States target health insurers' red tape

Christopher Marks noticed an immediate improvement when his doctor prescribed him the Type 2 diabetes medication Mounjaro last year. The 40-year-old truck driver from Kansas City, Missouri, said his average blood sugar reading decreased significantly and keeping it within target range took less insulin than before.

But when his doctor followed the typical prescribing pattern and increased his dose of Mounjaro — a drug with a wholesale list price of more than $1,000 a month — Marks’ health insurer declined to pay for it.

Marks had Cigna insurance that he purchased on the federal health insurance marketplace, healthcare.gov. After two appeals over a month and a half, Cigna agreed to cover the higher dose. A few months later, he said, when it was time to up his dose once more, he was denied again.

By November, he decided it wasn’t worth sparring with Cigna anymore, since the insurer was leaving the marketplace in Missouri at the start of this year. He decided to stay on the lower dose until his new insurance kicked in.

“That is beyond frustrating," Marks said. "People shouldn’t have to be like, ‘It’s not worth the fight to get my medical treatment.’” 

The process Marks encountered is called “prior authorization,” or sometimes “pre-certification,” a tool insurers say they use to rein in costs and protect patients from unnecessary or ineffective medical treatment. The practice prompted backlash from patients and groups representing medical professionals and hospitals that say prior authorization can interfere with treatment, cause medical provider burnout and increase administrative costs.

In January, the Biden administration announced new rules to streamline the process for patients with certain health plans, after attempts stalled in Congress.

States are considering prior authorization bills that go even further. Last year, lawmakers in 29 states and Washington, D.C., considered some 90 bills to limit prior authorization requirements, according to the American Medical Association, with notable victories in New Jersey and Washington, D.C.

The physicians association expects more bills this year, many with provisions spelled out in model legislation the group drafted.

In 2018, health insurers signed a consensus statement with various medical facility and provider groups that broadly laid out areas for improving the prior authorization process. The lack of progress since then has shown the need for legislative action, said Jack Resneck Jr., past president of the AMA and a current trustee.

Resneck, a California dermatologist, emphasized pending bills in Indiana, Massachusetts, North Carolina, Oklahoma and Wyoming that include several policies backed by the AMA, including quicker response times, requirements for public reporting of insurers’ prior authorization determinations and programs to reduce the volume of requests, sometimes called “gold carding.”

In Missouri, legislation introduced by Republican state Rep. Melanie Stinnett aims to establish one of those gold carding programs for treatment and prescriptions. Stinnett said she was frustrated by prior authorization hurdles in her work as a speech pathologist before joining the legislature in 2023.

Under her bill, a medical provider’s prior authorization requests during a six-month evaluation period would be reviewed. After that period, providers whose requests were approved at least 90% of the time would be exempt from having to submit requests for the next six months. The exemptions also would apply to facilities that meet that threshold. Then, she said, they would need to continue meeting the threshold to keep the “luxury” of the exemption.

Five states passed some form of gold carding program: Louisiana, Michigan, Texas, Vermont and West Virginia. The AMA is tracking active gold carding bills in 13 states, including Missouri.

A 2022 survey of 26 health insurance plans conducted by the industry trade group AHIP found that just over half of those plans used a gold carding program for medical services while about a fifth had done so for prescriptions. They gave mixed reviews: 23% said patient safety improved or stayed the same, while 20% said the practice increased costs without improving quality.

The new federal prior authorization rules finalized by the Centers for Medicare & Medicaid Services stop short of gold carding and don’t address prior authorizations for prescription drugs, like Marks’ Mounjaro prescription. Beginning in 2026, the new rules establish response time frames and public reporting requirements — and ultimately will mandate an electronic process — for some insurers participating in federal programs, such as Medicare Advantage or the health insurance marketplace.

Manual submissions accounted for 39% of prior authorization requests for prescriptions and 60% of those for medical services, according to the 2022 insurance survey.

In Missouri, opposition to Stinnett’s bill comes largely from pharmacy benefit managers and the insurance industry, including the company whose prior authorization process Marks navigated last year. A Cigna Healthcare executive submitted testimony saying the company’s experience showed gold card policies “increase inappropriate care and costs.”

The St. Louis Area Business Health Coalition, which represents dozens of employers that purchase health insurance for employees, also opposes the bill. Members of the coalition include financial services firm Edward Jones, coal company Peabody Energy and aviation giant Boeing, as well as several public school districts and the St. Louis city and county governments.

Louise Probst, the coalition’s executive director, said the prior authorization process has issues but the coalition would prefer that a solution come from insurers and providers rather than a new state law.