Follow the money: A place for prior authorizations

Skin substitute spending skyrocketed for traditional Medicare, but not for Medicare Advantage (MA). Why? Because MA required prior authorizations for the wound treatments. Physicians have plenty of examples of frustrations caused by prior authorizations, but that process can be helpful for spending and for patients. Accountable for Health CEO Mara McDermott, JD, discusses this issue and references the new five-year Wasteful and Innappropriate Service Reduction (WISeR) model that will introduce PA in traditional Medicare.

Medical Economics: An interesting point that has come up in the discussion around the skin substitutes is the disparity in spending between Medicare Advantage and traditional Medicare. Among our audience, Medicare Advantage at times generates some frustration due to prior authorization, the PA process. It sounds like in this instance, the prior authorization process and that review process really helped to probably benefit not only the spending, but the patient care. Could you talk about that differential?

Mara McDermott, JD: I've been thinking about this a ton, honestly, especially with regard to the WISeR model. I don't know if that's something that your audience has been focused on, but the administration had announced the intent to test WISeR, which is a prior-auth-like model for traditional Medicare. And I know many of our providers also kind of did a deep sigh when they heard about that. And I should say also, we hear the frustrations with prior auth all the time, so I'm very well aware of that side of the coin. I do think, to your point, skin substitutes is kind of a flip side, right? It's like prior auth is frustrating when it slows you down from doing things that are necessary. Prior auth can be great if it stops a patient from being murdered or infected or having an amputation they don't need because they're having inappropriate wound care. And to me, it has seemed like the real rubber-meets-the-road moment is to figure out, how do you get more of the good stuff and less of the bad stuff, right? And, yes, speeding it up. But I think that skin substitutes is a really strong indicator that sometimes more controls are needed. We have had situations in our ACOs- data, we talked in the beginning about ACOs’ data capabilities improving. The ACOs can see there are clinicians billing for wounds the exact same size, the exact same day, for the exact same number of patients for weeks. And it seems to me like that is the kind of thing that AI is good at detecting those types of patterns and saying, hey, is something else going on here? It seems highly unlikely you would have that number of patients with that number of wounds exactly the same size, if you're measuring by centimeters. I think that there is absolutely a role for these utilization management techniques. Speeding it up is obviously important, and getting it right is obviously important. But I do think skin sub sort of shows the other side of the coin from what we've been hearing on prior auth for two-plus years now.