New law reforms prior authorization for medical treatment; lauded by PAMED

Gov. Tom Wolf signed legislation today that makes significant reforms to the prior authorization process for medical treatment, as well as changes to step therapy for prescription drug treatment plans, a move applauded by the Pennsylvania Medical Society (PAMED). 

“The passage of prior authorization reform is a huge win for the medical community but more importantly, for our patients,” said PAMED President Dr. David A. Talenti.  

“PAMED has stayed the course over the last six years, along with a broad coalition of physician provider and patient advocacy organizations, who were committed to improving health insurance processes to ensure optimal care for our patients. This bill is a substantial improvement to health care in Pennsylvania and I applaud it,” Talenti said. 

Act 146 of 2022 sponsored by Sen. Kristin Phillips-Hil, R-York, ensures health care providers and insurers adhere to standards and timely feedback for prior authorization approval for medical treatment and procedures.  

The law applies to all commercial health insurance carriers and Medicaid plans. The bill also provides a path for appeals to step therapy prescription drug treatment plans to best address provider-recommended option for patients. 

 This is comprehensive patient protection legislation that increases transparency with medical insurers for medication and treatment approvals, Talenti said. 

“The final bill does not eliminate prior authorization, but it does provide standardized parameters that govern the relationships between patients, providers, and insurers in making health care coverage decisions,” he added. 

Delays in the prior authorization process have often been cited as reasons for patients abandoning treatment plans or negative clinical outcomes, according to a recent survey conducted by the American Medical Association. 

Prior authorization is the process in which health care providers obtain advance approval from insurers for payment or reimbursement before a specific treatment plan or procedure is delivered to the patient. 

Step therapy is a form of prior authorization, but it applies to prescription drug treatment plans. Insurers may recommend different drug treatment option(s) to patients to control costs. 

 “This law will expedite health care treatment plans and delivery to the majority of Pennsylvanians,” Phillips-Hill said. “Act 146 will improve health care outcomes and strengthen the relationship between patients and their providers. This law marks one of the most significant reforms to health care in our commonwealth in decades due to the willingness of all stakeholders working through a process that found compromise.”  

Phillips-Hill said, “However, we did not lose focus on our goal: improving patient outcomes. Act 146 delivers on this shared goal.” 

 Phillips-Hill notes that health care costs increase under current prior authorization, and step therapy delays as patients abandon treatment plans and often resort to seeking emergency care. 

 “By connecting patients to their proper treatment earlier, we can keep patients out of emergency rooms and reduce health care costs,” she added. 

 The law takes effect at the beginning of 2024, which allows health care providers and insurers to establish a system for electronic prior authorization requests.