Since the senseless murder of the UnitedHealthcare CEO, Brian Thompson, there has been a lot of discussion regarding managed care and the companies that administer services on behalf of government and private payers. The use of the inscription on the bullet casings fired from the gun that killed Mr. Thompson, “Delay, Deny, Defend” have been interpreted as all the things wrong with managed care today.

There are some important facts to know about the alleged murderer:

1. Luigi Mangione was never a member of any UnitedHealthcare (UHC), nor a subscriber to any UHC product.
2. It is reported that he targeted UHC because it is the largest insurer in the country and, according to notes in a book he kept, it represented the “abuse” taking place in the US making healthcare one of the “most expensive in the world” while these companies make “immense profit”.
3. Mr. Mangione apparently suffered from back pain due to injury while surfing and allegedly had surgery after reportedly 1.5 years of conservative management. It is not documented anywhere that his surgery or any other procedure was ever denied by an insurance company.

The result of the murder of Brian Thompson, a father, husband and friend to many, has been shocking support of Luigi Mangione’s actions on social media. Physicians and other providers have posted comments about the murder as “a long time coming”, that it is “the start of a revolution against companies who deny care to patients” or “interfere with care provided by physicians for their patients”. A poll taken by Emerson College, only 68% of voters felt that murdering Brian Thompson was “unacceptable”, 17% found them completely “acceptable”! Additionally, among voters 18-29 years old, a shocking 41% felt that Luigi Mangione’s actions were “acceptable” or “somewhat acceptable”.

Throughout social media comments, the process of claims denials and prior authorization are pointed to as the key areas of focus for the dissatisfaction with insurance companies. The notion of claims denials as a way for “insurance companies to make money and hold on to profits” is a myth. Without getting into a deep discussion on claims denials, it has been well documented that the most common reasons for a claim failing to pay is the lack of correct identification information on the claim form completed by the provider. It has also been documented that submission of clean claims dropped significantly since the COVID 19 pandemic. Insurance companies are charged penalties when they fail to pay a clean claim within a prescribed time period, based on state and federal regulations. Some companies have paid interest and penalties in the millions of dollars, but this only a small fraction of the payments made on claims annually

What is Prior Authorization?

Prior authorization, also known as precertification or prior approval, is a decision from a health insurance plan that a service, treatment, prescription, or medical equipment is medically necessary, adheres to benefits provided and is within the members’ network of providers. It’s a way for insurance companies to track and ensure that requested services are appropriate and necessary for a patient’s care.

There are several different areas that are reviewed within the prior authorization process. These include

• Non-emergency hospitalizations: To assess that the reason for the hospitalization is medically indicated at the level of services requested (inpatient or ambulatory, same day admission, etc.), that the facility and physicians participating in the care are within the patient’s network and is included as a covered service within the patient’s benefits.
• Emergency admission to the hospital: To ensure that inpatient care is indicated based on nationally accepted, third-party sourced guidelines (such as Milliman Care Guidelines or InterQual Guidelines), or that the patient would more appropriate being watched for a short period of time under an observation status.
• Change in level of care for acute hospital inpatients requiring post-acute services: Evaluation for either inpatient post-acute care versus at home services using nationally accepted, third-party guidelines.
• Use of out-of-network providers: When a provider who is not part of the network is requested, there are several scenarios where prior authorization comes into play:
  • When a patient wishes to see a non-participating provider because there is no participating provider who can provide the service the member needs. These go through prior authorization as a network gap and are reviewed as such.
  • When a patient wishes to see a non-participating provider and does not have an out-of-network benefit. If there are providers able to offer the services within the network, the reasons for the request need to be reviewed by the prior authorization team.
  • When a physician refers the patient to an out-of-network physician when in network physicians are available, and the referring physician is looking for an exception, and if the patient does not have an out-of-network benefit, and the requested provider is not available at in-network rates. In this case, the reasons for the exception need to be evaluated.
  • There are barriers to seeing the in-network provider. These might include:
    • A prior relationship that resulted in problems between the patient and the physician
    • Travel to the participating provider is a greater burden on the patient
• Durable Medical Equipment: Usually there is a threshold for review of equipment that exceeds at least $1000, or for equipment that has already been provided but needs repair or replacement.
• Medications: There is a broad base of reasons for this and can include the following:
  • Very expensive medication: Usually medication with limited indications and that is considered a higher tier medication on the typical insurance formulary. There may be biosimilar alternatives at lower cost and there may also be out of pocket responsibility for the member for the very expensive medication. Some criteria may be placed on these medications that must be met before the prescription will be approved.
  • Medication that is considered experimental or investigational for the indication prescribed.
  • Medication prescribed at a frequency higher than recommended or for more pills than required for the interval covered (greater than 90 days typically). Also, for a request for refill prior to the time allowed (sooner than 90 days).

Why perform Prior Authorization?

There are many reasons to review procedures before they are undertaken and none of those reasons is to boost denials, despite the myths spread on social media. In fact, every denial comes with the opportunity to appeal, and those appeals can go several levels and can run the health plan several hundreds or thousands of dollars in time and fees in order to accurately review each case. It is for this reason that managed care organizations request that all information be submitted during the initial request. In most cases, the type of information needed for review of a procedure is provided on the website or within the Provider Manual for the plan.

The performance of medical review is a contractual requirement for participation in governmental programs, such as Medicare Advantage (MA) and Medicaid in most states. These regulations not only spell out the extent of processes that can be used by plans offering MA programs, but also are clear on the need to be transparent in the process, include practicing physicians on UM committees.  At a minimum, coverage offered must be the same as that available through traditional Medicare. In addition, private companies as well as municipalities that self-insure require plans to adhere to benefit packages and criteria for performance of procedures and hospital admissions.

Prior Authorization remains important for both overall health care cost savings and out of pocket expenses that would be passed on to the member. This is most evident in the use of providers that are out-of-network, and surprise billing. By knowing upfront that a physician does not normally participate in the patient’s health plan, if there is a network gap in that specialty for example, the prior authorization process gives the plan a heads up and an opportunity to negotiate a mutually agreeable rate of payment and takes the patient out of the mix and can prevent those surprise bills and reduce the out of pocket expenses for the patient.

Prior authorization can be used as part of “check and balance” process when a patient may be engaged in a certain treatment or diagnosis process that does not meet criteria set by national organizations. For example, a recent study by the Lown Institute³ (a nonprofit organization founded by a physician) found that a large percentage of back surgery were unnecessary (the article does not state the percent of cases that had prior authorization for the procedures).

• Florida ranks highest in the country for low-value and unnecessary back and spine surgeries performed on older adults.
• The five hospitals with the highest overuse rates for unnecessary spinal fusion were:
  • Mount Nittany Medical Center (State College, Pa.): 62.8%
  • The Medical Center of Aurora (Colo.): 42.1%
  • Jefferson Abington (Pa.) Hospital: 40.6%
  • Concord (N.H.) Hospital: 40.6%
  • Heritage Valley Sewickley (Pa.): 40.1%
• The five hospitals with the highest overuse rates for unnecessary vertebroplasty were:
  • Shannon Medical Center (San Angelo, Texas): 55.5%
  • CHI St. Vincent Infirmary (Little Rock, Ark.): 50.5%
  • St. Elizabeth Florence (Ky.) Hospital: 48.7%
  • Lutheran Hospital (Fort Wayne, Ind.): 44.6%
  • Ascension Providence Hospital-Southfield (Mich.) Campus: 42.3%
• New Hampshire and Arkansas were found to have the highest rates of unnecessary spinal fusions and/or laminectomies and vertebroplasties, respectively.
• A total of 3,454 physicians performed “a measurable number” of low-value spine surgeries, and in that time, they received $64 million from device and drug companies.
• On average, 14% of spinal fusions and/or laminectomies were considered “overused.” An average 11% of patient visits for osteoporotic fractures led to an unnecessary vertebroplasty, according to the Lown Institute report.
• Between 2019 and 2021, more than 200,000 unnecessary spine surgeries cost Medicare an estimated $2 billion.
• Hospitals performed more than 100,000 “unnecessary” procedures on older Americans in the first year of the COVID-19 pandemic, including 30,094 spine surgeries.

It is not only independent third parties that provide guidelines for appropriate care. In 2012 the American Board of Internal Medicine (ABIM) Foundation (a 501(c) 3 arm of the American College of Physicians) brought a group of physician representatives from many professional organizations together to develop guidelines for caring for patients and avoid what they see as low value care and services. The program, called Choosing Wisely, was updated regularly by 80 different specialty organizations until 2023 when the guidelines were no longer maintained by the ABIM foundation. These groups have been encouraged to continue to update and provide guidelines for care developed by professionals for professionals. These included guidelines, for example, that recommend against radiology studies for low back pain or medical clearance for simple low risk procedures, such as cataract surgery. Unfortunately, many articles point out that adherence to the various Choosing Wisely guidelines was low, and in a review^1,2 done on cataract centers, over 95% still require medical clearance on all patients. This puts into perspective the need to continue to review for low value care and unnecessary procedures.

The review of treatments that are deemed experimental or investigational remains a difficult one. In many cases these become treatments of “last resort” for some patients who have gone through all the approved or conventional treatments. Recently, a fictional syndicated television series highlighted one of their lead character’s “need” for an experimental treatment to treat breast cancer “because it offered her a high success rate.” The municipality she worked for initially refused to cover the treatment because of the expense associated with the treatment and the “risk of opening coverage for experimental treatment to others that could bankrupt the city”.  Eventually, they acquiesced because the union threatened to strike so, without any review of the treatment by their third-party administrator, the treatment was approved. This of course was a fictional account on a television show, however based on the high level treatment of a complex issue, one is left unaware as to whether the treatment could have been, for example, something like laetrile, and no one bothered to investigate, or it could have been a $1 million treatment that has been tested on 10 patients and six survived, but four did not.

Plans have clinical teams who are dedicated to reviewing the literature and studies performed on these treatments to assess the extent to which they have been successful, as well as the design of the studies, number of patients involved in the studies (both in the individual studies as well as the total number of patients reviewed in all the studies available) and the availability of peer-reviewed literature and third-party assessment of the treatment. In addition, plans contract for review by outside practicing physicians of the same or similar specialty who would be treating the disease in question to get their assessment of the viability of the treatment for the patient in question. Almost every plan adheres to this recommendation.

Making Prior Authorization Better

The process of completing the PA forms and submitting information on behalf of the patient has been deemed burdensome by practicing physicians and their staff. It is abundantly clear that health plans can do a better job of making it easier for physicians in several ways.

1. Review the list of procedures requiring PA: Not every procedure requires PA, even if it was required in the past. One health plan that had been around since the 1950s spent weeks reviewing the list of over 12,000 procedures that required PA and reduced that list to 4000.
2. Think about procedures from a different perspective based on actions that plan might take:
   1. Group 1: Procedures that the plan is not going to do anything about and really do not need to know about them. These include procedures that will be done by the requesting physician who participates in the plan and is performing them in his/her office. These should NOT require PA.
   2. Group 2: Procedures that the plan wants to know about but are likely not to do anything about. These include procedures that obviously need to be done, such as removal of a malignancy or a cardiac valve replacement and will be performed at participating facilities by participating physicians. These should require only a notification and NOT a PA.
   3. Group 3: Procedures the plans want to know about and will do something about. This includes many of the areas discussed above, such as back surgery, or request for out of network providers, for example. These would require a PA.
3. The industry could standardize the process and improve online exchange of information. Creating a standard form (the same way that the industry has adopted the use of the CAQH application and process for credentialing physicians and other providers into the plan) and a standard list of documentation that providers could transmit via portal or online, reduces the guessing games and burden on practices and requirements for different pieces of information currently required to submit for PA.
4. Reasonable turnaround times on both sides of the equation, to allow physicians and patients to get responses to requests so that treatments are not delayed. Providers need to allow for proper review of information provided and, if additional information is required, it is important to respond quickly to plans with the requested information.
5. Plans need to provide more detailed information to physicians and members as to why requests were denied and additional information that may be required for further review.
   1. If a physician reviewer for a plan has a question, requesting a discussion with the requesting physician often avoids delays in treatment resulting from mailing or faxing additional information that could have been provided within minutes of a phone call.
6. In the case of a request for an OON provider, if plans feel there are providers available within the network able to offer the same service, the plan needs to verify that ability. Too often I have seen plans recommend physicians or providers who may practice the same specialty or have the similar services available, but the specific procedure cannot be performed by the network provider, resulting in a delay for approval of the service.
7. Medication requests in larger that normal quantities or for indications that are not well documented should be accompanied by information that explains the need for the exceptions, such as vacation allotment or off-label indications with references to support their request.

In conclusion, prior authorization can be a burdensome and annoying process for patients, providers, and even plans, but is necessary in order to help reduce overall medical costs and reduce out of pocket costs for patients.

That said, the process can and should be better streamlined and more transparent.

If you would like assistance in evaluating and streamlining your current prior authorization process, or your process as a provider for addressing prior authorizations, please reach out to our team of experts at COPE Health Solutions at info@copehealthsolutions.com or directly to the authors at czincke@copehealthsolutions.com and jfrank@copehealthsolutions.com.

Citations:

¹Heekin, A.M. et al. (2018) Choosing Wisely Clinical Decision Support Adherence and Associated Inpatient Outcomes, The American Journal of Managed Care. Available at: https://pmc.ncbi.nlm.nih.gov/articles/PMC6813785/ (Accessed: 03 February 2025).

²Tamblyn, R. et al. (2023) Clinical Competence, Communication Ability and Adherence to Choosing Wisely Recommendations for Lipid Reducing Drug Use in Older Adults – BMC Geriatrics, BioMed Central. Available at: https://bmcgeriatr.biomedcentral.com/articles/10.1186/s12877-023-04429-5 (Accessed: 03 February 2025).

³Toleos, A. (2024) Press release: Unnecessary Back Surgeries Cost Medicare Up to $600 million Annually, Lown Institute. Available at: https://lowninstitute.org/press-release-unnecessary-back-surgeries-cost-medicare-up-to-600-million-annually/ (Accessed: 3 February 2025).