Could prior authorization become a billable service?

Prior authorization (PA) has detrimental effects on patient care and is a significant burden for medical practices. On average, practices complete 45 PAs per physician per week, physicians and staff spend 14 hours on PAs each week, and 88% of physicians describe the PA burden as high or extremely high, according to a survey from the American Medical Association (AMA).

But what if health insurers had to reimburse physicians for time spent on PA, including appeals for wrongful denials?

A proposed time-based billing code for PA services was recently submitted to the AMA’s CPT Editorial Panel for consideration. The proposal appeared on the panel’s May 9-11, 2024, meeting agenda — but was withdrawn at the last minute. Alex Shteynshlyuger, MD, a New York urologist who submitted the code, reportedly spoke with the panel on May 9 and “decided to remove the proposal temporarily to address a few concerns that they had.” It may be resubmitted for consideration at a future meeting. A summary of actions for the May meeting will be published on or before June 7. The next CPT Editorial Panel meeting is in September. Medical specialty societies, individual physicians, hospitals, third-party payers, and other interested parties may submit applications for changes to CPT for the panel's consideration.

The rationale for a PA billing code is that health insurance companies currently have a financial incentive to require onerous prior authorizations. If insurers had to pay physicians for this work, it could help realign incentives and cut down on PA requests. Harvard professor and economist David Cutler proposed a similar policy in 2020.

In January, the Centers for Medicare & Medicaid Services finalized new regulations to streamline and automate PA processes for certain payers. “However, policymakers must also address the overwhelming volume of prior authorizations that physicians must complete,” AAFP President Steven P. Furr, MD, FAAFP, said in a statement.

Recently, several major payers have taken steps to reduce the PA burden through "gold card" programs or other actions. For example, last year UnitedHealthcare eliminated PA requirements for codes that account for roughly 20% of its PA volume. Because the change involved low-volume codes for primary care, it is not expected to have a significant impact on family physicians.

Related resource:

A Guide to Relieving Administrative Burden: Prior Authorization [AAFP Supplement in FPM]

Posted on May 20, 2024, by FPM Editors