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Contention continues on prior authorization, co-pays, co-insurance

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Obamacare isn't directly responsible for the health insurance complications known as prior authorization, co-insurance and multiple co-payments, because they predate the law and it doesn't mandate them.

However, Lara Brooks said, the market pressures the law is exerting are a factor in expanding the practices. And as associate director of practice economics and payer relations at the Pennsylvania Medical Society, she knows consumers aren't alone in seeing the practices as a bother at best.

For instance, prior authorization requirements are “onerous, time-consuming and an administrative burden to physicians,” Brooks said. There are some online systems that speed and simplify the process, but it's still not uncommon for a staff member to spend 20 minutes to an hour on the phone to obtain one for a patient.

According to the American Medical Association, handling the authorizations electronically can reduce the cost by 80 percent. In addition to more automation, Brooks said, physicians would like to see more standardization across the industry on authorizations — and more alignment with standards of care.

Authorization standard criteria “should be transparent, accessible and consistent,” she said — and reliable response times would be good, too.

Prior authorization

Policies that stick patients with multiple co-payments for a single visit — say, one for the office visit and one per diagnostic or clinical procedure, which can add up quickly in fields like physical therapy — are less common than preauthorization requirements, Brooks said. But where they exist they tend to be flashpoints.

Physicians may attempt due diligence upfront, she said, but sometimes the mechanics of a plan are not readily apparent, particularly if something comes up during a visit that the physician hadn't anticipated. “What happens on the back end is the patient is now a little upset with their physician, saying, 'I was only there for one visit. Why do I have to pay $80 for one visit instead of $20 for my co-pay?'” There are also concerns that the higher out-of-pocket costs may deter people from getting needed care.

In May, the state Senate Banking and Insurance Committee held a public hearing on Senate Bill 594, which would limit co-payments for physical and occupational therapy and chiropractic care to the co-payment or co-insurance cost for a primary care office visit.

“Health plans have shifted the vast majority of the cost by imposing increasingly high co-payments on consumers,” bill sponsor Sen. Charles McIlhinney wrote in the bill's memo. “In some circumstances, co-payments have exceeded the reimbursement paid by the plan to the provider of care.”

At the hearing, Pennsylvania Chiropractic Association was in favor of the bill and insurers opposed it, as did Pennsylvania Insurance Department Commissioner Mike Consedine and Pennsylvania Chamber of Business and Industry Vice President of Government Affairs Sam Denisco.

Consedine said the bill could raise health insurance costs, as it would “restrain insurers' ability to use cost-sharing mechanisms as a way to incent appropriate utilization of health care services.”

Denisco echoed that, adding, “According to some of our health insurance company members, limiting co-payments could lead to a growth in premiums by anywhere from 3.5 to 17 percent — increased costs that will be shouldered by employers and other policyholders.”

The bill remains in committee, and PID spokeswoman Rosanne Placey said its division that handles health insurance questions and complaints has not been asked about multiple co-pays since January. Also, she added, PID isn't sure why, but the number of written complaints it has received on general health insurance claims matters so far this year is down 24 percent from last year at this time.


Finally, Brooks said, the incidence and percentage of co-insurance have been rising over the years, and are particularly notable in some plans on the Obamacare marketplaces. In addition to potentially dissuading patients from seeking treatment, she said, physicians have concerns because collecting payments from patients is much harder than from insurers.

If a patient needs surgery, she said, the co-insurance cost might be 30 percent. “When do you collect it?” she said, noting that the society is getting lots of calls on the issue. “Upfront? Do you do it after services are rendered?” 

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