The debate over the usefulness of prior authorizations for value-based contracting is often torn between providers who find the administrative elements burdensome and payers who find the programs reinforce value-based care initiatives, like those in a recent America’s Health Insurance Plans (AHIP) survey.
AHIP surveyed commercial health plans from September to December in 2019. The commercial plans that were invited to participate each covered 50,000 lives or more. Forty-four plans ended up participating, representing 109 million commercial plan members.
The survey results highlighted both the pros and cons of prior authorization implementation. While prior authorizations reinforced value-based care, aligned with plans’ goals, and reinforced evidence-based care with provider input, plans also admitted prior authorization programs were not without their flaws.
PRO: PRIOR AUTHORIZATIONS ARE OFTEN IMPLEMENTED IN VALUE-BASED CONTRACTS
Prior authorizations has functioned well within value-based contracts, payers have argued.
“Prior authorization is often part of a broader medical management strategy that includes offering providers evidence-based resources, comparisons to their peers, and incentives to provide value-based care,” the AHIP study found.
In fact, 86 percent of the health plans used value-based contracts in order to bring down unnecessary healthcare spending on tests, treatments, and procedures. Nearly half of the participating plans considered prior authorization automation as a major opportunity to increase provider participation in risk contracts (49 percent).
PRO: PRIOR AUTHORIZATION SUPPORTS QUALITY, AFFORDABILITY, SAFETY GOALS
According to the AHIP survey, plans delineated four primary value-based care goals with which prior authorization programs align.
First, these programs aim to better the quality of care and support evidence-based care. For 98 percent of the participants, this was the main objective. However, not far behind, plans also used prior authorization to ensure patient safety (91 percent), to provide intervention in areas that were vulnerable to misuse such as drugs susceptible to substance abuse (84 percent), and nearly eight in ten plans (79 percent) used prior authorizations to lower healthcare spending.
And according to respondents, prior authorization programs did exactly what they were designed to do. Over 90 percent of the plans reported a positive impact on quality of care and affordability. Eight-four percent said that they saw a positive impact on safety as well.
In 2018, the GAO conducted a report which supported this argument. GAO studied Medicare’s use of prior authorizations in which CMS implemented prior authorizations to limit expenditures and enhance quality of care. The agency concluded that prior authorizations played a role in increasing CMS savings to between around $1 million and $2 million and urged CMS to continue the prior authorization programs to support these value-based care goals.
Source: HealthPayer Intelligence