• 5:49
  John: What's a patient supposed to do?
• 5:50
  David: Yeah.
• 5:51
  David: Yeah.
• 5:51
  David: So usually in my family, people call me and say, what am I supposed to do?
• 5:54
  David: So what?
• 5:55
  David: So what can you tell 'em so I can, I can
• 5:57
  John: tell them that that's a bad idea, David.
• 5:58
  John: Yeah, that's a, should just call somebody else.
• 6:00
  David: So you call 9 1 1, right?
• 6:02
  David: Hang up and call 9 1 1.
• 6:04
  David: So one of the things to do, John, is actually to work with your medical provider, so a physician's office.
• 6:10
  David: So you'll, you'll get something and say you need prior authorization for this drug.
• 6:13
  David: I've had this, you know, with my, with my family.
• 6:15
  David: And physician office usually may have a care manager, for example.
• 6:19
  David: So if you actually work with them, they can help to put together whatever information you need because.
• 6:25
  David: They were the ones, the physician's office is the one that wrote this prescription in the first place or ordered this treatment.
• 6:30
  David: So they've got a rationale for it, and you've got people within the office that can, uh, that can potentially help you.
• 6:35
  David: Another one, John, is the same sort of general information that you would, you would give as a recommendation to somebody.
• 6:41
  David: Dealing with any kind of bureaucracy, which is to be very organized.
• 6:45
  David: Keep a record of everybody that you spoke with, what their name is.
• 6:47
  David: Ask for a case number when you speak with 'em.
• 6:50
  David: Not so different John, than if facing like an IRS audit or a request.
• 6:54
  David: Get your act together.
• 6:54
  David: Get all your ducks in a row and it's gonna be more efficient.
• 6:58
  David: But also, uh, you're gonna be more effective because you may have to be the glue that ties together the, uh, the, the systems.
• 7:05
  David: I have some more John, but if you have thoughts on those.
• 7:07
  John: Well, no, I, I, I would just say from a patient perspective, I think that the, one of the secrets of getting a prior auth approved is staying very close to your point with the doctor, getting to know the doctor's office staff, not just the doctor or the nurse, or the nurse practitioner who's seeing you.
• 7:21
  John: Person who's actually trying to clear this claim, they're as interested in making sure you get what you want typically as you are.
• 7:28
  John: And they know all the medical lingo and all of the requirements.
• 7:32
  John: And so while it's ideal if you get into kind of the detail of case numbers and appeals and all that stuff, and the reason why it's worth pushing for the care you deserve is, well, for example, in the case of, uh, Medicare, where a lot of these.
• 7:46
  John: Prior authorizations are in place, 82% of the appeals against denial.
• 7:51
  John: So let's say, uh, it the pro the process works.
• 7:53
  John: You, you're authorized for service, all good to go.
• 7:57
  John: Uh, the prior authorization really only comes up if you are denied or deferred service.
• 8:03
  John: And then you always have some element of a route to appeal.
• 8:07
  John: And what you should think about is 82% of the appeals on denials are overturned, um, through the appeal.
• 8:14
  John: So.
• 8:15
  John: I just think that's something to think about, which is why, you know, the, the PE people shouldn't get care delayed or denied just because they don't feel the energy or they think that perhaps the system, you know, is, is, is making a sensible choice.
• 8:29
  John: If your doctor or your clinician thinks you need something, you should push to get that.
• 8:33
  John: Get that need.
• 8:33
  John: And it is a increasingly.
• 8:36
  John: A challenge for doctors and doctors' offices, and they are very much organized to help if your patients need to lean in.
• 8:45
  John: Um, but you should also realize that vast majority of these denials, uh, when it actually is denied, are actually overturned on appeal when a, a more senior clinician.
• 8:55
  John: Sees it or there's more data provided that that's, that, that, that makes a more compelling case.
• 9:00
  John: So whenever your, if your care is denied under a prior authorizations, one of the dirty little secrets is you should push to have it appealed.
• 9:08
  David: Yeah, John, you're right.
• 9:10
  David: I mean, this is an example when we talk about, you know, hurdles to jump over, hoops to jump through.
• 9:15
  David: This is kind of what we're saying, that at the end of it, if you, if you actually do that, at the end of the day, they're gonna say, oh yeah, that shouldn't have been, uh, denied in the first place.
• 9:23
  David: And you can see that the kind of administrative burdens are put up there.
• 9:26
  David: Now, that's not to say that all of the prior authorization denials are wrong, and we don't know, you know, those that weren't appealed.
• 9:33
  David: Which would've been overturned and which, which wouldn't.
• 9:36
  David: But if you have, well,
• 9:37
  John: a a and, and as a practical matter, David, like some of the formulary re requests to, to try less invasive or expensive therapies, less dangerous therapies before you.
• 9:48
  John: Let's say get a more expensive, uh, drug that might have more side effects.
• 9:53
  John: Those are reasonable, like, you know, going go, going through a particular formulary drug, going to the less expensive drug versus the more expensive drug when it's this same chemical compound.
• 10:03
  John: I mean, there are, there are reasonable reasons for prior authorization.
• 10:07
  John: And working off of what you know, PBM or physician pharmacy benefit managers call formularies, where they try to get you to the low, less, less expensive drug that are all oriented towards making sure you're getting the care you need at a cost you can afford, but where you've got a, a treatment, a service, or a drug that you and the doctor are convinced you need.
• 10:29
  John: You should definitely get in that appeal queue as quickly as possible because the, the health plans are responsive and they need to res and, and, and they historically have been responded largely in the patients, on the patient's side.
• 10:43
  David: John, you, you cited this, uh, Medicare Advantage with 82% of denials being overturned and that, that actually points to a tip, which is to make sure you understand your insurance.
• 10:54
  David: So if you have Medicare Advantage, it's actually fairly likely, uh, through this appeal process, it will be overturned.
• 10:59
  David: Medicaid a little bit less, uh, generous.
• 11:01
  David: I think more like a third of appeals are overturned, but another well,
• 11:04
  John: but in, but in, but in Medicaid, many, many of the services are already provided, so that Right.
• 11:09
  John: It's a little bit of a looser benefit and a more expansive one.
• 11:12
  John: So that, that makes sense.
• 11:13
  David: Fair enough.
• 11:14
  David: Now, John, but another interesting angle, um, that a lot of people don't think about is that we talk a lot about employer sponsored health insurance, right?
• 11:22
  David: So the health insurer.
• 11:23
  David: Is often working for the employer, and this is even for, it used to be just very big companies that would be self-insured.
• 11:29
  David: Now it's much smaller ones.
• 11:30
  David: Also, now they outsource the administration of that plan in general.
• 11:35
  David: To somebody, but they retain the ultimate, uh, decision making.
• 11:39
  David: So if you think about employer sponsored and something is being denied, it's ultimately the decision maker is the employer if they're gonna pay for something or not.
• 11:48
  David: So it can make sense to actually go to your HR department, uh, in certain circumstances for something expensive and say, look, you know, can you help me out here?
• 11:58
  David: And they're the ones deciding whether to pay or not ultimately.
• 12:01
  John: Well, that's a really good point, David.
• 12:02
  John: I mean, if, if I had an expensive, I mean, I think, I think this is where patient you, you patient engagement and leadership and is, is absolutely critical.
• 12:12
  John: You and your family need to first, you know, partner with the physician office and the staff that's really working this.
• 12:19
  John: But the second thing you should work with is your hr, your human resources and employee benefits departments.
• 12:26
  John: 'cause they're often.
• 12:27
  John: As motivated as you are to make sure you get the care they need, and in some cases the health plans will move a little bit faster if someone from the eight, someone who's buying the health insurance for them.
• 12:37
  John: Yeah.
• 12:38
  John: Customer, the employer makes the call.
• 12:40
  John: Yeah.
• 12:40
  John: No, I think, I think that's a really good point.
• 12:42
  David: Yeah, John, I know less about this.
• 12:45
  David: Maybe you have some more insight into it.
• 12:46
  David: But, um, at the state level, there are advocacy programs, typically free assistance programs, and there's some nonprofit organizations as well.
• 12:55
  David: Uh, that can actually help, you know, if your doctor's not helping or if you're you, you're not, have employer sponsored insurance.
• 13:01
  David: I
• 13:02
  John: mean, we're really talking about, you know, the, the dirty secrets of how you can work the, uh, uh, the denial process to get the authorization for the prior authorization that you need.
• 13:15
  John: And so it first starts with working with the doctor's office.
• 13:17
  John: The second the.
• 13:18
  John: Place to work is through your employer.
• 13:20
  John: The third are state and local organizations.
• 13:23
  John: And I to your point, it does vary by state.
• 13:26
  John: In some cases, the attorney general's office have been involved in some of these questions and concerns, particularly if there's a pattern of denial that that, that they're skeptical of.
• 13:35
  John: In other cases, there's actually a, there are state, uh, sponsored.
• 13:39
  John: Advocates whose job is for people with really complex illness who are having a hard time advocating for themself working with them.
• 13:45
  John: But I think, and then there's some nonprofits to your point, but I think that, that you, you, you kind of wanna, you know, for a vulnerable patient with a chronic condition that needs care and believes they're not getting the care they need, I think you wanna be pushing forward on all fronts.
• 13:59
  David: John, I have had, uh, success in the past working with a dependent who was at school outta state and there was this, not exactly prior authorization, but like a coordination of benefits issue.
• 14:10
  David: And it was sort of getting, you know, everyone's saying, not my problem.
• 14:13
  David: It was, I'll tell you, it was, uh, in a, in a western state.
• 14:16
  David: Uh, and uh, and my plan was in Massachusetts and it was sort of like everyone was pointing fingers.
• 14:21
  David: And I contacted the insurance regulator off in that western state.
• 14:26
  David: It was, it was resolved, uh, you know, in a week because the, they regulate the health plan and they told the health plan basically get on it.
• 14:36
  David: And it was just a whole different department.
• 14:37
  David: Right.
• 14:37
  David: You're outside of customer service into compliance, uh, and government relations.
• 14:43
  John: I, I think that's, that's brilliant.
• 14:44
  John: I mean, but, but you're gonna be more creative.
• 14:46
  John: I think we want to create a simple plan for fee for, for patients that are trying to navigate this dark means of health insurance.
• 14:54
  John: And so, you know, if you can get to the regulator, but again, I would almost prioritize doctor's office, um, employer.
• 15:03
  John: Um, keep good records and then start looking for state agency.
• 15:06
  John: Yeah, if you can, if you can get to the regulator, Dave, if you've really, uh, okay.
• 15:09
  John: But I mean, again, you're, you're, you're a, you're a persistent nerd, so you're fine.
• 15:13
  John: John, you're, you're, you're, you're, you, you, you, you're more creative than most.
• 15:16
  David: I got a every person solution.
• 15:18
  David: I wanna ask your opinion about John social media.
• 15:20
  David: Sure.
• 15:20
  David: Social media.
• 15:21
  David: Should I complain on Facebook?
• 15:23
  David: Should I, should I tag him on LinkedIn?
• 15:25
  David: I see,
• 15:25
  John: I see.
• 15:26
  John: I, I, I, I see no downside to that, Dave.
• 15:28
  John: I don't, I don't like the public shaming thing in general.
• 15:32
  John: Um.
• 15:32
  John: And you've seen that in some cases health insurers have gone after people for defaming them.
• 15:39
  John: I don't know how effective that is given the fact that in general the patients are telling their own stories.
• 15:44
  John: Um, but I think if, if you go down that route, which I'm not a big fan of, but but has shown some success, you wanna make sure you're absolutely factual and you're absolutely right.
• 15:54
  John: Look, big companies make mistakes all day long.
• 15:56
  John: Uh, small companies do too.
• 15:59
  John: When it's your family and, and you're the patient, you should, you, again, you wanna fire all the ammunition you've got to, to make your case, but I just think social media has a, has a, people have a tendency to go, go a little bit over the top.
• 16:11
  John: And so I'd be probably more careful on that one.
• 16:14
  John: And if you go down that route, I'd be very, very, I would, I'd just really stick to the facts.
• 16:19
  David: John, here's the approach that I've used with some success there.
• 16:22
  David: It's actually to go on LinkedIn and just to tag the company and just say I'm having challenges.
• 16:29
  David: Uh, you know, despite a lot of effort, I'm having challenges with prior authorization.
• 16:34
  David: Can't get someone to speak with me and it will get picked up by that social media team, which is a different team.
• 16:40
  David: Then if you call or write to them and they may have a different channel, and so it's just a way of getting through the bureaucracy.
• 16:46
  David: It's
• 16:46
  John: a great, it's a great point that if you're appropriate and polite and specific, LinkedIn I think is a really good vehicle to get, get, get to, get the attention of people who can make decisions and help the patients.
• 16:59
  David: John, let's talk about AI a little bit because I, I do believe it's relevant here.
• 17:03
  David: Anything, you've got all this kind of paperwork going back and forth, all sorts of nonsense.
• 17:08
  David: Uh, it would seem that, uh, AI's gonna have a, a, a place, and it seems like it's unclear to me.
• 17:14
  David: Is it a, you know, is it an arms raise between the provider and the payer is a way of smoothing things.
• 17:20
  David: Where, where do we go from where, where's the current state and where do we go from here?
• 17:24
  John: Well, there's definitely an arms race happening.
• 17:27
  John: And it is a, you know, health insurers are.
• 17:32
  John: Looking to file, if not double digit, close to double digit price increases.
• 17:36
  John: 'cause their trends are showing, uh, their cost trends are showing that's gonna be required for them to maintain the balance sheet and that's profitable and that's gonna create some sticker shock in order to tamp down those trends.
• 17:52
  John: I think you're seeing, um, at least anecdotally a much larger number of denials.
• 17:58
  John: Um, and new policies associated with keeping those trends, those higher cost trends down.
• 18:04
  John: So the payers are investing in technology to look for places where they can defer, deny, or avoid care.
• 18:15
  John: You've got patients and patient advocates, um, and, and, um, particularly on the physician side.
• 18:22
  John: Who are trying to do the right thing for patients submitting and hospitals do submitting these bills.
• 18:28
  John: And they're also investing in technology to get more cash to them paid faster, more appropriate services covered and compensated for.
• 18:38
  John: And so you see investments in advanced technology on both sides in the electronic medical record field, uh, in the revenue cycle field.
• 18:48
  John: As well as in payer systems.
• 18:50
  John: So I do think you, you are currently got an arms race.
• 18:52
  John: Um.
• 18:54
  John: I think that can be a little bit of a distraction.
• 18:56
  John: Both sides are blaming ai.
• 18:58
  John: I do think we've got, uh, a sicker and more complex patient mix that's costing more.
• 19:05
  John: You've got the, the erosion of the a CA subsidies and a lot of people being very vulnerable, people being thrown off of Medicaid, um, soon.
• 19:14
  John: Um, as well as a continuing erosion of the.
• 19:20
  John: Economy, um, particularly for the, uh, uh, poor and the lower middle class because costs continue to rise.
• 19:28
  John: Um, that makes people are deferring care until they get really sick.
• 19:33
  John: Uh, I'm, my, my hypothesis, so I, I do think you're, you, the, the core things that are driving peop making people sicker and driving costs up.
• 19:43
  John: Um.
• 19:44
  John: Is really what's going on, but both sides are investing in artificial intelligence.
• 19:48
  John: But you know what's interesting, David, is that I do think this administration, particularly, uh, commissioner CMS, uh, administrative CMS memo, Oz, is Dr. Oz is really trying to.
• 19:59
  John: Leverage technology to lower those points of friction.
• 20:03
  John: You know, as a former cardiac surgeon, he feels very much the burden of having had to clear all of those prior authorizations for really sick folks with heart disease.
• 20:14
  John: And I think he's starting to broker.
• 20:17
  John: Uh, if not peace, at least practicality between the health plans and the technology providers and some of the physician organizations to come up with ways that, look, you can keep your prior authorizations, but it's gonna be automated, simpler, and it's gonna cover fewer of the more expensive categories so that it isn't, it's less of a, a burden for everyone who's trying to get more expensive care.
• 20:40
  John: It's only appropriately applied to where it's gonna improve care.
• 20:44
  John: And avoid unnecessary care.
• 20:47
  John: And so I do think there's a, the, the bad news about AI is right now, it's just, I think, gonna add to more administrative friction in the short term.
• 20:54
  John: But this administration's actually trying to broker some innovative policies to, to solve for that and which would hopefully lead to lower physician and patient burden and faster compensation for docs in hospitals.
• 21:08
  John: And that, that, that's the hope at least, because with technology, you should be able to get there faster, simpler, and cheaper.
• 21:14
  David: John, I like ending it on a, a positive, but I also believe realistic note, I think with, you know, Congress essentially sidelined the uh.
• 21:23
  David: Executive branch taking a, a, a bigger role.
• 21:26
  David: It's good if you've got somebody like Dr.
• 21:26
  David: Oz who actually sees this as a priority and understands it well enough, not just from the kind of payer standpoint which CMS is, but also from the provider side.
• 21:36
  David: That coupled with technology, uh, you know, gives us some reason to be, uh, hopeful and, and at least, uh.
• 21:42
  David: Put some, uh, put some pressure in that direction.
• 21:46
  David: Well, that's it for yet another episode of Care Talk.
• 21:48
  David: We've been talking about prior authorization and, uh, related factors.
• 21:54
  David: I'm David Williams, president of Health Business Group,
• 21:57
  John: and I'm John Driscoll, the chairman of U Yukon Health.
• 21:59
  John: If you like what you heard or you didn't, and if you love you to subscribe on your favorite service.