A CPT code for prior authorization? Here's how it could happen

UPDATED: Thursday, May 9 at 5:50 p.m.

One physician is making the case that prior authorization for procedures should be reported to insurance plans as a CPT code—though that proposal has been withdrawn for now.

Alex Shteynshlyuger, M.D., initially submitted a proposal for the American Medical Association (AMA) panel in Chicago this week that has since been rescinded. Shteynshlyuger, the director of urology with New York Urology Specialists, told Fierce Healthcare that he believes the plan he brought forward is the only way to realign the incentives of prior auth services that are unbalanced in favor of insurers.

“Prior auth is one of the biggest issues of concern for physicians nationwide,” he said. “It’s also a big concern for patients. It frustrates everyone.”

Under this CPT code plan, prior auth services would be a time-based, Category 1 code. He believes prior auth services are shown to be medically necessary and show clinical benefit, meeting the requirements of a Category 1 code. His plan is similar to a policy proposal by Harvard economist David Cutler several years ago.

The prior auth proposal discussion at the meeting was scheduled to take place Friday morning, but has been withdrawn, according to an updated agenda posted Thursday afternoon by the AMA. Shteynshlyuger did not immediately return a request for comment explaining why the proposal was withdrawn, but the AMA said it was withdrawn at the applicant's request. 

Sheteynshlyuger said the situation is clear. Currently, a health plan is not overly burdened by prior auth requirements. Imposing prior auth decisions benefits an insurer’s bottom line, whether a claim is approved, delayed or rejected. Over time, prior auth has been required for more and more services.

Patients don’t benefit, as they are more likely to have to wait for approval, or are sometimes wrongfully denied and must go through a rigorous, costly appeals process. For physicians, every minute spent handling prior auth claims is a minute financially wasted.

“Every time a physician does prior auth, you’re actually pulling money from their pocket because there is no compensation,” he said. “It can take hours to prior authorize a $10 medication and we aren’t getting paid for that.”

Despite the horror tales of patients being denied or delayed care for medical procedures, lawmakers have failed to legislate change that fixes ongoing problems.

In Texas, the state implemented a gold card system to reduce prior author burden, but the structure can be taken advantage of through loopholes, and the Texas Department of Insurance revealed just 3% of state physicians are eligible for the system, he said.

Recent federal regulation, requiring plans to send prior auth decisions quicker, will also be ineffective, said Shteynshlyuger, because there is no enforcement mechanism or penalty for noncompliance.

The AMA, American Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association sent a letter to CMS in July regarding certain prior auth standards that would result in administrative burden, the groups said.

Material obtained from attendance at the meeting, other than the pre-panel agenda and summary of panel actions, is confidential unless otherwise publicly shared by the AMA, a spokesperson told Fierce Healthcare. A majority vote is required for passage.

AHIP defends prior auth by saying it is safe and evidence-based, but agrees the process is burdensome.

There’s also the issue of fraud. In February, it was revealed just seven durable medical equipment companies cost Medicare more than $2 billion after the National Association of ACOs revealed claims from two billing codes for urinary catheters skyrocketed around the country.

Turning prior auth into a CPT code allows physicians to get reimbursed and patients to receive adequate care, yet it still acknowledges the concerns plans have, said Shteynshlyuger. It also allows for greater documentation and studies to take place to see how certain conditions are positively or negatively affected by prior auth, potentially constraining the rate of growth of prior auth requirements across the board.

Should the AMA panel sign off on such a code, the proposal would still require CMS approval before taking effect.

Editor's note: The nature of the joint letter between the AMA, AHIP and BCBSA has been clarified.