Administrative challenges are nothing new to physician practices. But physicians and practice administrators across the United States now describe significant struggles to adapt to what amounts to far greater involvement from payers and regulators related to clinical decisions on a variety of fronts, such as prior authorizations, case manager involvement and network cancellations.
As physicians fight to retain clinical control, small practices report facing heavier workloads and time requirements for handling prior authorizations related to imaging and prescription drugs. They are mostly out of the loop with outside case managers getting more involved with their patients’ care. Sometimes they are getting ousted from health plans’ provider networks with no warning; and, if they get back in before open enrollment ends, they are unsure of how to stay in-network year-to-year or how to communicate such uncertainty to irked patients.
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The “unfortunate part” is the need to handle a rising number of prior authorizations and other administrative tasks, which “is really driving a wedge in the physician/patient relationship,” says Melissa Gerdes, MD, chair of the American Academy of Family Physicians’ Commission on Quality and Practice.
“I don’t think patients are aware this is happening at all, and they just get frustrated” when they learn that procedures and medications won’t receive insurance coverage, says Gerdes, who practices part-time and serves as vice president and chief medical officer for Dallas-based Methodist Health System’s outpatient services and accountable care organization strategy.
Gerdes says that a decade ago, when she was in full-time practice, she had to handle perhaps two prior authorizations out of 150 patient visits per week; now she is handling 15 to 20 prior authorizations for 100 patient visits per week.
“I think every day you get one more grain of sand that makes it more difficult to stay in private practice...and takes away the joy of practice and contributes to burn-out,” says Robert Eidus, MD, a family physician in Cranford, New Jersey. He works with 21 other physicians in a five-site primary care practice; his site has two physicians and a nurse practitioner.
Putting a price tag on physicians’ escalating administrative costs is daunting, and estimates vary widely. But some practices have the advantage of calculating for a smaller universe.
“My guess for us is it costs in excess of $30,000 a year for all prior authorizations, including imaging, pharmaceuticals, tests – and that’s principally staff time,” says Brian Forrest, MD, who practices with two other family physicians in Apex, North Carolina. “But it’s also patients we couldn’t see because of the time we spent on prior authorizations. Sometimes patients may wonder why it’s taking so long [to see the doctor], and it’s prior authorizations.”
The problem is getting worse, Forrest adds. “Two to three years ago for radiology, we only had one company requiring prior authorizations, now it’s most carriers. With medications, now 80% to 90% of insurance plans require prior authorization, and Medicare Part D is very expensive for patients if it’s not a preferred drug.”
NEXT PAGE: The rise of prior authorizations
Citing research indicating that about 30% of medical procedures in the U.S. are wasteful, David Mirkin, M.D., chief medical officer for Milliman MedInsight, says prior authorization “is here and coming back with more emphasis because it works.”
“There’s always reasonable doubt [about necessity of services],” Mirkin says, “and one of the things doctors are not very good at is providing all the information needed to remove that reasonable doubt.”
Mirkin says that payers’ scrutiny of medical necessity and the appropriateness of clinicians’ decision-making will be increasingly important. Network cancellations also will continue as health plans compare the
efficiency of participating physicians, he says. “If I’m using more services, they’re going to wonder, ‘Why am I an outlier?’...Unless somebody can show the quality of my care is 10 times better, why should [insurers] pay more?...ACOs are working with lower-cost doctors in their networks already.”
Practicing physicians respond that their aim is to provide the best care for their patients-and to have sufficient time away from administrative tasks to do so.
Robert Wergin, MD, president of the American Academy of Family Physicians (AAFP), says the academy supports responsible use of resources. But he says the academy, as an advocate for many small physician practices trying to stay afloat on low margins, also seeks more standardization and simplification of administrative processes, and that the AAFP emphasizes the significant burdens placed the current system imposes on patients and physician practices.
Wergin, who works in a small practice of eight family physicians and three physician assistants in rural Nebraska, recalls spending about three hours successfully appealing a payer’s denial of a breast-cancer patient’s MRI. The process included calls and letters to the payer and supporting documentation from her medical and radiation oncologists. He says her plan’s physician-reviewer called to apologize, approved the MRI and conceded the matter never should have gone past the first-level appeal. “But they never sent me a check for three hours” of administrative work, he says.
NEXT PAGE: Contributing to physician burnout
Eidus recalls that when he began practicing 37 years ago, solo practitioners typically employed a nurse or perhaps a nurse and a receptionist. They used a pegboard paper billing system, collected most of their money by cash, and gave patients a form to send to their insurance companies.
Other than completing the patient’s medical chart, perhaps 1% to 2% of the physician’s time was spent on matters other than patient care and overhead costs were about 35%.
“Today, overhead is about 70% and we have many more employees; and despite having many more employees, physicians are spending about 40% of their time in activities not directly related to patient care,” Eidus says. “That involves completing forms, prior authorizations, refills and a host of other issues.”
The result of gradually adding administrative duties is that doctors must see more patients per hour, he says, and time spent with patients is compressed, making it difficult to do comprehensive care.
“If a doctor has to see 25, 30 patients a day and on top of that has several hours of administrative activity, that contributes to burnout,” Eidus says. “It’s a bad recipe.”
NEXT PAGE: Dealing with prior authorizations
Deborah Walker Keegan, Ph.D., MBA, president of Medical Practice Dimensions, Inc., says that reducing care costs is the primary driver of the prior authorization trend.
Payers want to be sure the patient meets clinical requirements for the service, with evidence-based clinical protocols driving many of these decisions, she says. Payers also will say they want to be sure patients are not receiving unnecessary care.
“Unfortunately,” Keegan says, “it can take a nurse or medical assistant up to 45 minutes simply to obtain a medication authorization, and some of these authorizations have to be escalated peer to peer to involve the physician, consuming valuable physician and staff time.”
Given that prior authorizations consume significant time and resources in most medical practices, Keegan says that administrative simplification is needed. She suggests trying to concentrate this work with one or two staff members, rather than having each physician’s nurse or medical assistant involved in the process. “This serves to standardize and streamline the work; however, it is still labor-intensive,” she says.
In large practices with pharmacy staff, she says, she often asks clinical pharmacists or pharmacy technicians to handle medication prior authorizations, thus “focusing this work with staff who have the requisite knowledge and expertise.” While small practices won’t have the luxury of using clinical pharmacists, she says they, too, can consolidate staffing, “rather than everybody doing everything.”
Doctors understand why prior authorizations for imaging were created and the potential benefits in reducing costs and unnecessary radiation exposure to patients, Eidus says. However, he says, utilization management firms might cite cost savings if, for example, a patient with back pain doesn’t get an outpatient MRI but ends up getting one in the emergency department. In such cases, he says, “costs may be way higher and [yet] the utilization management company is taking credit for saving the MRI when it really didn’t.”
Eidus describes the use of prior authorization as “a very blunt tool.” If his office sends a prior authorization request that gets denied because of what is described as missing information, he says, “it ends up with a 20-minute phone call to a medical director somewhere.”
Prior authorization also is applied across the board, he says, even for doctors using evidence-based clinical guidelines who have aligned financial incentives to contain costs, such as pay-for-performance, patient-centered medical homes and shared- savings arrangements.
Medication prior authorizations “have been getting worse because of Medicare Part D,” Eidus says. When a beneficiary switches health plans, what used to be in-formulary may become out-of-formulary. “That’s a problem,” he says.
According to Eidus, the most pressing emerging concern involves supplies for diabetes management. “Pharmacies are getting very intrusive...and want doctors to testify their patients are testing blood sugars [in order] to give out supplies,” he says. “Some pharmacies are asking us to send office notes to them.”
Drug companies are marketing directly to people with diabetes, he says, “so we have patients switching to new [brands] every month ... and we get a new order to write on supplies.” This is not an area that patients misuse, making it hard to understand what is driving payers’ requests for information, he says.
“If the federal government wants to get involved in certifying the effectiveness of test strips, let them do that,” he says. “But don’t put us in the middle...We assume they’re all effective.”
Pulmonary medications, which are still generally brand-name, and diabetes medications with injectable insulins, which might average $200 to $300 a month if patients had to pay out-of-pocket, “are probably the toughest, where we’re most likely to get a call or a fax saying, ‘You need to do a step edit and prior authorization,’” says Forrest, the family physician in North Carolina. “It takes a lot of time.”
It wasn’t until a few years ago that a major payer in North Carolina rolled out radiology prior authorization for anything beyond a plain film X-ray, Forrest recalls. “When that first happened, it was shocking,” he says. Now, he says, “We may have one to four radiology prior authorizations on any given day. That could take up to two hours” to process.
NEXT PAGE: How case managers add an extra layer
When payers put case managers in the mix, “it’s almost like they’re adding an extra layer” with patients in the middle, says Keegan, the medical practice consultant.
At this point, practices can’t use them to extend the care team, getting notes or updates when they interact with patients in a formalized back-and-forth manner, because of liability, privacy and other concerns. “Can we use these virtual case managers as part of the official care team? We’re just not there yet,” she says.
Eidus says the situation with case managers is becoming very confusing. “On any one case, you may have four or five people touching that patient who calls himself a case manager and is interacting with the patient,” he says. They may include the health plan’s case manager; a hospital case manager handling discharge planning; a case manager for the healthcare delivery model, such as an accountable care organization (ACO); and, as in his practice, a care coordinator.
“It’s really difficult to figure out who’s doing what,” and to communicate so as to avoid overlapping services, Eidus says. For example, “the health plan’s care coordinator is dealing directly with the patient, and most of the time we don’t get any information from them,” he says. “Sometimes we get a basic letter, but not log notes on what they’re doing...nor do we get it from the hospital or ACO [case managers]....They would say, ‘You’re not [providing information to us] either.’”
Eidus says his care coordinator might reach out to an ACO’s care coordinator, or if his patient is hospitalized, to the hospital’s case manager; but this occurs on a case-by-case basis. His staffer “has the advantage of having access to our own records and the most accurate patient information,” he says.
Forrest says outside case managers typically call his patients if they are hospitalized or getting certain medications, or they contact him and suggest a new approach. “I’ll be frank. I pretty much ignore that totally, because making those decisions is between me and my patients,” he says.
He estimates that one or two North Carolina insurers’ case managers contact his practice per week, perhaps sending a fax suggesting a cheaper alternative; sometimes pharmacy benefit managers use their own case managers to suggest that patients could save money by using different drugs.
Less frequently-perhaps two to three times annually because of his patients’ fairly low hospitalization rate-Forrest hears from hospital case managers. “I don’t mind that. That doesn’t seem like I’m being micro-managed, although sometimes patients don’t like it,” he says.
Gerdes, who wears two hats as a practicing physician and as an ACO executive, says only a small number of 220 participating physicians in Methodist Health System’s Medicare Shared Savings Program plan didn’t want to work with the Medicare ACO’s nurse navigators. “We’re trying to target what doctor offices want, not just give them more paperwork,” she says, “so we’ve had good acceptance.” Nurse navigators help plan members with complex needs for therapies and home-based services, she says, “and I don’t know many practices that could do it themselves.”