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Due to the prior authorization process, physician offices may be required to obtain permission from a patient's insurance company before a physician can prescribe certain medications.
Courtesy of Thinkstock

AAOS Now

Published 5/1/2016
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Manthan Bhatt

Addressing the Challenges of Prior Authorization

Ohio physicians support introduction of Senate Bill 129
Few issues frustrate physicians more than prior authorization, the process that requires physician offices to ask for permission from a patient's insurance company before prescribing certain medications or performing medical procedures. The time spent by staff members, physicians, and patients on persuading insurance companies to cover a procedure is not only expensive, but also may detract from patient care. Many argue that prior authorization is the tool of choice for health insurers in denying care, limiting utilization, and regulating the patient-physician relationship.

The physicians of Ohio are particularly concerned about prior authorization's effects on the physician-patient relationship, which is why they supported introduction of Senate Bill (SB) 129, the Prior Authorization Act. SB 129 was introduced in 2015 and has received strong support from medical, patient, and consumer groups. The legislation was passed unanimously by the Ohio State Senate this year, and is currently making its way through the Ohio State House.

SB 129 will make the following changes to the prior authorization system in Ohio:

  • create a uniform web-based system for submitting prior authorization requests
  • establish timeframes within which a prior authorization request must be responded to
  • ensure that once a prior authorization has been secured, an insurer is not able to retroactively deny coverage for that authorization
  • ensure that all new or future prior authorization requirements are disclosed to the provider community at least 30 days in advance
  • guarantee turnaround on prior authorization requests and quicker turnaround for more urgent requests
  • mandate that prior authorization protocols use evidence-based clinical review criteria
  • create a streamlined appeals process in the case a prior authorization is denied

The medical community in Ohio, working with its partners and creating a diverse coalition, has successfully moved legislation to reform the practice of prior authorization. More than a dozen health systems, hospitals, medical practices, and healthcare associations—including the Cleveland Clinic, the Ohio State Medical Association, the Ohio Children's Hospital Association, the Ohio Pharmacy Association, and many patient groups—have come together to back SB 129.

Read an enhanced summary of the legislation, below.

Manthan Bhatt is manager, state government affairs, in the AAOS office of government relations. He can be reached at bhatt@aaos.org

OHIO S.B. 129
Sponsor:
Senator Randy Gardner (R)

Summary: Current version (12/1/2015): Enacts the Prior Authorization Reform Act. Provides definitions for chronic condition, clinical peers, fraudulent or materially incorrect information, National Council for Prescription Drug Programs (NCPDP) SCRIPT standard and prior authorization requirement.

Stipulates that no later than January 1, 2018, a health insuring corporation, the Department of Medicaid or its designee, including a Medicaid managed care organization, shall permit a healthcare practitioner or healthcare provider access to the prior authorization form through the practitioner or provider's electronic transmission software system. Further stipulates that the health insuring corporation, Department or other designee, pharmacy benefit manager responsible for prior authorization requests, or other payer, shall accept and respond to prior prescription benefit authorization requests through a secure electronic transmission using NCPDP script. Establishes timelines for a health insuring corporation to respond or accept prior authorization requests.

Requires a health insuring corporation and the Department or its designee, to honor a year-long prior approval related to a chronic condition for an approved medical service, device, or drug. However, the year-long prior approval does not apply to a prescribed drug that has been prescribed to an individual with a complex or rare medical condition, a drug that costs $600 or more for a thirty-day supply among other situations.

Prohibits a health insuring corporation or the Department and its designee to retroactively deny coverage for the approved medical service or drug, unless fraudulent or materially incorrect information was provided at the time prior approval for the services was granted.

Establishes utilization review criteria for a health insuring corporation and the Department or its designee to review claims for coverage and medical necessity.

Establishes that upon a written request, a health insuring corporation and the Department or its designee, shall permit a retrospective review for a claim that is submitted for a service, device, or drug where prior authorization was required but obtained if the service in question meets specified criteria.

Requires health insuring corporations and the Department or its designee to disclose to all participating healthcare practitioners, healthcare providers and those insured of any new prior authorization requirements at least thirty days prior to the effective day of the new requirement and to publish on its website, provider portal or through a notice sent via electronic mail or standard mail a listing of all prior authorization requirements.

Requires a health insuring corporation and the Department or its designee to establish a streamlined reconsideration and appeal process to adverse prior authorization decision determinations that satisfies specified criteria.

"Chronic condition" means a medical condition that has persisted after reasonable efforts have been made to relieve or cure its cause and has continued, either continuously or episodically, for longer than six continuous months.

"Trauma care" means the assessment, diagnosis, transportation, treatment or rehabilitation of a trauma victim by emergency medical service personnel or by a physician, nurse, physician assistant, respiratory therapist, physical therapist, chiropractor, occupational therapist, speech-language pathologist, audiologist, or psychologist licensed to practice as such in Ohio or another jurisdiction.

Current version (12/1/2015): http://statelink.stateside.com/Attachments/233092_SB_129_PS.pdf

Introduced version: https://www.legislature.ohio.gov/legislation/legislation-summary?id=GA131-SB-129

Status: Introduced 3/16/2015. Referred to Senate Insurance Committee 3/17/2015. Hearing held 3/24/2015. Hearing held 11/10/2015. Hearing held 11/17/2015. Hearing held; amended 12/1/2015. Hearing held; amended; passed Committee; passed Senate 12/9/2015. Referred to House Insurance Committee 1/20/2016. Hearing held 2/9/2016.

Outlook: During the February 9 hearing, the sponsor made it clear that he would be willing to compromise on the measure. Changes to the measure were proposed by Senator Capri Cafaro (D). Representative Bob Hackett (R) praised the work of senators thus far on the measure but expressed concern over why the timeline for initial responses to prior authorization requests had been shortened to five days rather than aligning it with the federal guideline of 15 days.

The sponsor acknowledged these concerns but responded that the measure's timeline offers a "flexible standard."

Representative Barbara Sears (R) questioned whether the measure should include requirements for a provider to update carriers of a significant change—an idea the sponsor said he'd "be glad to entertain." Representative Hackett said his lingering concern with the measure is a potential increase in costs associated with requiring providers to respond to requests in a narrower timeframe.

The Ohio Medical Association submitted written testimony supporting the measure.

Passed Senate unanimously, 33-0.

Registered organizations in support include the National Patient Advocate Foundation, the Cleveland Clinic, Ohio Health, First Dayton Cancer Care, Orthopedic ONE and CoverMyMeds.

The sponsor is a member of the majority party. In Ohio, the Republican Party controls both chambers of the legislature and the Office of the Governor.