One reason for Americans' low trust in health insurance companies may be one of the industry's most frustrating practices: prior authorization requirements.
Prior authorization (PA) — also called preapproval, prior approval, preauthorization or precertification — is the process health plans use to decide whether to cover certain services. Many insurers require PA for elective surgeries, non-emergency hospitalizations, certain medications, imaging such as MRI or CT scans, or visits with certain specialists (particularly out-of-network specialists or facilities).
PA rules are based on clinical guidelines and often require patients to try less intensive — and less expensive — treatments before the insurer will approve more expensive approaches.
For example, people with endometriosis may first be required to try nonsteroidal anti-inflammatory drugs (NSAIDs) followed by first-line treatments, such as generic drugs, before they'll approve second- or third-line treatments — usually newer, brand-name, more expensive drugs.
Surgery might only be covered after medication fails.
If the insurer denies the PA, patients can appeal. If the denial stands, patients are forced to pay out of pocket or go without that care.
Why is prior authorization required?
The obvious motivation for requiring preapproval is to save insurers money. The fewer services they pay for, the more money they make.
But health insurance experts argue there's more to PAs than just money.
In the best case, PAs ensure patient care follows best practices and protect patients from potential harm from unnecessary treatment, according to Linda Bellgraph, vice president of education at the Endometriosis Association and a retired health insurance professional with more than four decades of industry experience. For example, to treat endometriosis, surgeons may recommend a hysterectomy, which may not always be appropriate or cost-effective.
Farzana Rahman, R.Ph., an executive at Banjo Health, agreed that PAs are meant to ensure appropriate medication use based on expert guidelines, rather than starting patients on the newest (most expensive) drugs. Just because a drug is new doesn't mean that it's best for everybody with that disease, according to Rahman.
Often, though, PAs create delays or barriers to care. For example, certain birth control options, medications for skin infections, cancer treatments, arthritis medications or treatment for pain associated with endometriosis may require prior authorization — making the drugs harder to access, which means it takes longer for women to get the care they need.
How to get prior authorization
Bellgraph recommends people should read their member materials. A lot of people get them and toss them without even taking a look, but member handbooks spell out your benefits, rights and responsibilities, including specific coverage rules and PA requirements. Those details can help you follow the rules and avoid surprises. You can always call customer service for your health plan as well.
PA rules depend on the type of insurance you have and where you live. For example, federal rules govern PAs for people with Medicare and Medicaid, though each state administers its own Medicaid program.
Within the regulations, insurance companies set their own processes for what services require PA and what criteria they use to decide on those requests.
Your primary care provider (PCP), or the prescribing or treating provider, typically requests the PA. Providers can only get reimbursed for these services if they get preapproval, so they have a stake in the process, too.
Not everyone has — or thinks they have — a PCP, but most HMOs require members to have one. Even if you don't realize it, if you have an HMO, you've probably been assigned a PCP. Call your health plan to find out who it is so you can get their help with authorization requests.
Depending on your insurance plan and your provider, you may never need to get involved with the prior authorization process. If the request is denied, though, you'll know. The insurer should notify you of its decision and your right to appeal it by making a request that the company change its decision.
How to appeal a denial
Depending on the type of insurance, you may be entitled to several levels of appeal, each with specific rules and time frames. Even if your request is approved, you may appeal the duration of the approval. For example, if you're having a one-year course of treatment, you can appeal an authorization that only allows for six months.
"It's complicated but it's doable if you can stick with it and keep complaining," said Lisa Kantor, a California-based healthcare attorney who works with patients whose health insurance companies have denied their claims.
To appeal any part of an insurer's decision, you may need to send a letter and ask your healthcare provider to do the same, explaining why the service is medically necessary. You can ask for the insurer's clinical criteria and for a clear explanation of why they denied your request. If the request doesn't match their criteria, your doctor will probably need to explain why.
Medicare, Medicaid and the Affordable Care Act allow people to start by filing an internal appeal with their health plan and then to request an external review from a state or federal government agency if they don't get the result they want internally. Each state has an external review process that meets federal consumer protection standards. State departments of insurance or insurance commissioners, consumer protection agencies or attorneys general may also be able to help, depending on the state.
If following the normal timeline would put your health in jeopardy, you can request an expedited appeal from your health plan to speed up the process.
If you get your insurance through a large employer, they may be exempt from certain rules, which could limit your appeal rights. But, you can also tap into human resources for help. If your employer policy is keeping you from services you need, Kantor suggests contacting the Department of Labor.
According to Kantor, sometimes the process, unfortunately, "requires the person to just dig in and try to figure it out on their own."
Health plans are judged by accrediting bodies, in part, on how satisfied their members are. When you get a customer satisfaction survey from your health plan, fill it out. Your honest assessment may not overturn a denial, but it can put the insurer on notice that they need to do better for members in the future.
This resource was created with support from AbbVie.