How to Prevent Improper Use Without Costly, Time Sucking Prior Authorization

In a recent interview, American Medical Association (AMA) President Barbara McAneny discussed the fact that insurance prior authorization can create major disruptions to patient care and significant administrative burdens to the physician’s office. The AMA estimates that that the average physician and/or their staff will spend 14 hours a week dealing with insurance authorizations. However, CMS Administrator Seema Verma acknowledged that it is the lack of a prior authorization process which contributes to the high frequency of improper payments in the traditional Medicare system. In her comments at the 2018 AHIP (America’s Health Insurance Plans) conference, she said, “We review less than two tenths of 1% of the over 1 billion claims that Medicare receives a year. Given the scope and size of the Medicare program, that is ridiculously low.” She stated that CMS is simply not focusing enough on program oversight.

Medicare is too massive to monitor effectively using the methods of oversight we’ve had in the past, besides which it’s going bankrupt fast, in part due to improper use of resources. We can’t deny that there are problems with improper use in our own field when the largest wound care organization has been required to enter into a Corporate Integrity Agreement (CIA) with the Office of the Inspector General (OIG), and the OIG’s audit of hyperbaric hyperbaric oxygen therapy claims paid out by Medicare contractor Wisconsin Physicians Service (WPS) indicates that 85% of those services did not comply with Medicare requirements.

On the other hand, we learned painful lessons from the brief but messy Hyperbaric Oxygen Therapy (HBOT) prior authorization program. It was expensive to implement and caused delays in necessary care. Some HBOT prior authorization criteria were simply WRONG (like requiring patients with Late Effects of Radiation to also have a diabetic foot ulcer – a stupid clerical problem we were never able to correct), the criteria were implemented differently by each Medicare Administrative Carrier (e.g. different Hemoglobin A1C levels were used as thresholds for diabetes control), and criteria were interpreted capriciously from one reviewer to the next (e.g. one reviewer considered successful re-vascularization of 2 below knee arteries insufficient).

In other words, it’s possible for both of these statements to be true at the same time:

  1. Prior authorization is expensive for the provider and the payer, delays patient care, and is implemented with variable standards some of which are probably wrong, BUT
  2. Lack of adequate oversight has contributed to overuse and improper use of some wound care modalities, increasing the overall cost of wound care, placing physicians and hospitals at risk of monetary recoupment (or worse), and generally hurting the field.

Bottom line: We hate oversight, but apparently we need it. Given that Medicare is bankrupt, how can it be done right?

In January, the AMA was among a group of major organizations that released a “Consensus Statement on Improving the Prior Authorization Process.” Jointly, the AMA, American Hospital Association, AHIP, American Pharmacists Association, BlueCross BlueShield Association and Medical Group Management Association identified processes that, if implemented, could meaningfully reform the Prior Authorization process.

I am reading the document through the eyes of a wound care practitioner and thinking about the $94 Billion dollars a year that Medicare may spend on chronic wounds. I’m paraphrasing the statements, so you should read it yourself. However, these influential organizations agreed that:

  • Prior authorization should be selectively implemented based on the provider’s performance on quality measures (also defined as their adherence to evidence based guidelines).
  • The process should be transparent and both providers and patients should have easy access to the criteria being used.
  • The criteria should be established collaboratively (with provider input).
  • The mechanism should be electronic, use standard data exchange formats, and be available at the point of care.

How could this work in practice? Like this:

  • Create Appropriate Use quality measures for each advanced therapeutic that CMS wishes to monitor, reportable through a Qualified Clinical Data Registry (QCDR).
  • Craft detailed criteria for these measures in a collaborative process that involves payers, clinicians and even patients.
  • Practitioners would voluntarily report Appropriate Use quality measure data to the sponsoring QCDR.
  • Data submission will be automated through the electronic health record at the point of care.
  • Practitioner quality measure performance data would be publicly reported (and thus visible to patients, payers, and physicians) as currently required by the Merit Based Incentive Payment System (MIPS).
  • Physicians who achieve a certain threshold performance rate for some specific time frame will be exempted  from prior authorization or prepayment review. If they fall below a certain performance rate, they will again be subject to these processes.  Very low quality measure performance rates could trigger an audit by any one of several entities.

That’s it in a nutshell. Harness MIPS standards to automate the reporting of appropriate use quality measure data and use their performance rate to target prior authorization only at non-reporters or low performers. The US Wound Registry already has 2 appropriate use QCDR measures (one for HBOT and one for cellular products). We published this paper to demonstrate how it could work..

That is how to prevent improper use of HBOT or cellular products (or any Medicare service) without universal, costly, time-sucking Prior Authorization. It’s an idea so logical that it’s doubtful CMS would try it. But, maybe at some point, $ 94 billion a year will start to sound like real money.