Aaron L. Schwartz, MD, Ph.D., Department of Medical Ethics and Health Policy, Perelman School of Medicine at the University of Pennsylvania speaks about Measuring the Scope of Prior Authorization Policies – Applying Private Insurer Rules to Medicare Part B.
Link to Abstract:
https://jamanetwork.com/journals/jama-health-forum/fullarticle/2780396
Points to Remember –
Question: How common are medical services that require prior authorization and how much do they cost?
Findings:
This cross-sectional study looked at medical services paid for by government-administered Medicare Part B, which doesn’t require prior authorization, for about 6.5 million beneficiaries. The study found that 2.2 services per beneficiary per year would have required prior authorization under the coverage rules of a large Medicare Advantage insurer, and these services accounted for 25% of annual Part B spending.
Meaning:
The extent of prior authorization policies in Medicare varies significantly between government-run and privately administered insurance.
Abstract:
Importance:
Prior authorization is a tool used by health insurers to assess the medical necessity of planned medical services. The frequency with which medical services may require prior authorization, the amount spent on these services, the types of services and clinician specialties affected, and the differences in the scope of prior authorization policies between government-administered and privately administered insurance have all been impossible to measure due to data challenges.
Objectives:
Using new data on private insurer coverage rules, determine the extent of prior permission restrictions for medical treatments and describe the services and clinician specializations affected.
Participants, setting, and design:
Fee-for-service For beneficiaries in Medicare Part B, which does not require prior permission, claims from 2017 were examined. We assessed the cost associated with the utilization of services that would have required prior permission under the coverage guidelines of a big Medicare Advantage insurer. For 14 clinical categories and 27 clinician specialties, we present the rates for these services.
Main Goals and Metrics:
Annual count per beneficiary and related spending for 1151 services that require prior authorization from the Medicare Advantage insurer; chance of providing one or more of these services per year, by clinician specialty.
Results:
41 percent of the 6 497 534 beneficiaries (mean [SD] age: 72.1 [12.1] years) got at least one service per year that would have required prior permission under Medicare Advantage prior authorization standards. The mean (SD) annual number of services per beneficiary was 2.2 (8.9) (95 percent CI, 2.17-2.18), equivalent to a mean (SD) annual cost per beneficiary of $1661 ($8900) (95 percent CI, $1654-$1668), or 25% of total annual Part B spending. Part B medications accounted for 58 percent of the associated spending, with hematology and oncology pharmaceuticals accounting for the majority. Radiology accounted for the most non-drug spending (16%), followed by musculoskeletal services (12%). (9 percent ). The rates of services that required prior authorization varied substantially among physician specialties, with the highest rates (97%) among radiation oncologists, cardiologists (93%), and radiologists (91%) and the lowest rates (2%) among pathologists and psychiatrists (4 percent ).
Conclusions and Implications:
A considerable share of fee-for-service Medicare Part B spending would have been subject to prior authorization under private insurance coverage rules in this cross-sectional analysis. Prior authorization requirements for Part B medications have been a major source of coverage policy differences between government and privately operated Medicare.