Prior Authorization Reform for Healthcare Coverage Takes Center Stage

Prior Authorization Reform for Healthcare Coverage Takes Center Stage

One of the leading reasons for provider frustration is prior authorizations. The insurance companies initially created prior authorization (prior auth) to keep down the cost of care when a service fee was the primary payment method for payers. However, it has become a hindrance for providers and staff as they spend hours waiting for authorization to provide medical care. 


In the past, hospital organizations needed approval (prior authorization) from an insurance company before a medical professional could prescribe medication or perform a procedure. This process can be very time-consuming, costly, and inefficient. As a result, many patients are denied multiple times the needed medical treatment and care. 


Another complaint is the lack of transparency from the payer regarding approving or denying the request. Physicians have found that the person supporting the authorization often does not have the necessary education or experience to decide what is best for the patient. 


Reform of the current system is needed to increase provider satisfaction. If this occurred, there would be a dramatic reduction in red tape and lead to uniform measures for authorization to be shared between cooperating practitioners. Prior authorization reform ensures that routine procedures are pushed through faster, reducing medical care delays and improving clinical outcomes.


Reform ideas are beginning to move from a concept into state law. Texas Governor Greg Abbott allowed House Bill 3459 to go into law without his signature. Effective September 1, 2021. This bill has dissolved the dysfunctional prior-auth structure that has plagued healthcare for many years. In doing so, Texas has set an example for the nation to follow. I had the chance to speak with Lilly Timon; she is part of a grassroots organization that seeks to empower individuals to fight against the corporatization of healthcare and put patient care and safety ahead of profits. She galvanized and helped push the Texas bill through. She states that the legislation eliminates time-suck and improves the quality of care for patients. 


The bill requires insurers to notify a physician or provider that they qualify for exemption from needing a prior authorization, which services the exemption applies to, and how long the exemption will last. The bill allows providers who have established 80% insurers approved prior-auth in a calendar year to be exempt from rigorous requirements for the following calendar year. 


After the law goes into effect, Texas health insurance companies have to be compliant with providers. The dilemma is now that the legislation passed, what will be the impact of making such a change? 


If insurance companies refuse to make the necessary changes to comply with the law, who will enforce compliance, and what will be the consequence of not following the law? There still needs to be healthcare advocates for the push for insurance to comply. Advocates for such reform still need to work diligently. Another avenue is for healthcare organizations to join forces and take legal actions to make insurance companies compliant with the law. Otherwise, insurance companies will continue driving up costs while adding little or no value. 


The new Texas law may serve as an example to the rest of the nation on beginning health insurance reform. The process has been long, but if the outcome is a more streamlined process that does not increase costs, legislators may duplicate the law in other states.