Here's what to do when your health insurance requires prior authorization for a treatment

Recently two members of our family had to obtain prior authorization from their health insurance. One person wanted a knee replacement by an orthopedic surgeon and his request was approved; the other person wanted a brand-name prescription diabetes medicine and their request was denied. This made us curious to look into what this process entails.

What is prior authorization?

Prior authorization, also referred to as preauthorization, precertification, or prior approval, and often shortened to "prior auth" or PA, is a process by which insurance companies determine whether a medical service or therapy will be covered. Insurance companies use it as a means to manage resources and control costs. The goal is to prevent futile or unnecessary tests and treatments which may not bring enough benefit to the patients to justify their costs.

Prior authorization traces its origin back to utilization reviews of the 1960s when Medicare and Medicaid legislation was passed. At that time, if a physician admitted a patient for a diagnosis or procedure that was typically dealt with as an outpatient, that decision would be scrutinized and the admission might not be reimbursed by insurance. This kind of "after the fact" analysis still happens but the insurance companies also instituted the PA before certain types of care could be provided.

What needs prior authorization?

Typically medications and services with high costs or limited safety and efficacy data need PA. This includes chemotherapy, immunotherapy, newer brand name drugs, high-risk invasive procedures such as spine surgery, and procedures that are generally considered cosmetic. As an increasing number of expensive biological drugs are introduced for a variety of conditions in recent years, prior authorization is becoming the norm rather than the exception for a lot of patients.

Each insurance plan maintains its own PA list, which may be posted online on the insurer's website but not easily accessible or comprehensible because it's designed for providers and medical billing specialists, not patients. Most patients don't realize something needs PA until the provider or pharmacy informs them that they have no coverage and must pay out-of-pocket. It's also unclear how the insurer chooses what to put on the list. Thus, some items may require PA under one plan but be automatically covered in another. For instance, the government-administered Medicare Part B doesn't have any PA requirements, but the privately administered Medicare Advantage Plans can require PA for as many as 1,100 drugs.

How does the process work?

Your provider should know if a service or medication you need requires PA. When in doubt, call the insurance company and ask before you schedule surgery or fill a prescription. If PA is required, then your provider will fill out a form documenting the medical necessity. PA is a time-consuming process because the majority is still done by paper, although some pharmacies are taking the initiative to submit PAs electronically. It takes a few days to several weeks for the insurance company to review the material and make a decision.

What to do if prior authorization is denied

The common reasons for an insurance company to deny a PA include procedures and medications not indicated for the diagnosis, off-label use of the medications, or generics available when a brand name is requested. Sometimes the insurance company requires that a patient complete alternative therapies and show that they have exhausted all other options before approving the requested therapy. This is also called step therapy or "fail first." If your PA is denied, it's best to talk to your provider to understand the reason and formulate your next steps. If your provider believes that your requested therapy is still best for you, then your doctor can appeal the decision. They do this through a peer-to-peer review by talking to a doctor that works for the insurance company.

PA is an imperfect process that can delay patient care and adds to the frustration of accessing the health system. Advocates are proposing reforms to increase transparency and decrease the burden on providers and patients. Meanwhile, these are necessary hurdles that we encourage you to be patient with as you team up with your provider to ensure that you get what you need.

Qing Yang and Kevin Parker are a married couple living in Springfield. Dr. Yang is an anesthesiologist. She received her medical degree from Yale School of Medicine and completed residency training at Massachusetts General Hospital. Parker has helped formulate and administer public policy at various city, state, and federal government entities, including the Illinois Department of Innovation and Technology and the Illinois Emergency Management Agency. This column is not intended to substitute for professional medical advice, diagnosis or treatment. The opinions are those of the writers and do not represent the views of their employers.