Lancaster Physician Summer 2017 - 35

SUMMER 2017

Prior Authorizations

Your insurance policy is a contract. Like
me, you've probably never seen this contract. In my case, I'm not a party to this
contract; it is between the Hershey Medical
Center and Highmark Blue Cross Blue
Shield. However, the simplified core of the
contract is that the insurance company will
cover medically necessary medical interventions in exchange for a premium. Both
sides voluntarily enter into this agreement,
and I voluntarily signed up for the benefit.
 The medical interventions are paid for
out of a pot of money that all members
of the "premium paying community" pay
into. Like all communitarian arrangements,
the labor of the healthy pays for the medical
interventions of those that need them. The
insurance company keeps a portion of
this money because of the services it provides.  This includes:  defining "medical
necessity" for the group, negotiating a
lower "price" for the medical interventions,
following the laws that regulate this financial product, and marketing the product
to encourage new members to join the
"premium paying community."
A key point is that the insurance company, whether it is a government agency
or a corporation, defines medical necessity. There may be an appeal process, but
the final decision is made by the insurance
company. You may have legal recourse, and
the court may intervene and interpret your
view of medical necessity as the correct
one, but other than that rare instance, the
insurance company decides.
You have no way of knowing ahead of
time what the insurance company will
approve because their policies are not made
available to you. Furthermore, even if you
did have that policy made available to you,
those policies that govern their decisions
will continue to evolve. They have to. The
scientific base of medicine continues to
march on. The outcome of this is that you
don't know "what the rules are," and it's hard
to envision a scenario where you ever will.
And this is why more and more medical
interventions require preauthorization.
The health care provider submits the

Your insurance
policy is a contract. 

Like me, you've probably never
seen this contract. 
prescription of the physician or other
health care provider, and the insurance
company gives an answer of whether or
not the prescription is medically necessary.
The bright side is that patients are much
less likely to get a large bill for something
not approved, and the providers know
ahead of time what the insurance company
is likely to pay. But there is a dark side. It
adds a layer of cost, hassle, and frustration
to the ordering physician. Surprisingly,
preauthorization does not even guarantee
any payment will be made. The insurance
company still retains the right to not pay
for the service! As the preauthorization
process takes over every nook and cranny
of medicine, an army of billing specialists
have been employed to shepherd providers.
Physicians are spending more and more and
more time filling out forms, waiting on hold
to talk to a reviewer, and then talking to
reviewers about why they want a patient to
have a certain drug or procedure. The vast
majority of preauthorizations are approved,
largely because physicians are fairly good
at prescribing appropriate interventions.
So, in most cases, it is a waste of effort
that adds value to no one. Even in cases
where the prescription is not approved, it
is rarely because the recommendation of the
physician was wrong. It is almost always
because the insurance company demands
a cheaper alternative must be done first,
regardless of whether or not that makes
the most sense for that individual patient.
PAMED is not sitting idly by while this
carries on. PAMED supports HB 12931,
a bill introduced on April 26, 2017, that
streamlines the prior authorization process
with insurance plans. This will codify limits

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PHYSICIAN

on what obstacles insurance companies can
put in place for the approval of medical
prescriptions and orders. Even if there are
unintended consequences (as is the case
with almost all legislation) for most of us
in the house of medicine, it will provide
some much-needed relief if passed. It is
not a given this will pass; it will likely be
opposed by the insurance companies. But
if physicians and patients call their legislators, it will, as this issue has enormous
bipartisan support.
However, this issue shouldn't be about
demonizing insurance companies. I voluntarily remain in the world of health
insurance, and so do most of you. Furthermore, PAMED represents all physicians,
including those working in the insurance
industry as policy makers and reviewers.
Most of them truly want patients to
get appropriate cost-effective care, and
the process frustrates them, as well. By
working together and advocating for our
patients, we can make this mess better.
So stay engaged!
Dr. Mackley is a Radiation Oncologist at the
Penn State Cancer Institute and Professor of
Radiology, Medicine, and Pediatrics in the
Penn State College of Medicine. As the 5th
District Trustee on the PAMED Board, he
represents physicians of this county.

REFERENCES

1 https://www.pamedsoc.org/Pages/
Advocate%20Specific/PAMED-}
Priorities.aspx
https://www.pamedsoc.org/Pages/
Table of Contents for the Digital Edition of Lancaster Physician Summer 2017
