Sally Pipes: "How Trump’s ‘Prior Authorization’ Deal Puts Patients Ahead of Paperwork"
Health insurers' current prior authorization process is needlessly complex. It leads to delays, ineffective initial treatments, and in some cases, hospitalizations.
The following is an excerpt from an article by Sally Pipes, Founder & Chair of the Benjamin Rush Institute, published in National Review. Click here to read the full article in your browser.
Americans increasingly need a permission slip from their insurance company before they can get medical care. And it’s driving them crazy. According to one recent survey, nearly three-quarters of patients find delays and denials of treatment by insurers to be a major problem with our health-care system.
Fortunately, a new federal initiative may address their concerns. The Trump administration recently struck a deal with insurers to streamline “prior authorization,” whereby patients and doctors must secure approval for certain treatments before an insurer will pay for them. The effort could meaningfully reduce delays for patients, while avoiding the Obamacare-style mandates that have catalyzed an affordability crisis in the insurance market.
The current prior authorization process is needlessly complex. Different insurers have different rules, platforms, and documentation standards. These complexities can force patients to endure long waits for care. According to a 2023 KFF survey, nearly one-third of patients who had issues with prior authorization experienced significant delays in receiving care. But the process also puts significant administrative strain on doctors. Physician practices spend an average of twelve hours a week securing prior authorizations, a 2024 survey by the American Medical Association found.
What’s worse, much of this delay serves no clinical purpose. More than nine in ten prior authorization requests in Medicare Advantage are ultimately approved. More than eight in ten denials are overturned on appeal.
In other words, patients and physicians are jumping through hoops largely to arrive at the same outcome — days or weeks later.
Those delays can be harmful. Nearly 70 percent of physicians said that prior authorization led to ineffective initial treatments, according to that same AMA survey. Almost three in ten reported hospitalizations among their patients.
Under the terms of their deal with the Trump administration, insurers have committed to several changes — many of which are just starting to come into effect. They’ll reduce the scope of claims subject to prior authorization, provide clearer and more transparent explanations of their decisions, standardize the process for securing prior authorization electronically, and answer at least 80 percent of prior authorization requests in real time. They’ve also pledged to honor existing prior authorizations when patients change insurers mid-treatment to ensure continuity of care.
Insurers have a strong incentive to abide by these commitments. If they don’t, they risk triggering far more aggressive government intervention, especially at the state level.
As of the beginning of this year, insurers in North Dakota must make prior authorization determinations within seven calendar days — or within 72 hours for urgent care. Nebraska has imposed similar timelines. In Alaska, insurers must resolve prior authorization requests within 72 hours for most treatments and within 24 hours for the most urgent requests.
But while well-intentioned, regulations like these could drive up costs for insurers — and thus premiums for patients. It would be far better to pre-empt government intervention where possible.
In a new research paper, Paragon Health Institute scholar Jackson Hammond offers a few ideas for how insurers can do so. They can start by removing treatments that are consistently and frequently approved from their prior authorization frameworks. Treatments considered “best practices” by an appropriate medical society are also candidates for exemption from prior authorization.
Hammond cites chronic migraines as one condition where prior authorization generally does a disservice to patients. Many insurers require patients to fail on at least two older, less expensive drugs before they’ll cover newer ones. They say these “step therapy” policies promote cost-effective prescribing by steering patients to lower-cost options first. Yet migraine specialists say that the vast majority of patients ultimately gain approval for newer therapies anyway. This step therapy requirement merely delays effective care and offers little financial benefit to insurers.
Prior authorization exists for a reason: to prevent waste and ensure appropriate care. But when it becomes an obstacle to timely, effective treatment, reform is necessary. The Trump administration’s deal with insurers shows that it’s possible to reduce delays and administrative burden without imposing rigid, one-size-fits-all mandates.
If insurers fail to keep their commitments under the deal, lawmakers could step in — and implement rules that would be far more punitive and costly. That’s not an outcome insurers, or patients, should welcome.