Insurers wave caution flag on patient care changes

BOSTON — Health insurers are cautioning that prior authorization reforms could worsen health care cost increases, but a stream of doctors say the current system is plagued by administrative burdens and negative patient outcomes.

More than 90 people joined a Division of Insurance hearing Thursday, with stakeholders weighing in on the sweeping reforms that

Gov. Maura Healey announced last month to reduce burdens for providers and remove insurance obstacles for patients seeking timely access to care.

A press release from Healey’s office on Jan. 14 featured Massachusetts Association of Health Plans CEO Lora Pellegrini saying MAHP looked forward to working with regulators “to ensure that reforms are implemented thoughtfully, preserve appropriate clinical safeguards and build on the progress already underway to simplify prior authorization across the system.” At Thursday’s hearing, Pellegrini’s deputy emphasized the Division of Insurance must strike a balance to avoid exacerbating health care affordability challenges.

Prior authorization “remains an important tool to promote appropriate care, ensure payment integrity and maintain affordability, particularly now at a time when hospital, provider and pharmaceutical costs continue to significantly outpace the state’s cost growth benchmark,” said Liz Leahy, the Massachusetts Association of Health Plans’ senior vice president of patient advocacy and engagement.

“Reforms must focus on smarter, more targeted use of prospective review, not on broad elimination that will create unintended cost pressures and drive continued affordability challenges for employers and consumers,” Leahy said.

The proposed changes would nix pre-approval requirements for emergency care, urgent care, primary care, chronic care, occupational and physical therapy, and certain prescription drugs. The updates would also ensure continuity of care when patients switch insurance plans, require insurers to respond with 24 hours of urgent requests and simplify approval processes.

Leahy urged regulators to consider using guardrails as the reforms are implemented.

“There must be a mechanism to monitor the impact of these reforms on cost, quality of care and patient access, and to reinstate prospective review for any service where the data demonstrates sustained increases in utilization,” she said.

Dr. Michael Isaiah Bennett, a psychiatrist, agreed that prior authorization saves money for insurers. But he said there’s a lingering question over whether those savings are passed onto patients, clinical organizations and providers.

“The proliferation of out-of-control, unnecessary, costly, glitch-ridden, time-consuming authorization procedures indicates that industry administration has failed and government regulation is necessary to restore fairness and order,” Bennett said. “We are thankful to the DOI for stepping in and forcing insurers and pharmacy benefit managers to comply with fundamental values of fairness and remove dangerous obstacles to care.”

Blue Cross Blue Shield of Massachusetts is working with insurers across the country to simplify and streamline prior authorization, said Director of Policy and Legislative Affairs Paul Jones. He said the insurer supports the “spirit” of the reforms but is “concerned about the breadth of services that would be impacted by the exclusion of prior authorization, including many that have high-cost treatment options when lower cost and effective alternatives are available.”

“We’ve seen numerous instances of fraud, waste and abuse in some categories, and we want to ensure that there are appropriate ways to address improper increases,” Jones said, adding that Blue Cross Blue Shield is also “very concerned” that the draft regulations could result in premium increases.

There were 1.58 million prior authorization requests in 2024, with roughly 86% of requests approved, according to a report the Division of Insurance released in January based on data from 14 insurers. Requests climbed by just over 13% from 2023 to 2024.

The largest number of prior authorization requests involved radiology and pathology/lab tests, the report said. Requests for generic, brand-name and specialty drugs logged the largest increase — nearly 57% — between 2023 and 2024.

State Insurance Commissioner Michael Caljouw said the report “made clear that there is ample opportunity for streamlining and standardization of prior authorization.”

“Patients in the entire health care ecosystem would benefit from greater efficiencies, and insurers should employ prior authorization when it promotes high-quality, cost-effective care while restricting potential fraud, waste and abuse,” Caljouw said at the start of the hearing.

Dr. Kate Atkinson, a family doctor in Amherst and Northampton, detailed the stress her practice experiences every January when insurers require prior authorizations for drugs that her patients have been taking for years. Atkinson said she had to lay off 14 employees this year due to budget costs, which is worsening the administrative strain.

“It takes months of our time racing around trying to get drugs approved that somebody’s been on for a chronic disease for years — it makes no sense,” Atkinson said. “Literally, if you got rid of PAs, I would be solvent.”

One of the proposed regulatory changes says a “prospective review” authorization for a prescribed health service or drug should be valid for at least 90 days or until the end of the benefit year. Dr. Chris Garofalo, a family medicine physician with a private practice in North Attleborough, said that time period “is simply not long enough, especially for patients with chronic disease.”

“A more supportive approach for patients would be to ensure that PAs are valid for the course of treatment, which for managed chronic diseases may be years. Chronic conditions do not respect the calendar,” said Garofalo, who also testified on behalf of the Massachusetts Medical Society. “My staff and I spend time submitting PAs rather than seeing those patients who have flu, respiratory illnesses and other things that end up going to urgent care and the ER.”

Kate Linnea, a pediatric neuropsychologist at Boston Children’s Hospital, detailed the insurance obstacles her team faces as they seek approval for evaluations to understand a child’s functioning. The evaluation can help make diagnoses around autism, learning disabilities and language disorders.

“Before a child can get such an evaluation, providers and administrative support staff have to go through (a) laborious, ever-changing prior authorization dance,” Linnea said. “To give you an example of just how complicated this has become: Our administrators, who are responsible for scheduling and ensuring that insurance requirements are in place, must reference an Excel file that’s over 100 rows long, color-coded, outlining each insurance carrier and carve out the corresponding and varied timelines, forms and letter requirements.”

The Division of Insurance plans to finalize the prior authorization reforms by “late winter” or “early spring,” Caljouw said earlier this month. The Healey administration is also trying to tackle health care affordability challenges with a new working group, but recommendations are not expected until June. 

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