A Texas law, which eliminates prior authorizations in certain cases, has received a mixed welcome in the state’s healthcare community. While providers are heralding the first-of-its-kind law as a long-overdue measure to reduce administrative burdens and increase access to care, payers are warning of the potential patient harm that could follow.
Set to take effect on Sept. 1, the law prohibits health insurers from requiring pre-approval for services if a provider earns “gold card” status. A provider can earn the status if they have a 90% prior authorization approval rate. Health plans that require prior authorization must evaluate whether a provider qualifies for the gold card exemption once every six months.
“A physician or provider is not required to request an exemption,” said Alicia Phillips Pierce, communications director at the Texas Association of Health Plans, in an email. “If prior authorization is requested when an exemption applies, the health plan must promptly provide a notice of the exemption and payment requirements.”
To rescind the gold card status, the insurer must review a random sample of five to 20 claims submitted by the provider during the most recent evaluation period and find that the approval rate was less than 90%, Phillips Pierce said. Payers can revoke the exemption only in January or June of any given year.
The law does not apply to all health plans, only to those that fall under state jurisdiction but are not funded by the state. These include state-regulated commercial HMO plans, preferred provider benefit plans and exclusive provider benefit plans. Medicaid plans are not subject to the law.
For providers, the law offers much-needed relief from back-office burdens.
“I spend 15 hours on the phone every week managing prior authorization, and that’s time that I can’t take care of patients,” said Dr. Debra Patt, an Austin-based cancer specialist and immediate past chair of the Texas Medical Association’s Council on Legislation, in a phone interview. “We’ve tripled our staffing to manage prior authorization.”
Then there is the issue of delaying patient care. Patients often have to wait for insurer approval to come through before they can begin their treatment.
“When I need to provide urgent chemotherapy, I can’t get it authorized in time for patients,” Patt said. “And that can be the difference between life and death.”
Patt believes that the new law will help get patients the care they need quickly. But payers hold the diametrically opposite view.
Pre-authorization is an important tool to protect patients from overtreatment and inappropriate or dangerous care, Texas Association of Health Plans’ Phillips Pierce said.
“Health plans are often the only ones with a 360-degree view of a patient’s treatment, and safety edits can help stop dangerous interactions for care or prescriptions supplied by multiple providers,” she said.
The other criticism about the law from payers relates to the fact that this practice of gold carding is already occurring, and providers and payers are already working together to improve the prior authorization process.
“Gold carding programs may be targeted to specific services, and where used, provider performance can be regularly reviewed to ensure consistently high-quality care and patient safety,” said Kristine Grow, senior vice president of communications at America’s Health Insurance Plans, a national payer association. “[But the new law] distorts this concept by mandating broad provider exemptions with no accountability from providers.”
To Texas Medical Association’s Patt, these fears are unfounded. Providers must practice in accordance with rules set forth by state medical boards. If they are found to be practicing inappropriately, they will be sanctioned by the board, she said.
Meanwhile, the gold carding law set to go into effect in just over a month just scratches the surface of the reforms needed in the healthcare industry.
Similar policies need to be enacted at the federal level to prevent the prior authorization process from restricting care, Patt said.
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