State lawmakers move to fix long waits for insurance approval

Wayne Township Schools teacher Alyssa Preddie-Allen was diagnosed in October with complex migraines — complex because they come with stroke symptoms — and her doctor prescribed medication.

But that wasn't the end of the story.

First because of a breakdown in communication between pharmacy and doctor and then because of the insurance approval process known as prior authorization, four months later Preddie-Allen is still waiting for official approval to get the medication.

In the meantime, an episode sent her to the emergency room in January, costing her about $7,000.

If Preddie-Allen's is a more extreme example in the commercial insurance market, Tanya Ugoletti's is a more common one in the state Medicaid system.

Every six months, she has to re-justify her 9-year-old son Kannon's need for two physical therapy sessions a week, when he should be getting, and used to get, five. He had a stroke in the womb, has triplegic cerebral palsy and will likely need physical therapy the rest of his life. That's on top of everything else she has to worry about, like coordinating his half dozen other medical specialists and just hoping he could one day experience life like she does.

She already saw him lose progress when the sessions were cut back once. So Ugoletti feels like she'll be fighting for his routine care forever.

Representatives at every level of the health care system, from patients to doctors to insurers, agree on at least one thing: the process of getting approvals for health services or drugs, known as prior authorization, needs to change.

The purpose of this process is to safeguard against fraud and to make sure patients aren't getting duplicating or conflicting care from multiple doctors, but for those doctors, patients and their caregivers, it has turned into an administrative nightmare that often means patients are delayed or sometimes denied the care they need.

After years of talking about it, Indiana lawmakers are starting to get serious about cutting down the burden of prior authorization in the legislative session this year. Two bills advancing through their first legislative chamber propose ways to give doctors less work and patients fewer delays and headaches — crucial progress providers haven't seen before, even if those proposals have been watered down a bit through the legislative process.

Senate Bill 400, authored by Sen. Liz Brown, R-Fort Wayne, would make state employees guinea pigs for a pilot program to eliminate prior authorization for a list of more than 50 health care services. House Bill 1003, a Republican priority bill authored by Rep. Craig Snow, R-Warsaw, incentivizes providers and insurers to enter reimbursement structures that focus on patient outcomes, rather than the services themselves, in exchange for dropping some prior authorization requirements. Both are awaiting floor votes and seem likely to advance.

Ugoletti is the office manager at SpeakIndy, a speech pathology clinic on the northeast side, so she spends several hours a day making calls for prior authorizations, collecting the necessary "letters of medical necessity" and patient evaluation records from doctors for both clients and her own son. If kids don't show what the insurer deems enough progress, their sessions may get cut down or cut off altogether. It's an open question the clinic's 200 families have to live through every six, or sometimes every three, months.

"That's kind of frustrating when you're like, this is my kid. This is their future," Ugoletti said. "And you're just saying he's not gonna get better."

'It's a nightmare'

Physicians and their staff spend an average of 13 hours a week on prior-authorization work alone, according to a 2021 American Medical Association survey. Nearly all reported that the process results in delayed care for patients, and a third reported these delays have led to serious harm, such as hospitalization, disability or death.

It's not uncommon for prior authorization to cause delays of seven to 10 business days, said Rep. Rita Fleming, D-Jeffersonville, who was an obstetrician-gynecologist for 35 years before retiring.

In the meantime, patients treat the emergency room as a costly backup plan.

David Welsh, a doctor in Batesville, thought he had made a clear case for why one of his patients with severe abdominal pain needed to be tested for gallstones. The insurer said this procedure needed prior authorization, and when that was denied, Welsh requested a peer review, meaning the case was reviewed by another doctor. He was still turned down.

Meanwhile, two weeks had gone by. The patient went to the emergency room instead to get the tests, along with a litany of other tests, costing her thousands of dollars.

This scenario, he said, "happens more times than anyone would like."

The sheer workload involved has increased hospital workforces significantly. Just in the last three months, Rush Memorial Hospital in Rushville, Indiana, has hired three new staff members in their surgery department specifically to handle prior authorizations, said Julie Slinker, senior director of revenue cycles. Good Samaritan Hospital in Vincennes has 60 staff dedicated to this, CEO Rob McLin said.

"You're gonna get no argument from me with regard to anything that would lift restrictions with regard to prior authorization," McLin told the House insurance committee on Feb. 1. "It's a nightmare. And I'm spending way too much money for no value."

Physical therapists, for example, have to submit prior authorizations every two to six visits on average, said Andrea Lausch, representing the Indiana chapter of the American Physical Therapy Association. These intervals are often too frequent for a patient to demonstrate progress, which can then result in denials of care.

Denials mean appeals, and appeals can take up to a month, she said. Patients inevitably backslide and potentially miss work; physicians feel burned out.

Shelby Nation, who co-founded SpeakIndy, is going through this with a longtime patient who has Down syndrome and autism. The 14-year-old girl had her sessions cut in half, and then down to zero because she wasn't making enough progress. Nation filed an appeal.

"It's from people behind the computer screen making these determinations, when we're the professionals working with them," she said. "We'd seen this client for years. It was really devastating."

What lawmakers want to do

Doctors like Welsh have been speaking out about the increasingly burdensome prior authorization problem for more than a decade.

This year is the first the issue has gotten real traction in the Statehouse, Fleming said.

"It may have been discussed as a side chat, but not with the seriousness that it's discussed now," she said.

The bills that are advancing, however, are doing so with scaled-back versions of their original proposals. And an important caveat to any state legislation on insurance policy is that it would not apply to insurance regulated by the federal government, including Medicare and large-employer plans covered by the Employee Retirement Income Security Act.

It would, though, apply to the rest of the commercial insurance market, including the Affordable Care Act marketplace. Under certain circumstances, state insurance laws can also apply to Medicaid, which the state administers for income-eligible Hoosiers.

Of the 50 services that would be exempt from prior authorization altogether in Brown's Senate Bill 400, five are for services Ugoletti's son needs, from speech therapy to gait training exercises, meaning the Ugoletti family would be able to just focus on his care without worrying about getting new approvals every six months.

The most recent version of the bill makes that proposal a pilot program for state employees only, providers are still watching this carefully in the hopes it could one day be expanded. The bill also requires insurers across the board to respond with prior authorization decisions more quickly: five business days instead of seven for non-urgent health care, and 48 hours instead of 72 for emergencies.

"I think what we tried to come to is, this is a very complicated problem, we didn't wanna make very significant shifts that would cause one side, now, problems with respect to changing their reimbursement, processing things," Brown said.

Where House Bill 1003 landed was also a compromise that the Insurance Institute of Indiana proposed. The proposal aims to incentivize health providers to change from charging for each individual procedure or service to instead have insurers pay for the effectiveness of the care. The incentive is that providers accept some financial risk in return for limits on prior authorization.

In other words, because providers wouldn't be reimbursed for every little medical test they order, the thinking is doctors would be more judicious. These kinds of contracts are generally associated with less need for prior authorization, according to a joint study by the American Heart Association and the Robert J. Margolis, MD, Center for Health Policy at Duke University.

But the compromise has some lawmakers feeling frustrated that the bill no longer provides short-term relief, like an original proposal to exempt physicians from needing prior authorization for services they routinely get approved.

"What I'm hearing is kick the can down the road down once again," Fleming said. "We can't do that. We have some suggestions, and there should be enough metrics that we can institute some of this right away. Start with the simple things, but let's make a difference."

Preddie-Allen, the school teacher, could benefit from the momentum initiated this year if, say, her health provider follows the provisions in House Bill 1003 and negotiates down the need for prior authorizations. For now, she was able to obtain a limited number of samples of the medicine she needs, Ubrelvy, while she waits for the results of her prior authorization.

The more likely scenario to play out in the near term may be what happened in January: While teaching, she suddenly became so dizzy, she had to lean against a wall; her speech started slurring, and her left side started drooping. Her school principal happened to be walking by and found her.

"I just wanted to go home and sleep it off," she said. "Because I know it's just another medical bill."

Kayla Dwyer is a transportation reporter at IndyStar. Contact her at [email protected] or follow her on Twitter @kayla_dwyer17.