New Georgetown CHIR Report Examines State Reforms of Prior Authorization

Health insurers’ use of prior authorization – a medical management tool requiring providers to seek the insurer’s approval before their patient receives a healthcare item or service – appears to be on the rise. While providers and patients raise concerns that prior authorization can inhibit patient care and increase administrative burdens for clinicians, insurers argue that prior authorization is a critical tool to curb costs and inappropriate service utilization.

To learn more about how policymakers are responding to these concerns, we looked at four states’ prior authorization policies for the commercial market: Arkansas, Illinois, Texas, and Washington. Through qualitative interviews, surveys, and policy analysis, we examined a range of state-level prior authorization reforms, and provide an assessment of how they are affecting patients, providers, and insurers.

We find that there is no single “silver bullet” reform of prior authorization policies or practices that can ease provider burden and improve patient access without also increasing insurers’ costs, but several reforms discussed in this study show potential, including:

Requiring greater transparency of services subject to prior authorization, clinical review standards, and the reasons for denying prior authorization requests;

Setting maximum time periods for insurers to respond to prior authorization requests;

 Standardizing the form and method for exchanging prior authorization requests, decisions, and related information; and

Establishing expectations for peer-to-peer review of prior authorization requests and the use of accepted and transparent clinical review standards.

Ultimately, the effect of state-level prior authorization reforms depends on their design, implementation, ad enforcement, and should be coupled with federal action to extend reforms to employer plans that fall outside state regulation.

Read the full report here.

Funding for this research and report was provided by the Robert Wood Johnson Foundation. Additional publications by CHIR researchers can be found here. CHIR is composed of a team of nationally recognized experts on private health insurance and health reform. For more on our work, please see our website, blog, and follow @GtownCHIR on X (formerly Twitter).