Physician practice leaders ‘alarmed’ by skyrocketing cost of prior authorization policies

The Medical Group Management Association said its “alarmed” by new data, highlighting the skyrocketing burden physicians face when forced to follow prior authorization policies.

Such rules require doctors to check whether an insurer covers an imaging exam or drug before its administered. A new analysis from the nonprofit CAQH estimated that the cost for physicians to manually generate a prior authorization increased 60% between 2018 and 2019. Meanwhile, the insurer cost for that same transaction decreased, year over year.

MGMA—which represents about 55,000 practice leaders across the U.S., including radiology and other specialties—has crusaded against these policies. One of the group’s recent surveys of practice leaders found that 83% find these requirements to be “very” or “extremely” taxing.

“The financial burden of prior authorization requirements on physician practices is increasing at an alarming rate,” Anders Gilberg, senior VP of government affairs, said in Jan. 21 statement. “In 2020, practices should not be forced to rely on fax machines to complete manual prior authorizations when health plans could modernize the process.”

Overall, CAQH’s annual index estimated that healthcare could save 33%, or $13.3 billion of its yearly administrative spend by automating processes. MGMA is similarly pushing for that change and wants the federal government to mandate automation to minimize costs and delays in patient care. The CAQH analysis noted the average cost per electronic prior authorization transaction dipped year over year from $2.80 to $1.88. That’s compared to an uptick for manual administration from $6.61 to $10.92 in 2019.

Prior authorization has been an ongoing headache for radiologists, radiation oncologists and other providers in recent years. One American Medical Association survey noted that frustrations stemming from these policies can cause patients to abandon treatment plans. Another survey from the American Society for Radiation Oncology found a whopping 93% of respondents said their patients experienced delays in receiving care due to prior authorization.