Could Prior Authorization Work Win its Own CPT Code?

This report originally appeared on our partner site Medical Economics.

Medical experts could consider creating new billing codes for time physicians and their support staff spend working on prior authorizations.

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The American Medical Association’s (AMA) Current Procedural Terminology (CPT) Editorial Panel is scheduled to meet May 9 to 11 in Chicago. Its meeting agenda includes three potential new CPT codes “to report services (physician, QHP, Clinical Staff) related to [payer] authorization of procedures,” referring to qualified health plans.

What does it say?

Proposals for new codes may come from industry, medical specialty societies, government, health plans, hospitals and others. AMA does not disclose identities of applicants because their requests may have proprietary information.

But the agenda included a file with dozens of studies and documents stating what so many physicians already know: In its current form, prior authorization is a burden that delays patient care – sometimes with bad effects on patient health – while costing medical practices a lot of time and money.

Among the supporting documents:

• AMA’s own 2022 provider survey that found 94% reported PA always, often or sometimes delays access to necessary care. The same survey said 80% of physicians reported PA at least sometimes leads to patients abandoning their treatments.
• The Medical Group Management Association’s 2023 survey reporting 89% of medical practices had to hire or redistribute staff to work on PA due to the increase in requests. A full 47% reported hiring full-time equivalent staff to assist with increasing PA requirements.

Gold cards not so golden

Physicians, lawmakers, payers and others have pondered whether a “gold card” program for medical practices could make the PA process easier for practices that build a record of appropriate patient treatments. But that hasn’t worked so well in Texas, where the Texas Medical Association in December 2023 cited the Texas Department of Insurance figure that just 3% of physicians and other clinicians met the eligibility for that state.

Alex Shteynshlyuger, MD, a New York urologist, pointed to that report and said “gold carding failed spectacularly in Texas.”

In the prior authorization process now, costs accrue to patients and providers, essentially one party, causing severe market inefficiencies. The best solution is to fix the problem equitably and fairly for physicians, other health care providers, and health plans, Shteynshlyuger said.

"Good public and economic policy must align costs, benefits, and incentives; currently, all costs are incurred by physician practices, and all financial savings and benefits from prior authorization accrue to health insurance plans, leading to perverse incentives,” Shteynshlyuger said in an email to Medical Economics. “In the end, there is every incentive not to advocate on the patient's behalf: The plan gets to gain 100% of unspent money as profits; providers avoid losing money on every prior authorization they do and every denial of care or wrongful denial of prior authorization that they submit."

PA has ‘a life of its own’

In 2020, AMA then-President Jack Resneck, MD, told Medical Economics about his experience with prior authorizations.

“When prior authorization came into being, it was really focused on brand new drugs with very high price tags where the evidence was still accumulating, and maybe where there was variation in care,” he said. “It has gotten to the point where I, as a dermatologist, am literally doing prior auths every day on generic topicals like cortisone products that were invented in the 1960s. So the expansion – and we’ve seen this in the data – has been dramatic. It’s no longer focused on high-cost drugs that are unique or on new drugs. It’s no longer focused on outlier physicians in any way. It really just seems to have taken on a life of its own.”

Reasons for optimism?

Resneck said he was optimistic because at that time, legislators and policy makers were gaining in understanding that the PA process had gotten out of control. His predictions emerged as realities, to a degree, in more recent times. The bill known as the “Improving Seniors’ Timely Access to Care Act,” with provisions to streamline prior authorizations, has strong bipartisan support and passed in the House of Representatives. Lawmakers this year praised the U.S. Centers for Medicare & Medicaid Services for implementing new requirements with the same goals.

Physicians debate

While the effects on patients and physicians are well known, the proposal for the new codes may not be a slam dunk.

In 2022, MedPage Today reported on AMA members’ debate about resolutions that advocated for developing CPT codes to reimburse doctors for their time spent on prior authorizations. Some physicians supported the plan, while others argue it could undermine needed reform efforts with little hope that insurers would pay physicians for work required in their contracts.

By the numbers

The appearance on the agenda does not guarantee any new code will make it into the U.S. health care system.

In February, AMA’s CPT Editorial Panel agenda had 45 proposals for new, revised, add-ons or deletions in CPT codes. Among them, 26 were approved, four rejected, and 16 withdrawn.

At the September 2023 meeting, there were 76 proposals; 31 were approved, 13 rejected, 22 withdrawn, and nine postponed. In May 2023, there were 61 proposals, with 29 approved, five rejected, 20 withdrawn, five postponed, and two terminated, according to the summaries posted on AMA’s website.