Enhancing California’s Prior Authorization: Top Recommendations

TL/DR –

Prior authorization has a crucial role in ensuring patients receive appropriate healthcare, but there is a consensus that the process needs significant improvement. Issues include providers lacking adequate information about prior authorization requirements, patients requiring too many approvals for the same treatment, and a need for more transparency about the process. To improve the situation in California, suggestions include automating the prior authorization process, refining public reporting requirements, extending the duration of prior authorization for ongoing treatments, and developing transparent principles for the annual review of prior authorization requirements.

Improving Prior Authorization Practices in Healthcare

Prior authorization, a utilization management instrument by health plans and risk-bearing medical groups, is designed to prevent inappropriate care and ensure covered services are delivered by contracted providers. Despite its essential role, its processes need substantial improvement.

As per the CHCF 2024 Health Policy Survey, 40% of Californians or their family members have waited for a procedure or medicine’s prior authorization (PA). Over half (55%) reported waiting a week or more, with low-income Californians more likely to require or wait longer for PA.

Experts from the Network for Excellence in Health Innovation identified the top five problems with California’s PA processes:

• Inadequate information on PA requirements at the care point escalates the cost for providers and payers.
• Data regarding PA process and impact is not publicly shared or actionable.
• Repeated PA and concurrent reviews during treatment interrupt patient care and potentially expose patients to financial liability.
• PA requirements are often misunderstood by patients and providers, leading to the perception of excessive PAs.
• There’s a perceived notion among providers and patients that medical necessity determinations for complex care are made without required expertise.

Upon reviewing California’s current laws, policy developments, and proposals by patient advocates and industry stakeholders, it was suggested that the following approaches align closely with the above priorities:

• Enforce technical requirements to foster automation adoption.
• Improve public reporting requirements to build trust and enable discussions on further reforms.
• Extend the scope and duration of PA approval for ongoing care with an established and accepted treatment course.
• Create transparent principles for PA requirements’ annual review.

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