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Velazquez Aims to Reduce Burden of Utilization Management on Small Medical Practices

Washington, September 11, 2019

Washington, D.C.—  Today, the House Small Business Committee under Chairwoman Nydia M. Velázquez (D-NY) met to discuss the impact of utilization management techniques like prior authorization on small medical practitioners. 

“When doctors spend hours dealing with paperwork or can’t treat a patient because a health insurance company won’t approve a treatment, the result is patients suffering,” said Chairwoman Velazquez. “That is why we are here today – to discuss a barrier preventing family physicians and specialists from providing critical care to their patients.”

Prior authorization is a process ordered by health insurance plans that requires a physician to first obtain approval before conducting a procedure or prescribing a medication. These practices were initially introduced to prevent waste within the health care system and keep down costs but have created severe consequences for medical practitioners. Prior authorization often delays access to necessary care for patients and increases costs for doctors in the form of the additional staff needed to obtain prior authorization from insurance companies. The process also impacts the quality of care that patients receive. A recent survey indicated that 87% of physicians reported a negative impact on patient outcomes due to prior authorization. 

Due to staffing constraints, small and solo practitioners are particularly impacted by prior authorizations. Physicians are forced to either work off-hours or take time away from treating patients to deal with prior authorization. This is leading to physicians devoting less time to patient care and contributing to a growing burnout rate among doctors.

During the hearing, medical professionals testified on their experience with utilization management and discussed ways that Congress can help reduce administrative burden. 

“Prior authorization is intended to minimize health care costs, but this is often done at the expense of a patient’s well-being,” said Dr. Paul Harari, Chairman of the American Society of Radiation Oncology. “When prior authorization is required, insurance companies will only pay physicians if the medical care has been pre-approved by the insurance company or a benefit manager. Nationwide, physicians and their patients are bearing the brunt of excessive prior authorization practices.”

“In one year, my practice dedicated over $80,000 in resources for prior authorizations,” said Dr. Dave Walega, Chief, Division of Pain Management at Northwestern University Feinberg School of Medicine in Chicago, IL. “If the same costs and circumstances were incurred in a small group medical practice, it could be financially devastating to have overhead costs rise so high.”

“Physicians strive to deliver high-quality medical care in an efficient manner. The frequent phone calls, faxes, and forms physicians and their staff must manage to obtain prior authorizations from prescription drug plans, durable medical equipment suppliers, and others impedes this goal,” said Dr. John Cullen, President of the American Academy of Family Physicians. “Even aggressive workflow optimization cannot eliminate the burden of unreasonable and redundant prior authorization requirements.”

“Time and time again, delays in treatment are leading to adverse outcomes by taking doctors away from patient care,” said Chairwoman Velazquez. “We need to improve the prior authorization process by streamlining and standardizing some of the procedures while also making sure there is a clear understanding by doctors and patients of the items and services subject to prior authorization.”


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