Our practice has not worked directly with insurance companies for many years and I’ve written about some of the reasons for this previously, but today I wanted to respond to the question, is it appropriate for clinical office’s to charge for obtaining prior authorizations for their clients? To be clear, we do not provide this service, but here are a few reasons why. It is not because we want to make your life more challenging or because we “are punishing you,” but because we can’t provide the model of care we do if we were to delegate our resources to coordinating prior authorizations for all those who would request them.
Please watch this video! This is a family physician calling in a prior authorization for a client’s diagnostic scan which ends after twenty minutes in “we will fax you paperwork to complete before we can approve this authorization.”
The growing demands of administration work overall is a major challenge in most clinical offices. The FMLA form alone can take 15 minutes or more to complete, as well as short term disability forms, which each have to be worded carefully or the employee can suffer consequences that in the worst of circumstances can result in job termination. Our office also frequently has requests for Dr. Lane’s signature for releases for plane travel, cruise excursions, return to work, work limitations, massage and chiropractic therapy, nutraceuticals, breast pumps, spa rentals, and various certificates for courses taught. These take time and resources from our office and don’t even include the typical orders requiring her signature for ultrasounds, labs, prescriptions, consultations, and referrals.
Prior authorizations may make sense for elective surgeries or expensive procedures, but the volume of these requests today and the process our office must endure to attain these simply aren’t reasonable when also trying to provide safe care. Authorizations often take more than three days to get a response, so the initial twenty minutes or more invested must be followed-up on another day in the clinic. Those authorizations may then be denied, so another day is required to appeal that decision.
The average number of authorizations a single physician’s office does in a single week is 37, requiring an average of 16.4 hours per week to complete. My husband and I did these ourselves many years ago and would sit on the phone for hours and hours, often being disconnected or redirected and having to repeat the entire phone call. This is a burden we found too high to manage within the practice, and admittedly, within our marriage (HCPro, 2017).
Imagine how these requests impact the staff. This is a part-time job in itself and this doesn’t include gaining a signature for any other need or filing the claim and coordinating reimbursements! This burdens the clinician and pulls them away from client care. One survey found that 80% of physicians report having to file prior authorizations for prescriptions so their clients can attain medications for their chronic diseases (HCPro, 2017). As you see in the video above, not only is this time consuming and frustrating, but the entire system is quite antiquated. After calling for prior authorization, the office is then required to complete the request via fax when and if the fax is ever received. These are not performed online, but even if they were, that would require a username and password for every single portal which would have to be changed every 60 days and would the provider have to do these then to maintain security for that username and password?
Requests for prior authorizations increased for 86% of physician offices between 2015 and 2016 (HCPro, 2017). These authorizations question the judgement of the provider and as demonstrated in the video above, those questioning haven’t even the knowledge to make those judgement calls. The person questioning this family physician on the phone ordering a diagnostic exam of a skull malformation essentially asked if it was brain he was palpating, not understanding that a skull malformation is a boney malformation and the brain should not be palpated! We then end up spending time trying to properly answer questions that aren’t understood or the proper answer isn’t accepted into their algorithm, and if the prior authorization is delegated to staff so we can continue to see clients, they often have to take notes for clarification by the clinician and the call has to be returned.
The cost on average to a provider’s office for the clerical and provider time in obtaining just the prior authorizations is between $2,161 and $3,430 (Morley, Badolato, Hickner & Epling, 2013).
Health plans see prior authorizations as a way to save money, because they “don’t want to give physicians a blank check to order tests, procedures, and medications” and sadly, this is unlikely to change because it is working for the healthcare insurance company (HCPro, 2017). It can be exceedingly frustrating when insurance companies question clinicians and demand rationals for routine treatments such as antibiotics for acne or why a client might want to birth at home when a hospital is readily available. We have to have a very complex conversation with someone who is only concerned about cost and has no appreciation for clinical decision making.
The archaic process of filing prior authorizations is one of the leading complaints among physicians and a key component of the reforms being requested by the American Medical Association and other physician groups (HCPro, 2017). It is only one of the multitude of reasons we choose not to work within this arena. The financial burden is more than what our practice can assume while keeping cost within an attainable range for clients. A 2009 study found that a large proportion of a provider’s administrative costs are due to the ineffective interactions with health insurance companies and costs are on average, were found to be $68,274 annually for each clinician. This doesn’t even include the cost of faxing, office space, supplies and other related equipment needed for dealing with insurance companies like computers and printer ink. It also doesn’t include the clinician’s time. Rather, this is ancillary staff only! Do the math. And then look around at how long private practice clinicians, and worse even, midwifery practices remain open. We want to last the long haul.
Casalino, L. P., Nicholson, S., Gans, D. N., Hammond, T., Morra, D., Harrison, T., & Levinson, W. (2009). What does it cost physician practices to interact with health insurance plans? Health Aff, 28(4), 533-543. doi: 10.1377/hlthaff.28.4.w533
HCPro. (2017). Physician frustrated with prior authorization policies. Physician Practice Perspectives, 36(8). Retrieved from here.
Morley, C. P., Badolato, D. J., Hickner, J. & Epling, J. W. (2013). The impact of prior authorization requirements on primary care physicians’ offices: report of two parallel network studies. The Journal of the American Board of Family Medicine, 26(1), 93-95. doi: 10.3122/jabfm.2013.01.120062