Prior Authorization: What Can You Do?

Prior Authorization or “PA” as it is often referred to has become a major issue for almost all clinicians. While this practice was developed by the insurance industry to keep their costs down and profits up, it has often increased medical costs. With unnecessary burdens on medical practices, it can undermine the clinician/patient relationship and contribute to burnout.

So, what can the headache clinician do to ease the burden of PA?

1. PA is often a game where the practice is at a significant disadvantage. With an often-opaque process and insurance representatives who are ready to deny your request for non-medical reasons, there is an expectation that you will give up. Don’t! When you fight, you will often win.
    
2. Consider tracking your denial rate. What percent of denials ultimately are appealed?  If almost 100% over time, this may be a talking point for a negotiation with your payer.
    
3. Empower and involve your patients from the start, communicating every step of the way. Your patient should have a general understanding of their formulary, i.e. what is covered and how much it is going to cost even if a PA is obtained.
   • Many patients are paying for their policies. Sometimes a call by the patient can negate or at least speed up the PA process.
   • Patients who obtain their insurance from their employers should have the contact information of their company’s insurance representative. If the insurance company becomes difficult, the patient may be able to contact their company’s representative.
      
4. Document all medications (both abortive and preventive) tried and failed, including dose & duration.
   • In your “new patient” EMR template for headache, consider a statement like “the patient has had an adequate trial (usually 3 months is considered adequate) of the following medication classes and been titrated to a standard recommended dose. The medications include beta blockers, tricyclic antidepressants, anti-seizure medications, triptans, NSAIDs etc.”
   • List the names of the medications tried in each class and forward them per visit in your note. This is not only good for your clinical practice to avoid re-trying prior medicines accidentally, but it will make it easier for your staff to find them for PA efforts.
   • In our practice, we have a separate letter of medical necessity which lists the classes and medications that were in the EMR note that our PA subcontractor checks off and sends to the insurance company. 
      
5. Use Generic Medications whenever possible. Insurance companies usually cover generic medications. However, some generic medications (including triptans) may not be covered without a PA. In this case coupon programs such as Good Rx are an excellent option. The patient may pay $10 for the generic medication and entirely bypass the insurance carrier and their policies.
    
6. Never sign a contract requiring you perform PA for medications or any other service without the ability to bill for your time. Always read your contracts and have a healthcare attorney review as well. Insurance companies may attempt to sneak in such clauses. Not being required to perform PA gives the practice options to recover costs if the practice decides to perform PA’s as no insurance company is going to reimburse the practice for a PA (see below).
    
7. Perform a cost analysis and consider charging the patient for staff time for PA work.
   • As a rule of thumb, the more expensive the medication the more hoops the practice may need to jump through. This takes time and time is money, with many PA’s taking hours of staff time. Never lose sight that your practice is a small business, and no business will survive if they are losing money. This is where a sample cost analysis is important. Pick three to five medications that commonly require a PA and track the amount of time your staff spends getting the PA. Get an average of the time spent and multiply that by your average employee salary.  This is your cost per authorization.
   • When our practice performed this analysis, we found that the average cost per authorization was $100 (which is about the average reimbursement for a level 4 follow-up visit). We then looked at the average amount of medication authorizations per month, which was approximately 50. Our practice was spending $60,000.00 per year on PA. As a result, we implemented a policy where we charged the patient $100.00 for each PA and hired a subcontractor to perform them. If your practice is concierge based, you could include a portion of this fee in your yearly charges.
      
8. Understand your state laws on PA. Some states have passed laws to help with PA, however they are few and far between, and most are not as impactful as needed. Insurance companies will be familiar with them, though many clinicians and patients are not. In some states, it may be law that when an individual denies a prescription, they assume care of that patient. That has two major implications:
   • First, all states have laws that individuals who practice medicine in their state have an active state medical license. Insurance companies have become better at ensuring individuals who are involved in PA have an active state license. However, if the individual does not have a state medical license, they should be reported.
   • In our practice, we have a letter that we give to the patient to send to the individual informing them of their potential transgression and potential consequences. This has proven helpful in some instances.