Your FAQs on prior authorization, answered: what it is, how long it takes, how to expedite it, how it impacts patients and the healthcare system, and more.
What is prior authorization?
The prior authorization process, also known as precertification or prior approval, is a cost management measure where healthcare providers must obtain approval from a health plan prior to delivery of medical equipment, services, or prescription drugs to a patient. This pre-authorization ensures patients qualify for payment coverage under their health insurance. Failure to submit a prior authorization request (PA) can lead to medical service claim denials or delays in filling prescriptions due to unmet PA prescription requirements.
To reduce delays in treatment and optimize patient care, the American Medical Association (AMA) strongly advocates for health insurance companies to minimize services needing prior authorization requirements and to implement efficient, automated processes when prior approval is required.
How do healthcare providers submit requests for prior authorization?
- Fax directly to health insurance plans: most widely available
- Telephone: useful for dialogue regarding medical history or step therapy, where health plans authorize less expensive drugs in an effort to lower costs associated with prescription medications before “stepping up” to brand-name drugs
- Multi-payer portals: single log-in allows healthcare teams to connect with multiple insurance providers
- Payer portal: connects directly with insurance company to obtain electronic prior authorization
- Standard electronic transactions: often integrated into the electronic health record/EHR and is a standardized process used across health plans
How long does prior authorization take?
Taking into consideration the complexity of a prior authorization request, the prior authorization process selected by a healthcare provider, requirements set out in individual health plans, and any subsequent appeals process, a prior authorization (PA) can take anywhere from same day to over a month to process.
Fax directly to health insurance plans
- Forms are filled out manually and are time-consuming
- PA may be delayed as a result of additional information requested
- Healthcare providers may not be informed if a drug PA is approved
- Long hold times are common
- Still requires documentation to be faxed
- Approval for prescription PA must be forwarded to the pharmacy for dispensing
- Generally outside of electronic health record system
- Data must be typed onto web forms
- Generally outside of EHR system
- Clinic must log in to each health plan website
- Data must be transferred from EHR onto web forms
- Many payers require faxed forms for prescription PA
Standard electronic transactions
- Pharmacies may not subscribe to ePA solutions
One factor influencing the speed of authorization approval is how well a provider’s office notes are written. Local Infusion works closely with the provider to ensure there are complete notes so patients can get approved more efficiently.
“When the provider’s notes list things like previously tried and failed medications, the state of their disease, it helps to meet the policy and authorization requirements without having to request additional records or information, which could potentially delay the process,” explains Shauna Moran, Infusion Guide at Local Infusion’s Concord center.
Based on the 2022 American Medical Association survey on abandoned or delayed treatment due to prior authorization (PA):
- 33% of physicians report that the prior authorization (PA) process has led to a serious adverse event for a patient in their care
- 25% of physicians report that PA has led to a patient’s hospitalization
- 19% of physicians report that PA has led to a life-threatening event or required intervention to prevent permanent impairment or damage
- 9% of physicians report that PA has led to a patient’s disability/permanent bodily damage, congenital anomaly/birth defect or death
To help expedite and get patients approved as quickly as possible, our dedicated Infusion Guides leverage our digital-first system to stay on top of the process.
How prior authorization impacts patients
Wait times in receiving pre-authorizations from health insurance providers create delays in patients accessing medical services and is a leading factor in prescription drug requests being rejected at pharmacies.
A formulary provides the names of generic and brand name prescription drugs covered by a health insurance plan. Non-formulary drugs are generally brand-name, expensive medications. In an effort to lower costs, health insurance companies may use step therapy to approve a cost alternative drug for your medical condition, but this isn’t always easy.
“Payor step therapy requirements are tough,” says Shauna. “We often have the provider change the medication to the insurance’s preferred drug. If the provider wants to push for the ordered medication, we may need to submit the authorization for this, get the denial, and then submit a Letter of Medical Necessity to appeal to the payor for approval of the original drug requested. All of this can delay patient care tremendously, so we do everything we can to make sure things stay on track.”
The American Medical Association (AMA) is focusing advocacy efforts on the implementation of electronic prior authorization (ePA) technology to reduce the burden placed on physicians and health insurance companies, while enhancing patient access and health care services.
The Centers for Medicare & Medicaid Services (CMS) further supports the prior approval process by proposing payers provide precertification responses within 72 hours for urgent requests and seven calendar days for standard preapprovals. This cuts in half the number of business days as the existing Medicare Advantage response time.
How prior authorization impacts the healthcare system
Prior authorization processes create an administrative burden and strain on the healthcare system. Healthcare providers report current methods to be time-consuming, with staff spending almost two business days a week completing prior authorizations. Prior approvals lead to increased healthcare costs through additional office visits, less effective outcomes due to step therapy prescribing requirements, emergency room visits, and hospitalization.
The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that would streamline processes related to prior authorizations in an effort to create efficiencies and improve patient outcomes.
CMS proposes that insurance providers implement an electronic prior authorization process (ePA), shorten time frames for payers to respond to PA requests, and establish policies to ensure the PA process is more transparent. These proposed requirements would generally apply to Medicare Advantage (MA) organizations.
How Local Infusion handles prior authorization
Local Infusion's dedicated guides are highly experienced in working with various insurance providers, patients and physicians. This, in concert with a digitally-streamlined process, helps to get patients through the process as efficiently as possible, oftentimes weeks faster than through other sites of care.
Within hours of a physician referral, our team will reach out and digitally onboard patients - a quick process that takes less than two minutes.
We then work with provider, patient and insurance providers to ensure that the authorization submission is as complete as possible, to increase the chances of a speedy approval. Regular updates are shared with provider and patient as the process progresses so no one is in the dark.
For questions regarding pricing and insurance, our team will work together to provide guidance on financial assistance support and help our patients minimize costs where possible.