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Senators on HELP Committee Consider Standardizing Prior Authorization While Exploring Ways to Cut Administrative Costs

As we reported last week, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held a hearing—Reducing Health Care Costs: Decreasing Administrative Spending—to explore ways to curb costs associated with the administrative tasks in the healthcare system.

One of the topics discussed in the hearing was how standardization of insurance prior authorization could reduce administrative costs and burden on physicians. This was also a priority issue for ASCRS during last month’s Alliance of Specialty Medicine Legislative Fly-In, during which attendees asked lawmakers to address various barriers to specialty care, including prior authorization and step therapy. Too often, the various prior authorization processes delay patient care and create excessive burdens on physicians.

During the HELP hearing, witness David M. Cutler, PhD, Harvard College Professor and Otto Eckstein Professor of Applied Economics, informed the committee that standardizing prior authorization could help cut administrative costs by as much as 50% over five years if Congress and the administration could work together to make it happen. To be successful, Dr. Cutler said, the Department of Health and Human Services should focus on simplifying coding for services, improving the integration of electronic health records (EHR), and standardizing pre-authorization policies.

According to a 2017 American Medical Association (AMA) survey on prior authorization, 84% of physicians and their staff ranked the burden associated with carrying out these policies as high or extremely high, while 86% felt that prior authorization burdens have increased over the past five years. Earlier this year, the AMA—along with the American Hospital Association, America's Health Insurance Plans, the American Pharmacists Association, the BlueCross BlueShield Association, and the Medical Group Management Association MGMA—released a consensus statement outlining five areas where prior authorization could be improved. These include selective application, program review and volume adjustment, transparency and communication, continuity of patient care, and automation.

During a recent House Ways and Means Committee, Alec Alexander, deputy administrator and director of the CMS Center for Program Integrity, indicated that CMS plans to increase the use of prior authorization within Medicare to help reduce waste, fraud, and abuse, and reminded the committee that the president’s budget includes a proposal to expand CMS' authority to require prior authorization for certain Medicare fee-for-service items.

To read witness testimony or watch the hearing in its entirety, visit the committee’s website. We will keep you updated on this important issue.