Senate panel eyes regulating insurance prior authorizations

Senate panel consider establishing Prior-Authorization Standards. Earlier this ZOOM+Care Transparency Report published data demonstrating that Oregon insurers take days to approve emergency CT scans. - SandersDiPiero

The Senate health committee on Tuesday mulled creating legislation to regulate how health insurers handle prior authorizations.

In a hearing on healthcare administrative costs, Harvard economics professor David Cutler urged the senators to consider policies for HHS to standardize and streamline billing systems within the next five years. He recommended that the federal government standardize prior authorization forms for all insurers, eliminate extraneous billing codes and direct the integration of electronic health records and billing systems so a patient's health history is automatically linked to authorization of treatment.

Cutler estimated these proposals could cut the health system's administrative costs in half and bring down overall costs by 8% to 15%. But the government would have to lead the way with policy: individual companies can't do it on their own, he said.

"The government is biggest payer, so it has to help," Cutler said. "The single biggest payer is the one who has to standardize and simplify coding."

The health insurance industry drew particular criticism from the panel for the way it currently treats prior authorizations. Lawmakers including Sens. Lisa Murkowski (R-Alaska), Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) noted that insurers' verification requirements can place undue burden on patients and physicians while also threatening delays in care.

As policymakers circled around the idea of standardizing those requirements for all carriers, America's Health Insurance Plans CEO Matt Eyles asked them not to take a heavy hand when it comes to regulating how insurers manage different populations.

Cutler acknowledged his ideas for standardizing these requirements will take time to gain traction. The insurance industry would face the same big IT overhaul that providers face with meaningful use.


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