15 Aug Addressing Questions About Prior Authorization
Prior Authorization refers to certain healthcare services and medications that must be approved ahead of time. If used correctly, it’s one of the most effective tools we use to keep healthcare costs down for consumers. We want our members to understand how and why we use prior authorization to protect against potentially unsafe and inappropriate care, and the steps we are taking to ensure the approval process moves quickly and efficiently for you and your doctor. Below we answer some common questions and concerns from members.
Why do health insurance companies like CGHC require certain procedures to be approved in advance of receiving services?
Prior authorization exists because there are sometimes safer and less expensive alternatives to what doctors might first recommend. For example, if a patient is experiencing shoulder pain, it is more cost effective for the patient to have physical therapy first instead of having an expensive MRI. This saves you money and ultimately saves all our members money because what we pay for health care services affects the premiums we charge.
Over the years, we have streamlined the list of services that require prior authorization to those where there is potential for harm to patients or wasteful overtreatment. We work with doctors and specialists to remove obstacles to safe and necessary medical care while also protecting our members from fraud, waste, and abuse, or from accidentally receiving expensive care out-of-network. It’s a balancing act, but we never forget that the money we use to pay for healthcare is our members’ money.
Why are members responsible for obtaining a prior authorization when healthcare providers are the ones who submit the prior authorization to CGHC?
Health plans need medical providers to submit prior authorization requests because they must include all necessary medical information. However, our insurance contract is with our members and that comes with some responsibility to other members. We invest a lot of time to ensure our network physicians understand the criteria we’ve designed with the help of doctors and specialists and complete their authorizations. When we hear about hiccups in the process, we take extra steps to advocate for our members and to educate in-network physician offices to ensure problems don’t recur in the future. That’s why it is so important that we hear from you if you have concerns about your medical care or authorizations.
What if prior authorization is not obtained?
If you do not receive a prior authorization for a service and you have the service performed anyway, it will delay payment of the claim and could cost you up to 50% of the cost of that service. Often the doctor or facility will discount the penalty because they feel responsible for not submitting the necessary prior authorization. We encourage you to speak with your doctor’s office if this happens or call us to advocate on your behalf.
Why do some prescription drugs require prior authorization?
There has been an explosion of new drugs to the market in recent years, and some of them are very expensive. But “new and improved” drugs are not necessarily more effective, with one study showing that 58% of new drugs over a six-year period provided no proven added benefits to patients over the drugs they were intended to replace.
We work with a team of clinicians that specialize in medication efficacy to design our approved drug list (aka formulary), with the goal of making high-value medications affordable for our members. Medications that are subject to prior authorization are noted on our formulary with a “PA” in the notes column.
If you are prescribed a medication that is indicated by a PA, it’s an opportunity to talk with your doctor about alternatives you can try. If your doctor feels strongly that you should take the medication that is subject to prior authorization, ask your doctor to complete the prior authorization on your behalf with all the required information.
Why does it take so long to process a prior authorization?
Delays in prior authorizations most commonly occur when prior authorization requests are not submitted in time by your provider, or they are incomplete. If you have a prescription or a procedure scheduled that requires prior authorization, please check with your doctor’s office following your appointment to ensure the forms have been submitted to us.
We approve urgent prior authorization requests within 72 hours and non-urgent requests within 15 days. Medication authorizations can go faster if the right information is submitted. It’s important you are aware of these timelines when scheduling a procedure or test. Once processed, you will receive a letter from us informing you of the decision.
We’ve tried to make prior authorization easier to understand by summarizing for members the most commonly requested medical services that are subject to prior authorizations. If you expect to soon receive medical care or treatment, please review the list with your doctor or the billing department of your hospital.
Return to all Articles