Prior Authorization Modernization

Prior authorization-with its numerous requirements, ever-changing criteria, and reliance on outdated technology-is the paramount administrative challenge faced by physicians and practices. During the 2023 legislative session, the WSMA will introduce priority legislation to modernize the use of prior authorization to relieve administrative burden, enhance the health care workforce, and expedite access to care for patients.

2023 Issue Brief: Prior Authorization Modernization

Our ask of the Legislature in 2023

During the 2023 legislative session, the WSMA will ask the Washington State Legislature to support WSMA priority legislation House Bill 1357 introduced by Rep. Tarra Simmons, D-Bremerton, which would:

Standardize prior authorization requirements across state-regulated insurance carriers, mandating that carriers utilize electronic systems rather than fax machines and approving prior authorization requests within 24-48 hours.
Require insurance carriers to post prior authorization requirements, evidence, and criteria online and make it available to patients and physicians upon request to promote transparency.
Ensure that insurance carriers' prior authorization determinations are made by qualified health care professionals.
Prohibit the use of prior authorizations for services that are routinely approved, building on 2020 WSMA prior authorization legislation.
Create parity between insurance carriers and physicians in circumstances where medical malpractice actions may be brought by patients who are harmed due to delayed or denied care.

Background on prior authorization

When physicians recommend a service or a drug for a patient, health insurance coverage is often conditioned on prior authorization from a patient's insurance carrier. Created to control utilization of high-cost and high-variance services, prior authorization requirements have expanded exponentially over time and now apply to many commonplace services and low-cost drugs.

Each insurance carrier has their own prior authorization processes, which vary from carrier to carrier. Physicians often contract with multiple carriers, and the lack of standardization makes the process difficult to navigate and leaves physicians and patients with few options for recourse. Physicians and patients have reported that the number of services requiring prior authorization has grown dramatically, with many practices now dedicating full-time employees that work solely on processing prior authorizations.

A 2018 consensus statement from physicians, hospitals, and insurance carriers acknowledged that prior authorization can be burdensome for all parties involved and there is need for substantial reform. There have been efforts at the state level to reduce the burden associated with prior authorization, but its use continues to proliferate. While a forthcoming federal rulemaking contains elements similar to WSMA's legislation, it will not apply to commercial health plans.

The 2022 Office of the Insurance Commissioner report to the Legislature on health plan prior authorization found that the use of prior authorization for some services doubled in the last year alone. Mental and behavioral health services saw slower turnaround times and higher denial rates than other services. The report noted that prior authorization was approved 100% of the time for at least 419 billing codes for health care services.

The impact of inappropriate prior authorization

Washington state physicians regularly report frustration with inappropriate use of prior authorization as their top concern and top priority for addressing through legislation. A recent WSMA survey of outpatient practices in the state found that 89% are experiencing staffing shortages. Many respondents cited cutting red tape associated with prior authorization as the most effective way to relieve pressures on the health care workforce.

Similarly, the American Medical Association recently released a survey finding that:

91% of physicians report delays in care due to prior authorization requirements.
91% of physicians reported prior authorization creating a significant or somewhat negative impact to patient outcomes.
75% of physicians report that prior authorization can lead to patient treatment abandonment.
28% of physicians reported that prior authorization has led to a patient having a serious adverse event.

Inappropriate use of prior authorization delays and disrupts access to care for patients, which negatively impacts health outcomes and substantially drives costs for physicians and health care staff who must dedicate considerable time to work with the carrier to obtain authorization for medically indicated care, creating unnecessary barriers for all as most prior authorizations are eventually approved.

More information

Contact WSMA Director of Government Affairs Sean Graham at sean@wsma.org or 360.259.4184.