As state legislatures intensify efforts to reform prior authorization processes, these changes may reflect broader regulatory trends such as those outlined by CMS in rules like CMS-0057_F. During the first quarter of 2024 there has been a noticeable increase in legislative activity related to these reforms. The Regulatory Resource Center (RRC) team at Point-of-Care Partners (POCP) team has diligently tracked these developments, providing key insights into the shifting regulatory landscape and its implications for various stakeholders. Here’s a breakdown of the recent changes and strategic guidance tailored for health plans, providers, and health IT vendors.
Recent Legislative Developments
- Exemptions and Gold Carding: Eight states have successfully passed legislation concerning prior authorization exemptions or "gold carding." This legislation is mandated for health plans, carriers, and utilization management entities, with the intent to reduce the administrative burden associated with prior authorizations.
- Pending Legislation: Additionally, twelve states have pending PA legislation aimed at similar objectives, demonstrating a widespread movement towards reducing administrative hurdles in healthcare.
- Specifics of the Legislation: The new laws define the time frames, criteria, and duration of prior authorization exemptions for specific services or medications. For example, if a provider has a high approval rate of 80 to 90% for certain services or medications, they may be exempted from submitting prior authorizations for those services for their population for 6 to 12 months, though this is limited to specific providers or services.
Observations and Missed Opportunities
- Varying Response Times: Some states have opted to shorten the turnaround times for prior authorization responses, with urgent requests required to be reviewed within 24 hours and non-urgent requests ranging from 72 hours to 7 days.
- Compliance with CMS Rules: Following the CMS's lead, states are increasingly requiring electronic submission of prior authorization requests. These changes are not slated for the distant future but are already being implemented.
- Standardized Forms: Despite these advancements, states have largely not moved away from the use of standardized forms, nor have they updated their policies to eliminate forms. This stagnation does little to address the burden of administrative tasks and moving away from prior authorization forms is critical in moving the needle on expediting access for patients to their needed medications.
What These Changes Mean for Stakeholders
- For Payers (Health Plans/Carriers): While payers may see a decrease in administrative workload due to fewer prior authorization requests, they will need to adjust their risk management strategies. This adjustment is necessary because providers with high approval rates will be exempted from submitting subsequent prior authorizations, which could shift the dynamics of service approval and denial.
- For Providers: The legislation significantly reduces the administrative burden on providers, allowing them to focus more on patient care rather than paperwork. Providers with high approval rates will particularly benefit from these exemptions, potentially leading to faster service or therapy for patients and a reduction in time dealing with prior authorizations.
- For Health IT Vendors: There is a growing demand for systems that can accommodate changes in prior authorization processes, including tracking and managing approvals and exemptions. Health IT vendors will need to update their systems to support these legislative changes and meet the new demands from healthcare providers and payers.
The landscape of state-level prior authorization policies is bustling, presenting new challenges and opportunities for all healthcare stakeholders. As these changes unfold, it is imperative for payers, providers, and health IT vendors to stay informed and adapt proactively. POCP offers the Prior Authorization Navigator subscription services to help customers stay on top of PA policies that may impact their business. This tool is invaluable for navigating the dynamic environment effectively and ensuring compliance while enhancing the efficiency and quality of healthcare delivery. If you’d like to talk about how POCP’s RRC can help your organization understand how policy may impact or empower you, reach out to me at kim.boyd@pocp.com
