How to Eliminate the Prior Authorization Burden in Cancer Care

Moving beyond traditional prior authorization can save the health care system billions each year.

Sitting in front of Bernard Poiesz is a familiar sight: a pile of insurance paperwork. Before he can treat a patient with non-Hodgkin’s lymphoma, he has to write an explanation for every therapy in the treatment regimen, fax it to the insurer and then wait to hear if they will cover the treatment.

“The regimen I usually prescribe is proven to be efficacious and well-known throughout the medical community,” Poiesz, chief of hematology at Upstate Medical University, said. “Why it would take more than five to ten minutes is beyond me.”

Prior authorization is crippling medical providers. It’s too much wasted time and effort for absolutely no practical reason.

Insurers argue that prior authorization ensures patient safety, but most doctors see it as simply a cost-cutting tactic for insurance companies that costs the overall health care system billions.

“It’s all about cutting costs,” said Leah Krieger, who has worked in the pharmacy benefit management departments of several insurance companies. “Only expensive therapies require prior authorization. You’ll rarely see a prior authorization on generic therapies.”

According to a 2009 study, doctor offices reported spending an average of 20 hours per week—half an average workweek—on prior authorization. Like many hospitals and clinics across the country, Poiesz’s Upstate Medical University has even hired staff members devoted solely to dealing with prior authorization.

Since that time is uncompensated, prior authorization is costing the U.S. health care system up to $31 billion each year, according to one estimate. “It’s crippling medical providers,” Poiesz said. “It’s too much wasted time and effort for absolutely no practical reason.”

Prior Authorization Costs U.S. Doctors $31B Each Year

Prior authorization is also undermining the physician’s role in patient care. “Sometimes, to avoid the hassle, doctors will not pursue a prior authorization and use a different drug instead,” Krieger said. “So the pharmacy benefit manager is deciding a patient’s treatment, not the physician.”

Simple ways to reduce these burdens include giving doctors an annual limit of “instant approvals” on prescriptions. By simply writing “instant approval” on the prescription, the prior authorization would be automatically approved. No phone calls, faxes or paperwork would be required.

There are a lot of hidden costs in prior authorizations that are not being compensated.

This isn’t just a theory; the practice was implemented in North Carolina’s Medicaid program in 2007 for acid reflux prescriptions. Prescriptions were switched to the plan’s preferred therapies at the same rate as with the traditional process, and doctors and pharmacists saved time. Accordingly to Krieger’s analysis, instant approvals could save the health care system over $5 billion.

Changes to prior authorization, however, will require doctors and policymakers to get involved. “I can’t see the pharmacy benefit managers doing it on their own,” Krieger said. “What would motivate them? There needs to be a push from doctors.”

Poiesz agrees. He believes that all the parties involved need to agree on which treatments should get instant approval and which would require some explanation. “We need medical governing bodies — such as the American Society of Clinical Oncologists — to start dialogs between the government, third-party insurers, hospitals and physicians,” Poiesz said. “We need understandable guidelines that are consistent across the board.”

Earlier this year in its annual report, ASCO acknowledged that the burden of prior authorization was a “growing concern” among cancer doctors, but specific ways to address it have not been put forward by the organization.

“There are a lot of hidden costs in prior authorizations that are not being compensated,” Krieger said. “If some of that money can be used for the medications rather than administrative costs, the entire cancer care system would benefit in the long run.”