When health plans delay and deny, they must say why – American Medical Association

The AMA Update covers a range of health care topics affecting the lives of physicians and patients. Learn more about the latest in bird flu and policies from the 2024 AMA Annual Meeting.
The AMA Update covers a range of health care topics affecting the lives of physicians and patients. Learn more about the latest in bird flu and policies from the 2024 AMA Annual Meeting.
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Jun 11, 2024
Prior authorization is a complex and often frustrating process that physicians face on a regular basis. Of particular concern is the lack of information included in denial letters, according to an AMA Council on Medical Service report adopted at the 2024 AMA Annual Meeting in Chicago.
“One of the biggest issues with prior authorization is the opaque and extensive denial process. Not only is this a frustrating process for the patient looking to access treatment, but it is also exasperating for physicians who are attempting to support their patients,” says the report.
The AMA has achieved recent wins in 5 critical areas for physicians.
That is because appropriate information to understand or appeal the denial itself is not included. For example, patients and physicians may simply be informed that a medication has not been granted prior authorization. Beyond that, no justification as to why the denial took place or an alternative treatment option is provided.
“Health-insurer denials must not be a mystery to patients and physicians,” said AMA Trustee Marilyn J. Heine, MD. “Without clear information from an insurer on how a denial was determined, patients and physicians are often left to the frustrating guesswork of finding a treatment covered by a health plan, resulting in delayed and disrupted care. Transparency in coverage policies needs to be a core value, an essential principle to help patients and physicians make informed choices in a more efficient health care system.”
The AMA is fixing prior authorization by challenging insurance companies to eliminate care delays, patient harms and practice hassles.
To address confusion that can arise from prior authorization denial letters, the AMA House of Delegates adopted policy to work with payers and interested parties to ensure that prior authorization denial letters include the following:
Physicians lack information at the point of prescribing about what medications require prior authorization. This is where real-time benefit tools can help. These tools allow physicians to access detailed information about the coverage of a medication before the prescription is written. This can reduce the number of denial letters, increase the information accessible to physicians and allow doctors to focus on patient care instead of appeals.
Delegates also modified existing policy that calls on the AMA to:
The AMA has achieved recent wins on prior authorization and other critical areas (PDF) for physicians.
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In separate action, delegates adopted policy that aims to increase legal accountability of insurers when delay or denial of prior authorization leads to patient harm. This builds on the AMA’s work to fix prior authorization, including efforts to make these pivotal changes.
Prior authorization is used by insurers and other payers as a health care utilization management tool to deny payment for covered benefits when they deem the benefit clinically unnecessary. The problem is that prior authorization requirements are rapidly increasing each year. That leads to a rise in administrative duties for physicians and their teams. It also contributes to delayed care for patients.  
And due to those prior authorization requirements, the vast majority of physicians report experiencing high administrative burdens and say prior authorizations delay access to necessary care for their patients, according to the most recent AMA prior authorization physician survey data (PDF). 
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“The data strongly suggests that insurers are denying justified health care,” says a resolution introduced by the Ohio State Medical Association. Despite the evidence of inappropriate prior authorization denials by insurers, there is “no consensus on how to hold insurers liable for denials that result in preventable injury to patients,” says the resolution.
Meanwhile, nearly 90 prior authorization reform bills have been proposed in various state legislatures, some of which draw on the AMA’s model legislation (PDF).
“Waiting on a health plan to authorize necessary medical treatment is too often a hazard to patient health,” said Dr. Heine. “To protect patient-centered care, the AMA will work to support legal consequences for insurers that harm patients by imposing obstacles and burdens that interfere with medically necessary care.”
To address this, the House of Delegates directed the AMA to advocate “increased legal accountability of insurers and other payers when delay or denial of prior authorization leads to patient harm, including but not limited to the prohibition of mandatory predispute arbitration regarding prior authorization determinations and limitation on class-action clauses in beneficiary contracts.”
The AMA Litigation Center filed an amicus brief in an ultimately unsuccessful legal effort to hold a third-party administrator accountable for its role in delaying the cancer care of a patient named Kathleen Valentini. Explore how cancer killed Valentini, but prior authorization shared the blame.
The average physician practice completes over 40 prior authorizations per physician per week, and doctors and their staff spend nearly two business days a week completing such authorizations. That’s why the AMA is challenging insurance companies to eliminate care delays, patient harms and practice hassles. Learn more about why the AMA fights to fix prior authorization.
Read about the other highlights from the 2024 AMA Annual Meeting.
AMA progress on prior authorization
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