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Study Finds Prior Authorization Costs Academic Radiation Oncology Clinics More Than $40 Million Every Year


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The time required to secure prior authorization approvals for radiation therapy equates to a financial impact of more than $40 million annually for academic medical centers, according to a new study presented by Bingham et al at the 2021 American Society for Radiation Oncology (ASTRO) Annual Meeting (Abstract 136).

"Prior authorization, while well intentioned, has become an overwhelming burden for clinics and providers. Our study shows that there is a substantial amount of time spent to secure cancer treatment approvals from insurance companies, which translates into added costs for medical centers," said lead study author Brian S. Bingham, MD, Chief Radiation Oncology Resident at Vanderbilt University Medical Center.

Prior Authorization Obstacles

Research has demonstrated that prior authorization obstacles are widespread throughout the U.S. health-care system. Ninety-four percent of physicians in an American Medical Association (AMA) survey reported that the process led to patient treatment delays, and surveys from ASTRO, AMA, and other groups found that requirements and delays increased over the past several years. Pre-approval requirements are particularly pervasive in radiation oncology; a May 2021 study published by Schwartz et al in JAMA Health Forum found that radiation oncologists face the highest prior authorization burden of any medical specialty.

Financial Impact of Delays

While surveys from ASTRO and other groups estimated time spent by medical practices on prior authorization, the study from Dr. Bingham's team is the first to analyze the financial impact of this time within radiation oncology. To do so, they combined compensation data with work-hour estimates to calculate the cost of physician and staff time spent on the process. They found that compensation costs for treatment-related prior authorization totaled an estimated $40,125,848 for academic radiation oncology practices nationally.

"The sheer magnitude of the cost was surprising," said Dr. Bingham. "We expected that prior authorization was expensive, but the degree of expense was eye-opening, especially given how often we go through this time-intensive process without significant changes to what we've prescribed."

KEY POINTS

  • Compensation costs for treatment-related prior authorization totaled an estimated $40,125,848 for academic radiation oncology practices nationally.
  • At one center, the radiation oncology department spent nearly $500,000 annually in employee time to obtain prior authorization for radiation therapy treatments.

A previous national survey of radiation oncologists led by ASTRO found that 86% of approval requests were ultimately approved.

"At our institution, the vast majority of the cost doesn't result in any change in the prescribed treatments, which are ultimately determined to be medically necessary. Instead, a patient's treatment risks becoming delayed and more expensive because of the process," said Dr. Bingham.

To arrive at the national estimate, the team first looked at employee time and related costs within their institution. Researchers compiled a flow chart of employees involved in a prior authorization request and how much time each person spent on different process steps, such as completing paperwork, making phone calls, or participating in peer-to-peer reviews.

Seemingly simple steps like scheduling peer-to-peer reviews constituted the bulk of this time costs, said Dr. Bingham.

"Anytime someone had to get on the phone, costs rose dramatically—almost a fourfold increase," he said. "It took more time to coordinate a peer-to-peer discussion than it did to have the actual peer-to-peer discussion."

Annually, their department spent nearly $500,000 in employee time to obtain prior authorization for radiation therapy treatments. The average compensation cost per request ranged from $27.51 for treatments that were initially approved (63% of all requests) to $100.55 when the insurance company required a peer-to-peer discussion (74% of initially denied requests at Vanderbilt's hospital-based clinic and 20% of those at satellite clinics).

"Clinics are forced to absorb these costs into their overhead, and that's time and money being taken away from other ways that we can help patients," said Dr. Bingham. "That made us take a step back and ask, 'What we can change?'"

At the institutional level, Dr. Bingham said practices can examine their own process maps for prior authorization management to look for potential inefficiencies and find ways to increase communication between the employees involved in securing approvals. He also encouraged support for the Improving Seniors' Timely Access to Care Act of 2021, which was introduced last week in the U.S. Senate and in May in the House.

"Something must be done to decrease this burden," he said. "Physician and staff time are finite resources, and they're being spent in ways that I don't think anyone views as beneficial to patients or productive for medical teams."

Disclosure: For full disclosures of the study authors, visit redjournal.org.

The content in this post has not been reviewed by the American Society of Clinical Oncology, Inc. (ASCO®) and does not necessarily reflect the ideas and opinions of ASCO®.
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