United Healthcare recently announced that it plans on reducing the number of medical services requiring prior authorization. Today the insurer processes around 600 million claims per year, 13 million of which require prior authorization before the claim will be covered. United hopes to reduce the number of prior authorizations to 10 million a year. The procedure to obtain prior authorization is an administrative burden for patients and providers, and many in the insurance field question whether prior authorizations actually save money.
An insurer reviews certain medical procedures and medications before they are provided in an attempt to contain costs. Medical care and certain medications are very costly, and it is reasonable to have some means in place to ensure such procedures and medications are used fairly and effectively. The downside, unfortunately, is that prior authorization does not seem to work, assuming the goal is to save money and not waste resources.
The important number mentioned above is not the 600 million claims processed by United, but the 13 million prior authorization requests. Of the 13 million requests, how many were approved in a timely manner and how many were denied? Of the denials how many were ultimately approved? Assuming the number is low, it begs the question as to why have prior authorization at all?
The vast majority of doctors consistently refer patients appropriately when it comes to more expensive care. Why should a patient that requires regular periodic testing be subjected to prior authorization when all the medical literature states that such care is required at set intervals?
Prior authorization has its place, but there are many instances where such a process is a waste of time and money. Having to receive approval from the insurer for a genetic test is one of many examples, as costs for such testing has dropped dramatically in recent years.
